The Trading Floor

2011

The claim

A popular belief says members of Congress are some of the best stock traders in the country, because they see laws and briefings before anyone else. Is it true? The studies disagree, the law has changed, and a few cases have reached court. This story keeps three things apart: what a record shows, what a court or agency found, and what is only suspected. A good return, or a trade that was disclosed, is not evidence of a crime.

Apr 2011

Two studies

In 2004 Alan Ziobrowski and three colleagues built pretend portfolios that copied what senators bought and sold in 1993 to 1998: the “buy” side beat the market by 85 basis points a month and the “sell” side lagged by 12, a gap they called not statistically significant on the sell side. Their 2011 House study, of trades in the odd-numbered years from 1985 to 2001, found purchases beat the market by 55 basis points a month, about 6% a year. The Senate paper says its results “should not be used to infer illegal activity.” It found no reliable difference between Democrats and Republicans, and no abnormal returns in 1997 and 1998.

85 basis points a monthHow much a portfolio copying U.S. senators’ purchases beat the market, 1993–1998. A basis point is one hundredth of a percentage point

Apr 2013

Capitol Losses

Andrew Eggers and Jens Hainmueller reread both studies, and for 2004 to 2008 rebuilt members’ actual holdings from their disclosure forms. They found that the average member would have done better in a passive index fund; a working-paper draft put the shortfall at 2 to 3% a year. Their second paper, in 2014, found that members put money disproportionately into local firms and campaign donors, and that those connected holdings generally did better than the rest.

2013

Why they differ

The studies cover different years and methods. The 2004 and 2011 papers copied trades into pretend portfolios; Eggers and Hainmueller reran that method on 2004 to 2008 and found no excess returns, then measured actual holdings, and say in a draft that the Senate headline appears under only one of four weightings and might reflect chance or a few traders. Others find an edge in places: Hall, Karadas and Schlosky, for 2004 to 2010, found abnormal returns only after two terms and only for members on powerful committees. A third reading is that attention or the law ended any edge. The 2020 working paper by Belmont and others calls it possible that the 2004 study curbed trading, and Wei and Zhou find any STOCK Act effect on leaders “very weak.”

Apr 2012

60 Minutes, 13 November 2011

Peter Schweizer, a fellow at the Hoover Institution, which CBS calls a conservative think tank at Stanford, had gone through members’ disclosure forms for his book Throw Them All Out; CBS says it independently verified what it used. Schweizer alleged that Republican Spencer Bachus bought stock options the day after the September 2008 crisis briefings. Bachus’s office said he never trades on non-public information, and the correspondent said the report was not alleging he broke any law. In April 2012, according to a statement from Bachus’s office, the Office of Congressional Ethics’ board voted 6 to 0 to dismiss the allegations.

13 Nov 2011

A Republican’s answer

CBS reported that John Boehner, then House Minority Leader, bought health-insurance stocks just days before the public option was killed, and that they all went up. Boehner said he had made no day-to-day trading decisions in his account for years. His spokesman said his financial adviser makes his investment decisions, and Roll Call’s source said the adviser also recommended a suite of “blue-chip stocks.” No body found that he traded on inside information.

Mar 2008

A Democrat’s answer

CBS reported that Nancy Pelosi, then Speaker, and her husband bought 5,000 Visa shares at $44 in the March 2008 IPO, and that two days later they traded at $64, while a credit-card bill was moving in the House. Asked whether a speaker should accept “a very preferential, favorable stock deal,” she said, “Well, we didn’t.” Her office said the purchase was not preferential and came on a broker’s recommendation, and Pelosi noted that the credit-card law passed two years later, starting in the Senate. No body found that she acted on an investment.

4 Apr 2012

The STOCK Act

The bill was older than the broadcast: Representatives Brian Baird and Louise Slaughter had pushed it for years, and sources date its first introduction to 2004 (CBS) or 2006 (Obama). CBS says its report changed the picture, and cosponsors rose. Obama asked Congress for a bill in his State of the Union and signed it on 4 April 2012. It says members and staff “are not exempt” from insider-trading rules, and Eggers and Hainmueller note scholars disagreed on whether those rules already applied.

30 Jan 2023

Forty-five days

The law makes members report a stock trade within 30 days of learning of it, and no later than 45 days after it. The usual penalty for a late report is a fee of at least $200, after a 30-day grace period. The same House Ethics memo says the Attorney General may pursue civil or criminal penalties against someone who knowingly and willfully fails to file, up to $71,316 in a civil case and up to a year in prison in a criminal one.

$200The minimum fee for a late trade report, per the House Ethics Committee in 2023

15 Apr 2013

A quiet change

In April 2013 a new law ended the STOCK Act’s online posting for most staff and executive-branch employees, and delayed to 1 January 2014 the date for public access systems. Members of Congress, the President, the Vice President, candidates and Senate-confirmed officers stayed covered. Both chambers passed it by unanimous consent, the Senate on 11 April and the House the next day, and Obama signed it on 15 April. Roll Call reported that leaders of both parties and the White House would not answer its questions that week, and that they acted after a report on national-security dangers of the posting.

2022

After the law

William Belmont, Bruce Sacerdote, Ranjan Sehgal and Ian Van Hoek built a comprehensive data set of public-stock trades by senators and House members from 2012 to 2020. They found no evidence of superior performance, including for senators publicly accused of informed trading. Their 2020 working paper, which compared senators’ picks with stocks of the same industry and size, found neither Republican nor Democratic senators skilled at picking stocks to buy, and found that stocks sold after the 24 January 2020 briefing underperformed by 9%, which it called modest evidence. The published abstract says their methods cannot rule out hidden insider trades.

26 basis points behindHow far stocks bought by House members underperformed over six months, on average, 2012–2020, in the published abstract

Nov 2025

A small group at the top

A 2025 NBER working paper by Shang-Jin Wei and Yifan Zhou studied the 20 of 47 congressional leaders from 1995 to 2021 who traded both before and after taking office. Before, they and matched rank-and-file members both underperformed a benchmark by similar amounts; after, leaders beat their matches by up to 47 percentage points a year, which the authors tie to political influence and corporate access. They warn it is a small group, not representative of Congress. A 2026 working paper by Haotian Chen and Bruce Sacerdote, covering all members and their families from 2012 to 2023, found that on average portfolios “underperform or, at best, match market benchmarks” after the STOCK Act.

up to 47 points a yearLeaders against matched members after taking leadership, 1995–2021: 20 leaders. The authors say the finding is not representative of Congress as a whole

22 Jun 2017

The picnic

The Justice Department’s account begins on 22 June 2017. Representative Chris Collins, a Republican from New York and a board member of the Australian company Innate Immunotherapeutics, was at the Congressional Picnic at the White House when an email told its board the drug trial had failed. The department says he then spoke to his son for more than six minutes, before the failure was public.

17 Jan 2020

Guilty, then pardoned

Collins resigned on 30 September 2019 and pleaded guilty the next day. The Justice Department said the trades by his son and others let them avoid over $768,000 in losses. In January 2020 a judge sentenced Collins to 26 months and a $200,000 fine. On 22 December 2020 President Donald Trump pardoned him, one of 15 pardons that day, the Associated Press reported.

26 monthsChris Collins’s prison sentence, 17 January 2020, after a guilty plea

26 May 2020

Early 2020

Senate records show Republican Richard Burr and his wife sold $600,000 to $1.7 million in stock in more than 30 transactions in late January and mid-February 2020, just before the market fell. Burr acknowledged selling because of the coronavirus but said he relied “solely on public news reports”; the FBI later got a warrant for his phone and he stepped aside as intelligence chairman. The AP reported in May 2020 that Republicans Kelly Loeffler and Jim Inhofe and Democrat Dianne Feinstein, whose husband’s sales were reported, were told they were no longer under investigation; all denied wrongdoing. Burr’s Justice Department inquiry also ended, and in January 2023 he said the SEC had “concluded their investigation with no action.”

Jun 2026

A conviction, an appeal, a pardon

In March 2023 a federal jury in New York convicted Stephen Buyer, a former Republican congressman from Indiana, on four counts of securities fraud. Prosecutors said his information came from his consulting for T-Mobile ahead of its 2018 merger with Sprint, and for Guidehouse ahead of its 2019 purchase of Navigant, after he left Congress in 2011. He was sentenced to 22 months in September 2023; the Second Circuit upheld the conviction in March 2025 and the Supreme Court rejected his appeal in May 2026. President Trump pardoned him in June 2026, and Buyer, who maintains he is innocent, called the case a “politically motivated prosecution.”

13 Sep 2022

Two investigations

Business Insider’s “Conflicted Congress,” begun in December 2021, counted members who filed late or missed STOCK Act reports; its January 2023 story, headed 78 members, lists 40 Republicans and 37 Democrats. In September 2022 the New York Times reported that at least 97 members had traded in assets that intersected with their committee work, or had a spouse or child do so, and that more than 3,700 trades, by lawmakers from both parties, posed potential conflicts. Neither count is of insider trading. In July 2022 the House Ethics Committee voted unanimously to dismiss late-report referrals, including for Republican Pat Fallon and Democrat Tom Suozzi, finding no clear evidence the errors were knowing or willful, although the independent Office of Congressional Ethics had recommended further review of Suozzi.

26 Jul 2022

Spouses

Many disclosed trades belong to a husband or wife and are marked “SP.” In 2022 the House Speaker’s husband, Paul Pelosi, exercised Nvidia call options bought over a year earlier, then, a filing showed, sold 25,000 shares at a $341,365 loss on a report filed the day before the Senate passed a chip-subsidy bill; her office said he sold rather than let press “misinformation” continue, and Republican Rep. James Comer called her “the ultimate insider.” Asked if her husband ever traded on information from her, Pelosi said, “No, absolutely not.” Republican Sen. Kelly Loeffler’s husband chairs the New York Stock Exchange and she said third parties managed their accounts, and Republican Sen. Rand Paul disclosed his wife’s early-2020 Gilead purchase more than 16 months after the legal deadline, CNBC reported.

15 Dec 2021

The case against a ban

Democrat Nancy Pelosi said in 2021: “We’re a free market economy,” and her office later asked a House committee to review the proposals; Insider reported that Democratic leaders put off a vote on a ban until after the 2022 midterms. Republican Sen. Ron Johnson said in 2025: “We do have insider trading laws. We have financial disclosure.” Roll Call reports that many lawmakers resisted a total ban, saying it would strip them of an important source of income, and Republican Sen. Joni Ernst said the Senate bill would force business owners to sell their businesses. Sen. Rick Scott said he agreed lawmakers shouldn’t trade stocks but asked “when in this country it became a negative to make money”; some Republicans said blind trusts suffice, and Hawley called them “often workarounds.”

30 Sep 2026

The votes

In July 2025 a Senate committee advanced Hawley’s ban on members, the president and the vice president by 8 to 7, Hawley the only Republican to join the Democrats; its divestment duty starts with the next term, so, CBS notes, it would not affect President Trump. In July 2026 the House passed Republican Bryan Steil’s milder bill, which bars new purchases but lets members sell, 232 to 198; Democrats called the voter-ID language added to it a “poison pill,” and some said it did not go far enough or should cover the president. On 30 September 2026 the Senate fell seven votes short of the 60 needed; Majority Leader John Thune said Democrats “can’t take yes for an answer,” and Minority Leader Chuck Schumer called the bill “as ineffective as a screen door on a submarine.” No ban is law.

232 to 198House vote on the Stop Insider Trading Act, 22 July 2026: 218 Republicans, 13 Democrats and 1 independent yes; 198 Democrats no