A Deficit of Trust: Assessing Congressional Insider Trading Reforms

It is an open secret that members of Congress make abnormally large returns trading on the stock market, oftentimes making trades with clear conflicts of interest. Although some reforms have taken place—namely the STOCK Act of 2012—more comprehensive, bipartisan reforms are currently under consideration in Congress. Though not a panacea for corruption or activity that visibly violates the public’s trust in democratic institutions, putting restrictions on what elected officials can do in financial markets is a critical step toward governmental accountability. The ETHICS Act, that lawmakers originally proposed in 2024 (and reintroduced in 2025), has been viewed by some as a step forward—or at least in the right direction. This Note analyzes the effectiveness of the proposed ETHICS Act by assessing the values underlying congressional insider trading reforms and the real-world cases such an Act is supposed to help address. The Note concludes by proposing a cooling-off period between authorizing sales of allowed investments and the actual sales. It also recommends making insider trading charges against members of Congress easier to prosecute.