The House of Representatives has passed the Stop Insider Trading Act, a measure Republicans have touted as a major ethics reform designed to prevent lawmakers from profiting from information gained through their official duties.
But while the bill would impose new restrictions on members of Congress and their families, it would not apply to President Donald Trump.
The legislation passed the House 232-198 on Wednesday, with a handful of Democrats joining Republicans in support, though it also drew criticism from Democrats, ethics groups and some Republicans who argued it falls short of a true stock-trading ban. Among the complaints was that the measure exempts the president and vice president while allowing lawmakers to keep stocks they already own.
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The exemption is especially notable given Trump’s recently disclosed trading activity. Financial disclosures filed with the Office of Government Ethics showed thousands of stock transactions in accounts associated with the president during the first quarter of 2026, involving hundreds of millions of dollars’ worth of securities.
Why the Stop Insider Trading Act Does Not Apply to Trump
Despite being promoted as a major ethics overhaul, the legislation would not affect the president. The bill’s definition of “covered individuals” includes members of Congress, their spouses and dependent children—but not the president or vice president.
Unlike members of Congress, presidents are subject to a separate set of ethics and disclosure rules. While lawmakers are governed by congressional ethics standards and the STOCK Act, presidents are not prohibited from owning individual stocks and are instead subject to separate financial disclosure and ethics requirements.
The Stop Insider Trading Act will bar covered individuals from purchasing covered investments, which generally include individual publicly traded stocks and similar securities. The legislation does not include the president or vice president among those covered by the restrictions.
Rather than forcing lawmakers to sell stocks they already own, the bill would prohibit future purchases of individual stocks. Existing holdings could be retained and sold, provided advance public notice is filed between seven and 14 days before the transaction.
Richard Painter, who served as chief White House ethics lawyer under President George W. Bush and co-authored a 2020 letter urging Congress to prohibit lawmakers from owning individual stocks, said the House measure is a step forward but leaves a significant gap by exempting the president and vice president.
“I’ve always urged that the prohibition of stock trading apply to the members of Congress, the president and vice president,” Painter told Newsweek. He said stock ownership by elected officials raises both conflict-of-interest concerns and questions about whether government decisions could benefit personal investments.
Still, Painter backed the House-passed bill, calling it “better than nothing” and adding that “once this is clearly illegal for members of Congress,” any president who continues actively trading stocks could face “enormous political embarrassment.” He added: “I prefer a bill that applied to the president, the vice president and the members of Congress, but this is better than nothing.”
The Trump administration has strongly endorsed the legislation. In a Statement of Administration Policy published on Tuesday, the White House said the bill would move beyond the current STOCK Act by preventing lawmakers and their families from purchasing individual stocks while in office.
“Instead of relying on disclosure after the fact, this bill would prohibit Members of Congress and their families from purchasing individual stocks while the member is in office, require public disclosure of planned sales in advance, and impose substantial penalties for violations,” the administration said in a statement sent to Newsweek. “Members could still invest, but only in diversified vehicles like mutual funds or exchange-traded funds, which don’t involve betting on specific companies.”
The White House also signaled that Trump would support the measure in its current form, stating that “if H.R. 7008 were presented to the President in its current form, his senior advisors would recommend that he sign it into law.” The administration’s statement did not address concerns raised by some ethics advocates that the bill would not apply to the president or vice president.
The administration noted that “most Americans are in favor of banning the trading of individual stocks by Members of Congress, and President Trump has called for a stock trading ban to be passed without delay.”
Trump’s Stock Trading Activity Under Scrutiny
The debate comes just months after Trump disclosed an unusually high volume of stock trading activity.
The president’s 2026 annual financial disclosure lists holdings across multiple investment accounts, including positions in major publicly traded companies such as Apple, Amazon, Microsoft, Nvidia, Alphabet, Meta, Broadcom, Tesla, Oracle, Palantir, Netflix, JPMorgan Chase, Boeing and many others.
The filing also discloses significant holdings in exchange-traded funds, including S&P 500, technology, growth, financial-sector and bond funds. Among the larger ETF holdings listed are the SPDR S&P 500 ETF, iShares Expanded Tech Sector ETF and Invesco S&P 500 Quality ETF.
Several disclosed positions were valued in ranges of $1 million to $5 million, while major ETF holdings were valued at up to $25 million each.
Trump’s disclosure further shows substantial fixed-income investments, including corporate bonds and municipal securities spread across several investment accounts.
The filing also details Trump’s connection to Trump Media & Technology Group, the parent company of Truth Social. The disclosure states that approximately 114.75 million shares of Trump Media common stock were transferred to the Donald J. Trump Revocable Trust in December 2024, with Trump remaining the trust’s sole beneficiary.
The scale of Trump’s disclosed trading activity has drawn attention because sitting presidents historically have tended to place assets in blind trusts or maintain less active trading portfolios. Trump’s first-quarter disclosures showed roughly 3,600 transactions, representing an unusually high level of trading activity for a sitting president.
Ultimately, none of those holdings would be affected by the Stop Insider Trading Act if it became law because the legislation applies only to members of Congress and their families.
Critics Question Presidential Exemption
The bill’s treatment of the president has become one of the main lines of criticism from Democrats and ethics advocates.
Representative Bonnie Watson Coleman of New Jersey, who voted against the measure, argued that it “fails to actually end the ownership or sale of stock by members” because lawmakers would still be permitted to keep investments they already own.
“The American people deserve to be confident that their members of Congress do not trade stocks held in industries they oversee nor profit from insider information on upcoming legislation or regulations of those industries,” Watson Coleman said in a statement released this week.
Outside groups have raised related concerns. The Campaign Legal Center argued the legislation leaves unresolved questions about conflicts of interest. “The Stop Insider Trading Act purportedly seeks to address widespread concerns around congressional stock trading. Yet, it would not actually ban lawmakers from trading stocks or stop members from unduly profiting from their official positions,” the group said in a statement.
Supporters say the legislation is intended to restore public confidence in Congress. Representative Bryan Steil of Wisconsin, the Republican sponsor of the bill, called it a “transformational” ethics reform and argued lawmakers should not be allowed to build personal stock portfolios while serving in office. “I believe it’s time we just stop allowing members to buy new stock,” Steil said in testimony before the House Rules Committee. “Americans should be confident their lawmakers are working for them, not their own stock portfolios.”
What Restrictions Would Members of Congress Face?
If enacted, the Stop Insider Trading Act would prohibit members of Congress, their spouses and dependent children from buying individual stocks and similar securities.
Those found in violation of the law could face financial penalties equal to $2,000 or 10 percent of the value of the transaction, whichever is greater, plus any gains earned from the investment. Improperly purchased holdings would also have to be sold.
The measure now moves to the Senate, where similar stock-trading proposals have repeatedly stalled and where Democrats have already objected to several provisions in the House bill.
Contact Newsweek editors on this story: Rebecca Flood and Emma Lee-Sang
