The Asymmetry
Why politicians who write securities law trade under rules they would prosecute the rest of us for breaking.
A junior accountant at a public company spends her career walking on eggshells around what she may and may not trade. Her firm's outside counsel circulates blackout calendars before every earnings cycle. She certifies — quarterly — that she has not traded on any material non-public information she may have encountered in the course of her job. If her brother-in-law calls on a Tuesday and she mentions, in passing, that the Q3 audit ran long, and he buys puts on Wednesday, the SEC's Division of Enforcement can build a tippee-liability case under the framework set out in Dirks v. SEC, 463 U.S. 646 (1983). If the personal-benefit element is met under the standard reaffirmed in Salman v. United States, 580 U.S. 39 (2016), the matter can be referred to a U.S. Attorney for criminal prosecution. She does not need to have known her brother-in-law would trade. She does not need to have profited. The mere disclosure, if reckless and the chain of inference is foreseeable, is enough.
This is the legal world ordinary working Americans inhabit. Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)), SEC Rule 10b-5 (17 C.F.R. § 240.10b-5), the line of cases from In re Cady, Roberts & Co. (1961) through Chiarella (1980), Dirks (1983), O'Hagan (1997), Salman (2016), and Martoma (2d Cir. 2018) — the entire architecture exists to enforce a single principle. You do not get to trade on information the rest of the market does not have. And if the line is blurry — if you were near the information, if you might have known — the burden of proving you did not falls on you, not on the government.
Members of Congress live in a parallel universe.
A senator who sits on the Banking Committee writes the rules under which JPMorgan Chase operates, votes on the appropriations bills that fund the regulators who audit it, and then — under current law — buys $50,000 of JPMorgan stock the next morning and discloses it within forty-five days under the Stop Trading on Congressional Knowledge Act of 2012 (Pub. L. 112-105). The maximum civil penalty for filing the disclosure late is $200, and the House and Senate Ethics Committees routinely waive even that.[^1] There is no pre-trade restriction. There is no blackout calendar. There is no certification that the trade is unrelated to non-public information learned in committee. There is no enforcement body actively reviewing the trade against upcoming legislation. There is no concept of tippee liability for the chief of staff who was in the room.
The asymmetry is not an accident. It is the entire point.
The 535 elected officials who set the rules face less restrictive trading regulations than the workers those rules govern. The standard defense is that members of Congress are held accountable by elections. The empirical record, examined honestly, does not support the defense. Ziobrowski, Cheng, Boyd, and Ziobrowski's 2004 study in the Journal of Financial and Quantitative Analysis found that a portfolio mimicking U.S. senators' common-stock purchases beat the market by roughly 85 basis points per month over a 1993–1998 window — annualized, north of ten percentage points of excess return.[^2] The follow-up House study (Ziobrowski et al., 2011, Business and Politics) found a smaller but still positive effect.[^3] Subsequent replications using post-STOCK-Act data have been more mixed; the magnitude is contested, but the direction has held up across thirty years of academic work.[^4] That is not luck distributed across one hundred people.
The reform agenda is straightforward and has been on the table for more than a decade.
The PELOSI Act — Preventing Elected Leaders from Owning Securities and Investments, S.1498 in the 119th Congress — would require members and their spouses to either divest their individual holdings within 180 days, place them in a qualified blind trust, or refrain from trading individual stocks while in office. Violators would forfeit profits to the Treasury and face penalties imposed by the ethics committees, with biennial Government Accountability Office compliance audits. The Senate Homeland Security and Governmental Affairs Committee voted to advance the bill on July 30, 2025.[^5]
Its House counterpart, the Restore Trust in Congress Act (H.R.5106), was introduced in September 2025 with sixteen original cosponsors split evenly between the parties — Reps. Krishnamoorthi (D-IL), Roy (R-TX), Magaziner (D-RI), Burchett (R-TN), Jayapal (D-WA), Fitzpatrick (R-PA), Ocasio-Cortez (D-NY), Luna (R-FL), and others.[^6] It similarly bars members, spouses, dependent children, and trustees from owning or trading individual stocks, securities, commodities, and futures, with carve-outs for diversified mutual funds and U.S. government bonds.
The argument against reform is some combination of: it would deter qualified people from running for office; it would violate the Speech or Debate Clause; it is unnecessary because members already face elections. None of these withstand scrutiny.
Federal judges, military officers, and senior executive-branch officials already operate under qualified blind-trust and divestiture regimes administered through the Office of Government Ethics under 5 C.F.R. Part 2634, with deferred capital-gains treatment under 26 U.S.C. § 1043 to make compliance feasible.[^7] The federal bench has not run dry of qualified candidates. Cabinet secretaries divest before confirmation as a matter of course.
The Speech or Debate Clause protects legislative acts. The Supreme Court has been explicit, in Hutchinson v. Proxmire, 443 U.S. 111 (1979), that informational activity outside the legislative process is not covered.[^8] In United States v. Brewster, 408 U.S. 501 (1972), the Court held that members of Congress can be prosecuted under generally applicable criminal statutes so long as the government's case does not rely on a legislative act.[^9] A personal stock trade is private commercial activity. The Clause does not reach it.
The elections-as-accountability defense ignores that ninety-seven percent of House incumbents won re-election in the 2024 cycle.[^10] The market for accountability has not, in fact, cleared.
Capitol Markets exists because public records exist and someone should read them. Every trade we surface is — without exception — a STOCK Act-disclosed filing already in the public domain at disclosures-clerk.house.gov and efdsearch.senate.gov. We do not allege wrongdoing. We do not predict future trades. We compile, time-stamp, and cross-reference public disclosures against the committee jurisdictions that govern the underlying assets. The reader draws their own conclusions.
What we are asking for, plainly, is the same standard for the rule-makers as for the rule-followers. Either the criminal-tippee framework that governs the junior accountant should not apply to her, or it should also apply, in functional form, to the senator who voted on her industry's appropriations last week. The status quo — strict liability for one and a routinely-waived $200 fine for the other — is not a defensible equilibrium. It is a privilege defended by silence.
The asymmetry will not close on its own, and journalism alone cannot close it. What journalism can do is make the record legible — every filing, every committee assignment, every conflict, in one place, in plain English.
That is what Capitol Markets is for. The full leaderboard, the conflict surface, every politician's disclosed trade, and every committee they sit on is at capitolmarkets.org. Watch a politician you want to track and we will email you within minutes of every new filing. Read the methodology so every number you see is auditable. STOCK Act disclosures were created to be read.
— Capitol Markets
Footnotes
[^1]: Stop Trading on Congressional Knowledge Act of 2012, Pub. L. 112-105 (Apr. 4, 2012). On the $200 late-filing penalty and routine waiver pattern, see NIH Ethics Program, "STOCK Act"; Campaign Legal Center, "Part 2 — The STOCK Act: The Failed Effort to Stop Insider Trading in Congress".
[^2]: Ziobrowski, A.J., Cheng, P., Boyd, J.W., Ziobrowski, B.J. (2004). "Abnormal Returns from the Common Stock Investments of the U.S. Senate." Journal of Financial and Quantitative Analysis, 39(4), 661–676.
[^3]: Ziobrowski, A.J., Boyd, J.W., Cheng, P., Ziobrowski, B.J. (2011). "Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives." Business and Politics, 13(1).
[^4]: For replication challenges, see Eggers and Hainmueller's working paper "Capitol Losses: The Mediocre Performance of Congressional Stock Portfolios" — the magnitude of the Senate effect has been debated in subsequent work, though most studies find positive excess returns directionally.
[^5]: S.1498, 119th Congress (2025–2026), Preventing Elected Leaders from Owning Securities and Investments Act. Sen. Hawley (R-MO), with Sens. Moreno, Ossoff, Peters, Merkley. Advanced out of Senate Homeland Security and Governmental Affairs Committee, July 30, 2025.
[^6]: H.R.5106, 119th Congress (2025–2026), Restore Trust in Congress Act. Sponsored by Rep. Krishnamoorthi (D-IL) with bipartisan cosponsors per the joint Magaziner / Roy / Jayapal release.
[^7]: 5 C.F.R. Part 2634, "Executive Branch Financial Disclosure, Qualified Trusts, and Certificates of Divestiture"; 26 U.S.C. § 1043 (deferred capital-gains for compliance divestitures); OGE Certificate of Divestiture fact sheet.
[^8]: Hutchinson v. Proxmire, 443 U.S. 111 (1979) — newsletters, press releases, and broadcast communications by Members are not covered by the Speech or Debate Clause.
[^9]: United States v. Brewster, 408 U.S. 501 (1972) — Members of Congress may be prosecuted under generally applicable criminal statutes when the case does not rely on legislative acts or motivation.
[^10]: OpenSecrets, "Reelection Rates Over the Years"; U.S. Term Limits, "97% of Incumbents Win Re-Election in 2024"; Ballotpedia, "Election results, 2024: Incumbent win rates by state".
Public record. STOCK Act-disclosed trades referenced here are legal under existing law. This piece argues for legislative change. It is not an accusation of insider trading or any other crime against any named individual.