No Stock Act
- Bill Number
- S. 2877
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2025-09-18: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- Last Updated
- 2026-04-14T16:30:44Z
AI-Generated Summary
Purpose of the Legislation
The "No Stock Act" (S. 2877) aims to prevent conflicts of interest by prohibiting certain high-level U.S. government officials, including their spouses and dependent children, from engaging in stock trading and other specified financial activities. It seeks to ensure that these officials prioritize public service over personal financial gain, building on existing ethics rules to ban potentially insider-influenced investments.
Key Provisions
- Definitions:
- Covered individuals: Includes Members of Congress, the President, Vice President, Chief Justice and Associate Justices of the Supreme Court, members of the Federal Reserve Board of Governors, presidents or vice presidents of Federal Reserve banks, and their spouses or dependent children (under age 19 and financially dependent per tax rules).
- Covered financial interests: Broadly includes stocks (securities), futures contracts, commodities, cryptocurrencies, meme coins, tokens, non-fungible tokens (NFTs), or similar digital assets sold for profit; also covers synthetic equivalents like derivatives (e.g., options or warrants). Excludes diversified mutual funds, a spouse's job-related compensation or employer securities, U.S. Treasury securities, and certain stablecoins.
- Supervising ethics office: The relevant oversight body (e.g., Office of Government Ethics for executive branch, congressional ethics committees for lawmakers).
- Prohibitions (Section 13162):
- Covered individuals cannot hold, buy, sell, or transact in any covered financial interest.
- They cannot create a "net short position" (a bet that a security's value will drop, effectively profiting from declines).
- They cannot serve as an officer or board member of any for-profit company or entity.
- A 120-day "cooling-off" period applies after leaving office, during which the same restrictions hold to prevent immediate post-service trading based on insider knowledge.
- Divestiture Requirements (Section 13163):
- Existing covered financial interests must be sold within 120 days of either becoming a covered individual or the Act's enactment (whichever is later).
- Inherited interests after this period must be sold within 120 days of inheritance, with possible extensions (up to 150 total days, no single extension over 45 days) granted by the supervising ethics office for reasonable causes.
- Compliance and Transparency (Sections 13164–13165):
- Covered individuals must submit a written certification of compliance to their supervising ethics office.
- Ethics offices must publicly post extension requests and decisions on their websites within 30 days.
- Enforcement (Section 13166):
- Knowing violations result in fines of at least 10% of the value of the prohibited financial interest or short position.
- Rules apply to interests held in trusts where the individual is a beneficial owner (even "blind" trusts, which are setups to shield owners from direct investment decisions).
- Other Measures:
- Updates tax rules (Internal Revenue Code Section 1043) to specify who can issue "certificates of divestiture," allowing deferred taxes on forced sales (e.g., ethics offices, Judicial Conference, or congressional committees).
- Makes conforming changes to laws like the STOCK Act (which requires financial disclosures) and the Lobbying Disclosure Act to align definitions and remove outdated references.
Significant Changes to Existing Law
- Adds a new Subchapter IV to Chapter 131 of Title 5, U.S. Code, creating explicit bans on financial transactions for covered individuals—going beyond prior disclosure requirements (e.g., under the 2012 STOCK Act) to outright prohibitions.
- Expands divestiture certificate authority to include more entities (e.g., Federal Reserve Inspector General for bank officials), easing tax burdens on compliant sales.
- Applies restrictions to spouses and dependent children, a broader scope than many current ethics rules.
- Eliminates certain exceptions or cross-references in related laws (e.g., Securities Exchange Act, Lobbying Disclosure Act) to streamline enforcement and close loopholes.
- Extends rules to digital assets like cryptocurrencies, which were not explicitly covered in older ethics statutes.
Potential Impacts
- On Government Agencies: Increases administrative workload for ethics offices (e.g., reviewing certifications, extensions, and enforcing fines), potentially requiring more resources for oversight and public reporting. Federal Reserve-related entities may face new compliance processes.
- On Citizens: Enhances public trust in government by reducing risks of insider trading or conflicts, where officials might use non-public information for personal profit. No direct effects on everyday citizens' finances, but promotes fairness in financial markets.
- On International Relations: Minimal direct impact, though it could indirectly bolster U.S. credibility in global anti-corruption efforts by demonstrating stronger domestic ethics standards.
Main Stakeholders Affected
- Covered Individuals and Families: Members of Congress, executive leaders (President, Vice President), Supreme Court justices, Federal Reserve officials, and their spouses/dependent children must divest holdings and alter financial behaviors, potentially disrupting personal wealth management.
- Ethics Oversight Bodies: Supervising ethics offices (e.g., Office of Government Ethics, Senate/House Ethics Committees, Judicial Conference) gain enforcement duties, including fine assessments and public disclosures.
- Financial Institutions and Advisors: May see shifts in how they handle accounts for these officials, with increased scrutiny on trusts and divestitures.
- The Public: Benefits from greater transparency and accountability, as violations and compliance are publicized.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens federal ethics framework by imposing clear, enforceable bans with penalties, but relies on "knowing" violations for fines, which may lead to disputes over intent. Applies to blind trusts, potentially challenging common workarounds for conflicts.
- Constitutional: Could raise due process questions if divestiture timelines are seen as forcing rapid asset sales without adequate compensation, though certificates of divestiture mitigate tax losses. No apparent free speech issues, as it targets financial actions rather than expression.
- Political: Addresses long-standing concerns about congressional and executive stock trading (e.g., during policy debates), potentially reducing perceptions of corruption. As a Senate-introduced bill referred to the Homeland Security and Governmental Affairs Committee, it signals bipartisan interest in reform, but implementation may face resistance from affected officials over personal financial autonomy.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Gillibrand, Kirsten E. [D-NY]
Recent Actions
- 2025-09-18: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- 2025-09-18: Introduced in Senate
Bill Versions
- No Stock Act — issued 2025-09-18 — PDF (11 pages)