Congressman Calls For Ban On Stock Trading In Congress, Yet Discloses 25 Pages Of Trades. What Is Going On?

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12 May 2024

A leading member of Congress recently disclosed numerous stock purchases and sales, sparking questions about the integrity of calls for stricter regulations.

Representative Ro Khanna disclosed multiple stock transactions in a filing on May 7, mostly involving trades ranging from $1,000 to $15,000, with some reaching higher amounts. The largest reported sale was of the iShares Russell 1000 Value ETF (IWD:US) valued at $250,000 to $500,000, with another significant transaction involving GE Aerospace (GE:US) valued at $50,000 to $100,000.

However, the disclosure raised eyebrows, especially considering Khanna's recent advocacy for a ban on stock trading by members of Congress. Critics pointed out the potential conflict of interest, as lawmakers have access to non-public information and the ability to influence legislation that may impact their stock holdings.

Khanna defended his actions, stating that he and his wife's investments are managed by a third party like an index fund, effectively making them diversified. He reiterated his support for banning members of Congress from trading stocks, emphasizing his votes against defense budgets and for holding corporations accountable as evidence of his independence.

The timing of Khanna's disclosure, following his call for a vote on banning congressional stock trading, has raised suspicions. Despite Khanna's assurance that his investments are independently managed, skepticism remains regarding lawmakers' financial activities.

Khanna's message to his colleagues underscores growing public frustration with congressional stock trading practices. He urged House Speaker Mike Johnson to bring a bipartisan bill to ban members of Congress from trading stocks for a vote, citing support from websites like Unusual Whales, Quiver Quant, and Capitol Trades.

While Khanna's disclosure may align with regulations regarding third-party management of investments, the optics of his trades amidst advocacy for stricter regulations cast doubt on the sincerity of his calls for reform. As scrutiny over congressional stock trading intensifies, the need for transparency and accountability in government remains a pressing issue.