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97 members of Congress report stock trades tied to committee briefings

Yahoo Finance columnist Rick Newman details a new New York Times report that found 97 lawmakers reported stock trades that overlapped with their work in Congress.

Video Transcript

[AUDIO LOGO]

SEANA SMITH: 97 members of Congress have reported financial transactions that could be influenced by their committee assignments. This comes from a "New York Times" analysis of transactions between 2019 and 2021. Yahoo Finance's Rick Newman joins us now.

Rick, I know you've done a lot of reporting on this in the past. We have talked about a ban, potentially, for Congress members and their family just in terms of what stocks they are able to trade, yet we still haven't seen much movement on this. Are we ever going to?

RICK NEWMAN: Well, guess who would have to enact the ban on--

SEANA SMITH: Yeah.

RICK NEWMAN: --members-- of members of Congress trading stocks? It would have to be-- Congress would have to impose this ban on itself. So you're right, this has gotten a lot of attention. There-- I mean, there are no limitations on what stocks members of Congress can buy.

And there clearly are times when they could be getting classified briefings. They could know that some legislative change is coming before it's publicly known. All kinds of things could happen that could affect company valuations. So the "Times" kind of went one step further, and they looked at stock trades for seven-- 97 members, as you mentioned, that seemed to affect companies that could have been affected by some kind of legislation put forward or some kind of action by committees that these members actually sat on.

So just to give you a couple of quick examples, Richard Burr, Republican Senator from North Carolina, he and his wife were buying health care companies when he was getting briefings on COVID. And some of those were confidential briefings as a member of the Senate subcommittee that oversees health and related things. Zoe Lofgren, a Democrat in the House, her husband traded stocks in some pharmaceutical companies when the Judiciary Committee, which she sat on, was considering legislation to raise-- lower drug prices.

So, I mean, these are things that can have-- these are measures from Congress that could have a material effect on company valuations and stock prices. And it's-- I mean, there's a clear problem here. You don't have to be a finance professor to say something's wrong with this picture.

SEANA SMITH: Yeah.

DAVID BRIGGS: Rob Portman, the senator from Ohio, not on that list because he's retiring. He chose not to trade stocks. He has urged Congress to codify this. What did the Stock Act do in 2012? And is there anyone not retiring that's pushing this forward?

RICK NEWMAN: Right. So the Stock Act, it required new types of disclosure but nothing that would solve the problem that we're talking about here, Dave. And, I mean, let's put this in kind of a common sense perspective. If, let's say, you were to enact a ban on trading individual stocks but you still allowed members of Congress to trade ETFs and things like that.

I mean, I've looked at-- you know, how much value would you actually give up if you couldn't trade Facebook but, let's say, you could trade any sector ETF, you could do an S&P 500 fund and things like that? You would still be able to cash in on all the gains in the stock market. You just would not be able to gamble on individual companies. And that actually seems like a common sense thing. But, again, there's not a lot of evidence that Congress is going to enact any kind of ban like this.

RACHELLE AKUFFO: And, Rick, it's interesting because we put up that poll showing both Democrats and Republicans really in favor of this. But then who's going to end up actually pushing for it at this point?

RICK NEWMAN: Good government groups, I mean, the types of watchdog groups in Washington that are typically pushing for good government stuff. You know what might make a difference? What if Biden were to take this up as president? He has not really said a lot about this. It's probably too late for the midterm elections. It doesn't seem like he's going to toss a new issue into the mix, but who knows.

Poll after poll shows Americans are really disgusted with the political system. Even though Congress has been passing some laws lately, perhaps this could be a 2024 presidential issue if enough Americans get riled up. But we need somebody to take it up as their cause, a prominent candidate or an incumbent running for re-election to take it up as their cause and clean up the-- what did Trump call it-- the swamp. It looks pretty swampy.

SEANA SMITH: Yeah, exactly. Like you started off with, it's the lawmakers, the Congress members, that would need to pass this. And right now there certainly is not enough support for it.

RICK NEWMAN: Right.

SEANA SMITH: So until that changes, I don't think we're going to see a heck a lot of movement there. Rick Newman, thanks so much for--

RICK NEWMAN: Thanks, guys.

SEANA SMITH: --coming on set with us.