Do insider trading laws do enough to prevent NC lawmakers from losing public trust?
AI-generated summary reviewed by our newsroom.
- The 2012 STOCK Act requires public reporting of members' trades over $1,000 in 45 days.
- Prosecutors have never secured a STOCK Act criminal conviction; enforcement gaps persist.
- Many North Carolina lawmakers own stocks or funds; reform bill gets hearing.
It is far from unusual for a member of Congress to be accused of insider trading or other violations of a law that governs what they can do with their investments.
What is unusual is for a member to face significant repercussions for violations of that law.
In fact, prosecutors have never successfully brought a criminal case against someone for violating the Stop Trading on Congressional Knowledge Act of 2012, better known as The STOCK Act, according to Jim Copland, director of legal policy at the Manhattan Institute, a public policy think tank.
The STOCK Act bans the executive and judicial branches and their staffs from trading on nonpublic information they gained from working for the government.
In September, Reps. Chip Roy, a Republican from Texas, and Seth Magaziner, a Democrat from Rhode Island, introduced a new version of the STOCK Act, which would prevent “all Members of Congress, their spouses, dependent children, and their trustees from owning, buying or selling individual stocks, securities, commodities, or futures,” with some exceptions.
Copland was among those who testified Wednesday at a congressional hearing on the new bill, telling lawmakers that they may not be adequately policing themselves under the STOCK Act because violations of the law are so hard to prove.
If the bill doesn’t gain traction in committee, there is bipartisan support for an effort by Rep. Anna Paulina Luna, a Republican from Florida, to circulate a petition that could maneuver the bill past Speaker Mike Johnson and force a floor vote. To do so, the petition would need 218 signatures.
In a news release, Luna said banning lawmakers’ stock ownership would put to rest “growing concerns of insider conflicts” and restore “public trust in Congress by ensuring that lawmakers cannot profit from nonpublic information or legislative influence.”
The origins of the STOCK Act
In January 2012, after a series of allegations of insider trading against members of Congress, including in a “60 Minutes” episode cited in congressional records, then-Sen. Joe Lieberman, a Democrat from Connecticut, filed a bill to ensure that insider trading laws applied to members of Congress. Then-Rep. Tim Walz, now governor of Minnesota and the 2024 Democratic candidate for vice president, introduced a House version of the bill.
Not only did it aim to ensure that lawmakers weren’t using their positions to financially benefit, it required them to report trades over $1,000 within 45 days and that those reports be made publicly available and online.
In 2012, several lawmakers said on the floors of their chambers, according to congressional records, that they were shocked to learn they were not covered by insider trading laws when experts testified about the subject in a 2011 congressional hearing. Lieberman drafted his bill to ensure a ban was crystal clear.
“We cannot derive personal profit from using nonpublic information that we gain as a result of our public offices,” Lieberman said on the Senate floor in 2012, while asking his colleagues to support his bill. “That is made absolutely clear by stating that indeed we do have a duty of trust to the Congress, to the government of the United States and most importantly, to our constituents, to the people who were good enough to send us here.”
His bill had bipartisan support.
Then-Rep. Ted Poe, a Republican from Texas, said on the House floor that Congress could not afford to lose the trust of the American people.
“Insider trading, any way you look at it, is not only illegal, in the United States, but it is corrupt and morally wrong,” Poe said. “In Washington and in Congress, things must not only be right; they must look right. And that’s just the way it is.”
But even with passage of the law, studies by the Campaign Legal Center found the STOCK Act did little to curb Americans’ distrust of Congress when it came to investments.
Who owns stocks?
CLC looked at the financial disclosures of Congress filed in 2025 and found that only 6% of members did not own stock or widely held investment funds. And only 2% of lawmakers had a qualified blind trust, meaning their assets are managed independently with little communication to avoid conflicts of interest.
CLC reported that six of North Carolina’s members had their money in widely held investment funds such as mutual funds or large pension funds, but not in individual stocks:
- Alma Adams
- Don Davis
- Valerie Foushee
- Richard Hudson
- Greg Murphy
- Ted Budd
Another nine members had both widely held investment funds and stocks:
- Chuck Edwards
- Virginia Foxx
- Pat Harrigan
- Mark Harris
- Brad Knott
- Tim Moore
- Deborah Ross
- David Rouzer
- Thom Tillis
North Carolina’s representation looked very different when the STOCK Act of 2012 came up for a vote. Neither Tillis nor Budd were senators yet. And only Foxx served in the House.
All of North Carolina’s lawmakers except for then-Sen. Richard Burr, a Republican from Winston-Salem, voted to pass the STOCK Act. He was one of only three senators and two members of the House to vote against the bill.
Allegations of insider trading and STOCK Act violations
At the time, Indy Week reported Burr called the bill “ludicrous” in a radio interview, saying there were already laws that prevented Congress from insider trading.
Eight years later, Burr would be at the center of an insider trading investigation, accused of avoiding an estimated $87,000 in losses and gaining more than $164,000 due to the timing of his stock sales ahead of the COVID-19 pandemic. In public and private statements, Burr made it clear he knew more about how the virus would affect the United States than the average American.
But Burr was never charged with a crime, and the Securities and Exchange Commission cleared him of any wrongdoing years later.
He still faced fallout, including stepping down from his chairmanship on the Senate Intelligence Committee.
In Wednesday’s committee hearing, Chairman Bryan Steil, a Republican from Wisconsin, brought up the allegations against Burr, saying at a minimum there was “an appearance of impropriety.”
“The standard for insider trading is incredibly high to prove,” Steil said. “It happens on occasion. There are members who have been charged and convicted of insider trading. Under the STOCK Act we’re looking for Congress to police itself without the traditional apparatus of a judicial process.”
Former Rep. Madison Cawthorn, a Republican from Hendersonville, was also accused of insider trading. His scandal centered on promoting cryptocurrency that he held a vested interest in, and purchased at a reduced rate due to his position.
The STOCK Act was created before cryptocurrency, so Cawthorn didn’t violate that law, but the House Committee on Ethics fined him $15,000 for an ethics violation. Bills have been put forward to add crypto to the STOCK Act but none have yet passed.
Harrigan, a Republican from Hickory, and Moore, a Republican from Kings Mountain, are both investors in cryptocurrency.
Moore is one of several lawmakers from North Carolina who have faced allegations involving the STOCK Act, but first-time violations amount to a $200 fine when handled by the congressional ethics enforcement process, and are not public record.
Moore failed to turn in disclosures of hundreds of thousands of dollars in trades within 45 days. He told Fortune Magazine that that was due to a technical issue.
That’s a similar response to the one Tillis, a Republican from Huntersville, gave to Raw Story in 2023, after he failed to file a disclosure for nine months. He told the outlet that was due to processing errors.
In 2022, then-Rep. Kathy Manning, a Democrat from Greensboro, repeatedly failed to report her trades in a timely manner.
The Campaign Legal Center contends that if stricter enforcement of the STOCK Act or an outright ban on trading doesn’t take place, it will allow further deterioration in the trust of Congress.
Several bills have been proposed over the years to add further restrictions.
Some go as far as banning lawmakers and their immediate family from trading, some require investments to be placed into a blind trust and some substantially raise the penalty for failing to report.
Until Wednesday, none of the bills filed this session had moved since introduction. But a discharge petition would allow Luna to force a vote if she collects enough votes from her colleagues. President Donald Trump endorsed her efforts.
Meanwhile, Luna herself was among those being questioned about her ethics due to investments she made into America First Natural Resources LLC, whose founder is one of her donors and an organization that could benefit from her position on the House Natural Resources Committee. Her staff said the investments weren’t stocks.
This story was originally published November 20, 2025 at 5:00 AM.
