Prohibition of congressional short selling of financial investments

Chapter 131 of title 5, United States Code, is amended by adding at the end the following (and by conforming the table of contents for such chapter accordingly):

Prohibition on Congressional Short Selling

13151.

Definitions

In this subchapter: (1)

Covered financial instrument

The term covered financial instrument means— (A)any investment in— (i)a security (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); (ii)a security future (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); or (iii)a commodity (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)); and (B)any economic interest comparable to an interest described in subclause (I) that is acquired through synthetic means, such as the use of a derivative, including an option, warrant, or other similar means. (2)

Covered individual

The term covered individual means any of the following: (A)A Member of Congress. (B)The spouse of a Member of Congress. (C)The dependent of a Member of Congress. (3)

Dependent

The term dependent has the meaning given that term in section 13101. (4)

Member of Congress

The term Member of Congress has the meaning given that term in section 13101. (5)

Short sale

The term short sale has the meaning given that term in section 242.200 of title 17, Code of Federal Regulations (or any successor regulation). (6)

Supervising ethics office

The term supervising ethics office has the meaning given that term in section 13101.

13152.

Limitation on short sale

(a)

In general

No covered individual may engage in a short sale of any covered financial instrument issued by any business entity that is listed on a national stock exchange. (b)

Income tax

A loss from a short sale involving a covered financial instrument that is conducted in violation of this section may not be deducted from the amount of income tax owed by the covered individual. (c)

Proof of compliance

(1)

Submission

A Member of Congress shall submit to the supervising ethics office a pledge of compliance with the requirements of this subchapter, and shall produce, upon request of the supervising ethics office, material or information determined by the supervising ethics committee to be necessary to indicate compliance with the provisions of this subchapter. (2)

Certificate

The supervising ethics office shall provide each Member of Congress in compliance with the provisions of this chapter with a certificate of compliance. (3)

Publication

The supervising ethics office shall make available, on a publicly accessible website, all certificates issued under this subsection.

13153.

Enforcement

(a)

Referral

The supervising ethics office shall refer to the Attorney General the name of any covered individual who such office has reasonable cause to believe has willfully failed to comply with the requirements of section 13152. (b)

Penalty

(1)

In general

The Attorney General may bring a civil action in any appropriate United States district court against any covered individual who knowingly and willfully fails to comply with section 13152. The court in which such action is brought may assess against such individual a civil penalty in any amount, not to exceed $50,000. (2)

Limitation

A covered individual may not pay any penalty resulting from a civil action under paragraph (1) using— (A)funds from a Members’ Representational Allowance or Senators’ Official Personnel and Office Expense Account (as the case may be); or (B)funds of any political committee under the Federal Election Campaign Act of 1971 (52 U.S.C. 30101 et seq.).