Stop Corrupt Trading Act
- Sponsor
- Sen. Padilla, Alex [D-CA]
- Last action
- Aug 4, 2026
Bottom line
This bill aims to prevent the President and Vice President from profiting from their unique access to sensitive government information by criminalizing its sale or exchange and penalizing its purchase by anyone.
What it actually does
This bill creates a new federal crime and civil offense for the misuse of nonpublic information by the President, Vice President, and any entities they control. It also prohibits any other person from acquiring, purchasing, selling, or exchanging such information for financial benefit. The bill defines 'nonpublic information' as that gained through official position and not publicly available, including confidential or protected information, and establishes criminal penalties including fines and imprisonment, as well as civil penalties like disgorgement and substantial fines.
Proponents argue
Supporters argue this bill is crucial for restoring public trust in government by ensuring that the highest elected officials cannot personally enrich themselves or their controlled entities through privileged access to information. They contend it closes a significant ethics loophole, promotes transparency, and holds powerful individuals accountable, thereby strengthening democratic institutions and preventing conflicts of interest.
Opponents contend
Critics might argue that existing ethics laws are sufficient, or that the definitions of 'nonpublic information' and 'financial benefit' could be overly broad, potentially leading to unintended consequences or chilling legitimate communications. Some might also raise concerns about the scope of criminalization for 'other persons' who acquire such information, suggesting it could inadvertently ensnare individuals without malicious intent.
The bill is concise and relatively straightforward, allowing for a quick and comprehensive understanding by an informed reader.
Section 2(a), adding 18 U.S.C. § 228(a)(1) and (2)
Definitions of Covered Entity and Covered Person
This provision defines 'covered person' as the President or Vice President. It defines 'covered entity' as any firm, partnership, association, corporation, or other entity that a covered person or their immediate family controls, or in which a covered person beneficially owns at least a 5 percent financial interest in equity, profits, or revenue. These definitions establish who is primarily subject to the bill's prohibitions.
Supporters argue
Supporters argue these definitions are essential to clearly delineate the scope of the bill, ensuring that the highest executive officials and their closely associated financial interests are explicitly covered, thereby preventing evasion through proxies or family members.
Critics contend
No specific opposition is typically raised against these definitional provisions themselves, though broader concerns about the scope of the bill might implicitly critique who is designated as a 'covered person' or 'entity'.
Tradeoffs
The definitions aim for clarity and broad coverage to prevent loopholes, balancing the need for precise legal language with the goal of comprehensive ethical oversight.
Section 2(a), adding 18 U.S.C. § 228(a)(3)
Definition of Nonpublic Information
This provision defines 'nonpublic information' as information a covered person gains through their official position that they know or reasonably should know has not been made public. This includes information exempt from public disclosure, designated confidential, or not authorized for public release. It also specifically includes statements or communications made available via API or other means not equally accessible to the general public.
Section 2(a), adding 18 U.S.C. § 228(b)(1)
Prohibition on Sale/Exchange by Covered Persons and Entities
This provision explicitly prohibits any 'covered person' (President or Vice President) or 'covered entity' (their controlled or significantly owned firms) from entering into a transaction to sell or exchange nonpublic information for financial benefit. This is the core prohibition targeting the direct monetization of privileged information by the highest executive officials.
Section 2(a), adding 18 U.S.C. § 228(b)(2)
Prohibition on Purchase or Sale by Other Persons
This provision extends the prohibition to 'any person' (not just covered persons or entities) from entering into a transaction to acquire, purchase, sell, or exchange nonpublic information for financial benefit. This means that individuals or entities attempting to buy such information from a covered person, or to trade it among themselves, would also be in violation.
Section 2(a), adding 18 U.S.C. § 228(c)
Criminal Penalties and Forfeiture
This provision establishes criminal penalties for violations. For covered persons or entities, the punishment includes a fine of not more than double the value of the transaction (deposited in the Treasury) or imprisonment for not more than 5 years, or both. For other persons, the punishment is a fine of not more than double the value of the transaction (deposited in the Treasury). Additionally, courts must order the forfeiture of any property derived from the offense.
Section 2(a), adding 18 U.S.C. § 228(d)
Civil Enforcement and Disgorgement
This provision authorizes the Attorney General to bring civil actions against violators, regardless of whether criminal charges are filed. Remedies include disgorgement of all profits, a civil penalty of up to $250,000 or three times the gain (whichever is greater), and equitable relief like injunctions or constructive trusts. The standard of proof for civil actions is a preponderance of the evidence. The statute of limitations is 6 years, but it is tolled while the defendant or the covered person from whom the information was derived holds the office of President or Vice President. Covered entities and knowing counterparties are jointly and severally liable. The OGE Director must refer credible evidence to the Attorney General and notify Judiciary Committees.
The statute of limitations for civil actions is 6 years, but this period is explicitly tolled (paused) during any time the defendant, or the covered person from whose position the nonpublic information was derived, holds the office of President or Vice President.
Section 2(a), adding 18 U.S.C. § 228(d)(3)
Why it matters:This is a standard legislative practice for specifying legal procedural details. However, its significance for high-profile officials makes it a critical, though easily missed, element.
Case for: Supporters argue this tolling provision is essential to prevent high-ranking officials from using their time in office to evade accountability, ensuring that investigations and prosecutions can proceed once they leave office, regardless of when the alleged offense occurred.
Case against: Critics might argue that such a lengthy or tolled statute of limitations could create a perpetual cloud of potential litigation over former officials, potentially impacting their post-presidency activities or creating opportunities for politically motivated investigations long after the fact.
Estimated impact: Significantly extends the period during which civil actions can be brought against former Presidents and Vice Presidents, potentially by many years.
Covered entities and any person who knowingly provides anything of value in a prohibited transaction are made jointly and severally liable for the civil remedies (disgorgement, civil penalties, equitable relief) with respect to that transaction.
Section 2(a), adding 18 U.S.C. § 228(d)(4)
Why it matters:This is a technical legal detail common in statutes that aim to hold multiple parties accountable for a single offense. It's standard practice to define the scope of liability.
Case for: Proponents argue that joint and several liability is crucial for effective enforcement, ensuring that all parties involved in a corrupt transaction, including those who facilitate it or knowingly benefit, are held financially accountable, thereby deterring complicity.
Case against: Critics might argue that extending joint and several liability to 'any person that knowingly provides anything of value' could be overly broad, potentially ensnaring individuals or entities whose involvement was peripheral or who may not have fully understood the illicit nature of the transaction, leading to disproportionate penalties.
Estimated impact: Expands the pool of individuals and entities that can be held financially responsible for violations, increasing the likelihood of recovering illicit gains.