The Rules — Congress vs. Everyone Else Accurate as of July 24, 2026
The written rules, side by side, with a citation on every row. The reader draws the conclusions.
Disclosure requirements
What each group must reveal about its own trading, and when.
| Members of Congress | Corporate insiders (officers, directors, 10% owners) | General public | Sources | |
|---|---|---|---|---|
| Must trades be reported? | Yes — Periodic Transaction Report for any securities transaction over $1,000 (STOCK Act, 2012). | Yes — SEC Form 4 for transactions in the issuer's securities (Securities Exchange Act §16(a)). | No reporting obligation. | [1] [2] |
| Deadline to disclose | 30 days from becoming aware of the transaction; never more than 45 days after it. | 2 business days. | — | [1] [2] |
| What must be disclosed | Broad dollar ranges (e.g., "$15,001–$50,000"). Exact amounts, share counts, and prices are not required. | Exact number of shares, price per share, and resulting holdings — machine-readable on SEC EDGAR. | — | [1] [2] |
| Standard penalty for a late filing | $200 late-filing fee. | No fixed fee — late Form 4s are subject to SEC enforcement and must be flagged in the company's proxy statement. | — | [1] [2] |
| Mandatory trading blackouts or cooling-off periods | None required by law — members may trade while legislation affecting the security is pending before them. | Rule 10b5-1 trading plans require a cooling-off period (up to ~120 days for officers and directors); companies commonly impose earnings blackout windows. | None. | [1] |
| Required to divest or use a blind trust? | No. Qualified blind trusts exist but are optional and rare. | No divestiture requirement; holdings are simply public in exact detail. | — | [1] |
Sources: STOCK Act (Pub. L. 112-105) · 15 U.S.C. §78p · STOCK Act §6 · SEC Forms 3, 4, 5 · House Ethics financial disclosure rules · SEC EDGAR · Senate Select Committee on Ethics · 17 C.F.R. §240.10b5-1 · Senate qualified blind trusts
Insider-trading law & enforcement
The law on paper is nearly identical for everyone. The rows below state the written law and the structural differences in how it can be enforced.
| Members of Congress | Corporate insiders | General public | Sources | |
|---|---|---|---|---|
| Is trading on material non-public information illegal? | Yes — the STOCK Act affirms members owe a duty and are not exempt from securities-fraud law (Rule 10b-5). | Yes — Rule 10b-5; plus §16(b) lets the company claw back any profit on buy/sell pairs within 6 months, violation or not. | Yes — Rule 10b-5 under the misappropriation theory. | [1] [2] [3] |
| Maximum criminal exposure | Same statute on paper: up to 20 years and $5,000,000 per violation for individuals (Exchange Act §32). | Up to 20 years and $5,000,000 per violation for individuals. | Up to 20 years and $5,000,000 per violation for individuals. | [1] |
| Civil monetary penalty (separate from any criminal fine) | Same statute on paper: a civil penalty of up to three times the profit gained or loss avoided (Exchange Act §21A) — no fixed dollar cap — plus disgorgement of the gain. | Up to three times the profit gained or loss avoided (§21A), plus disgorgement. | Up to three times the profit gained or loss avoided (§21A), plus disgorgement. | [1] [2] |
| Profit clawback mechanism | None. No statute unwinds or recovers a member's trade — the $200 late fee is the only routine penalty in practice. | §16(b) short-swing profits are recoverable by the issuer; SEC disgorgement in enforcement actions. | Disgorgement in SEC enforcement actions. | [1] [2] |
| Structural barriers to prosecution | The Constitution's Speech or Debate Clause shields legislative acts and materials, complicating any case built on what a member learned through official duties. | None specific to the role. | None. | [1] [2] |
| Track record under the rules above | No member of Congress has been convicted under the STOCK Act's trading provisions since its 2012 passage. (Related convictions — e.g., United States v. Collins, S.D.N.Y. 2019 — rested on corporate-board information under general securities-fraud law, not congressional knowledge.) | The SEC brings dozens of insider-trading enforcement actions every year. | Regularly prosecuted, civilly and criminally. | [1] [2] |
| Who investigates and charges it | The SEC brings the civil case; the Department of Justice, with the FBI, brings any criminal case. | The SEC brings the civil case; the Department of Justice, with the FBI, brings any criminal case. | The SEC brings the civil case; the Department of Justice, with the FBI, brings any criminal case. | [1] [2] |
| A documented outcome | Sen. Richard Burr sold more than $1.6 million days before the 2020 market crash; the DOJ closed its criminal case with no charges (2021) and the SEC closed with no action (2023). | Rajat Gupta, a Goldman Sachs director, was convicted in 2012 of passing boardroom information to a hedge-fund manager and sentenced to two years in prison. | Hedge-fund manager Raj Rajaratnam was convicted in 2011 and sentenced to 11 years — then the longest insider-trading sentence in U.S. history — with a $10 million fine and $53.8 million forfeited. | [1] [2] [3] |
Sources: STOCK Act §4 · 17 C.F.R. §240.10b-5 · 15 U.S.C. §78p(b) · 15 U.S.C. §78ff · 15 U.S.C. §78u-1 (Exchange Act §21A) · SEC — $13.9M civil penalty against Gupta (2013) · CRS report R42460 · U.S. Const. art. I, §6 (annotated) · SEC Division of Enforcement · DOJ Criminal Division, Fraud Section · Burr — full case file · DOJ, S.D.N.Y. — Gupta convicted (2012) · DOJ, S.D.N.Y. — Rajaratnam sentenced (2011)
These tables state the written rules with citations to the primary sources. They are a summary, not legal advice; the statute text governs. Spot an error? Use the Comment or Suggestion link — corrections are logged on the Methodology page.