FOR FORCED DIVERSIFICATION:

The primary issue with members of Congress trading stocks is that they have access to inside information which they could profit from. Of course, insider trading by members of Congress is illegal under the STOCK Act of 2012, but it isn't easy to prove when it occurs.

Legality aside, the real issue with Congress trading stocks is that it seems so unfair to everyone else. It's unfair that a group of people with access to inside information also has no restrictions on their investment behavior. For crying out loud, every large financial institution in the U.S. has restrictions on what their employees can buy/sell, but not Congress.

You might argue that members of Congress are special and should be allowed some extra privileges. I am all for that as long as these privileges don't adversely impact anyone else.

"Oh, you used to be in Congress? Come speak at my event for $10,000."

I don't have a problem with this (though you may), but I do have a problem with members of Congress being able to trade stocks without any sort of restrictions. Unlike an increased speaking fee or a fancy job offer, other market participants could be harmed by this privilege. As a result, we need to make a change. [...]

My solution to this problem is very simple--ban buying of all individual stocks, options, and securities not on a pre-approved list. That's it. Members of Congress can sell whatever they want, but they can only buy diversified index funds/ETFs that provide broad exposure to global asset classes.

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