HB4036, the “No Shorting America Act,” would amend federal ethics law in title 5 of the U.S. Code to prohibit Members of Congress, along with their spouses and dependents, from engaging in short sales of covered financial instruments. The bill defines covered financial instruments broadly to include securities, security futures, commodities, and comparable economic interests obtained through synthetic means such as derivatives, options, and warrants, so long as the instrument is issued by a business entity listed on a national stock exchange.
The bill also creates a compliance and enforcement framework. Members of Congress would have to submit a pledge of compliance to their supervising ethics office, which would issue certificates of compliance and post them publicly. If the ethics office has reasonable cause to believe a covered individual willfully failed to comply, it must refer the matter to the Attorney General. The Attorney General could then bring a civil action and seek penalties of up to $50,000. Any loss from a prohibited short sale could not be deducted from the individual’s income taxes, and any civil penalty could not be paid with congressional office funds or campaign funds.
Impact
If enacted, the bill would add a new subchapter to chapter 131 of title 5, expanding congressional ethics restrictions to specifically bar short selling by Members of Congress and their immediate family members. It would affect federal ethics oversight procedures, require public certification of compliance, and authorize civil enforcement by the Department of Justice. The measure would also interact with tax law by disallowing deductions for losses from prohibited short sales, and it would constrain the use of official or campaign funds to pay any resulting penalties.
Sentiment
The available record shows no committee debate, recorded votes, or amendments, so there is no documented floor or committee sentiment in the materials provided. Based on the bill’s title and structure, it appears to be framed as an ethics and anti-conflict-of-interest measure aimed at increasing public confidence in Congress’s financial conduct. The absence of opposition or support statements in the record means sentiment cannot be measured directly from the provided context.
Contention
The main potential point of contention is the breadth of the prohibition, which extends beyond Members of Congress to spouses and dependents and covers not only direct short sales but also synthetic or derivative-based economic interests. Another likely issue is enforcement: the bill gives ethics offices a role in compliance certification and referral, while authorizing DOJ civil actions and penalties up to $50,000. Questions could also arise over how the rule would be administered, what counts as comparable synthetic exposure, and whether the restriction is overinclusive or difficult to monitor in practice.