S. 1498 — Halting Ownership and Non-Ethical Stock Transactions (HONEST) Act

This section amends Chapter 131 of title 5, United States Code, by adding a new subchapter prohibiting Members of Congress and their spouses from holding, purchasing, or selling covered financial instruments (i.e., securities as defined in 15 U.S.C. 78c(a), security futures, commodities as defined in 7 U.S.C. 1a, and comparable synthetic interests such as derivatives, excluding diversified mutual funds, exchange-traded funds, U.S. Treasury bills/notes/bonds, and spousal/dependent child compensation from a primary occupation) during the Member's term of service. The prohibition does not apply to sales completed within 180 days of enactment (for current Members) or the start of a new term (for subsequent Members). (Thus, Members must divest all such holdings within that timeframe or face disgorgement of profits to the U.S. Treasury and civil fines.) The section further (1) requires annual compliance certifications from Members, to be published online by the supervising ethics committees (i.e., Senate Select Committee on Ethics and House Committee on Ethics); (2) authorizes those committees to issue rules, guidance, good-faith divestment extensions, and civil fines equal to 10% of the value of each undivested covered financial instrument every 30 days following notice and an opportunity for hearing; (3) requires public disclosure of fines, reasons, and hearing outcomes; and (4) permits Members to appeal fines via privileged floor vote.