Pelosi Will Hate This Bipartisan Bill Introduced to the Floor - Here's What It Does
Two members of Congress have introduced legislation that would ban members of Congress from buying and selling of stocks.
Over the years, conflicts of interest and stock transactions by members of subcommittees have drawn criticism from the public. Members of Congress beat the S&P 500 Index in 2022.
A bill banning Congressional stock trading from New York Democrat Sen. Kirsten Gillibrand and Missouri Republican Sen. Josh Hawley was introduced Wednesday.
Under the terms of the bill, members of Congress, the president, vice president, employees of the executive branch and Capitol Hill aides would not be able to own stocks in individual companies, even those located in blind trusts. The parties mentioned would be able to own mutual funds and index funds.
As reported by the Wall Street Journal, the bipartisan legislation comes as polling has shown strong public support for such a ban.
“It is critical that the American people know that their elected leaders are putting the public first, not looking for ways to line their own pocket,” Gillibrand said in a statement.
The bill calls for penalties for those who violate the rules, including forfeiture of any profits from the trading and fines of $10,000 or more.
Hawley previously introduced the PELOSI Act, known officially as the Preventing Elected Leaders from Owning Securities and Investments Act, which would have banned members of Congress and their spouses from holding and trading stocks and options.
“As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again,” Hawley said at the time.
Former Speaker of the House Nancy Pelosi’s stock trading is among the most-watched in Congress, due to her trading outperformance much of the time and large trades she has made prior to legislative action that is related to the stocks being traded.
Pelosi’s husband, Paul Pelosi, is a venture capitalist who often engages in stock trading activities. Nancy Pelosi was previously asked during a press conference about conflicts of interest and whether her husband ever receives information from her. The congresswoman said no.
Members of Congress and the executive branch are allowed to buy and sell stocks and options as long as they follow disclosure rules. Members are expected to trade based on public information and not base trades on private information or potential conflicts of interest.
UnusualWhales, which tracks Congressional trading activity and puts out an annual list of the best-performing traders, has highlighted conflicts of interest and the impact of lobbying and stock trading on politics.
“There were gross inequities in information, education and access for the everyday trader,” the founder of UnusualWhales previously told financial news outlet Benzinga. “Retail (traders) are the future.”
UnusualWhales previously highlighted trades made by Pelosi that came in proximity to Congressional action.
“A lot of the trades were seemingly around, or as a result of, deals that would not be known to the average trader,” the watchdog group founder observed.
The tracking of Congressional trading activity led to the creation of two ETFs in partnership between UnusualWhales and Subversive Capital.
The Unusual Whales Subversive Democratic Trading ETF (BATS: NANC) and the Unusual Whales Subversive Republican Trading ETF (BATS: KRUZ) “allow investors to secure returns that their elected representatives enjoy by law.”
Investors continually monitor the trading activities of members of Congress and have spotted many unusual trades, including ones made around the collapse of several regional banks that came with government involvement.
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