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Senator introduces bill to ban lawmakers from trading stocks, names law after Pelosi

By Sarah May
|
January 25, 2023

In something of a swipe at former House Speaker Nancy Pelosi (D-CA), whose family has attracted scrutiny in recent years for making millions in the stock market, Sen. Josh Hawley (R-MO) has just introduced an aptly-named bill designed to ban members of Congress from owning and trading stocks, as The Hill reports.

Calling his proposed measure the PELOSI Act (the Preventing Elected Leaders from Owning Securities and Investments Act), Hawley is reigniting what has been an ongoing debate about whether lawmakers should engage in securities trading while they are privy – by virtue of their offices – to information ordinary traders may not have.

“PELOSI Act” unveiled

Hawley took to Twitter on Tuesday to announce the measure, declaring, “Members of Congress and their spouses shouldn't be using their position to get rich on the stock market – today I'm introducing legislation to BAN stock trading & ownership by members of Congress. I call it the PELOSI Act.”

This is not the first time Hawley has attempted to push legislation meant to curtail stock trading, holding, and profiting on the part of lawmakers and those to whom they are married, and the prolific securities activity and impressive portfolio owned by Pelosi and her husband Paul has long been a hot topic and a source of skepticism for many.

The tremendous successes realized by the Pelosis over the years have prompted intense discussion and analysis among professional and amateur investors alike on Twitter, Tiktok, Reddit, and YouTube, and have spurred the creation of countless humorous memes, as the Epoch Times noted last year.

Tipranks.com recently observed that some market watchers have taken to referring to Pelosi as “the stock market's biggest whale” and something akin to a securities “psychic,” also voicing their awed admiration of Paul Pelosi's impressive trading skills.

Questionable trades?

The entertainment factor aside, however, some of the Pelosis' market movements have attracted a much closer look from those concerned with the ethics of lawmakers potentially being able to capitalize on information they gather in the course of their jobs.

Last summer, Paul Pelosi – and by extension, his wife – was under fire for buying up millions of shares in a computer chip firm called Nvidia, doing so just as the Senate was about to vote on a subsidy package virtually certain to boost the company's fortunes significantly, as the Daily Caller reported at the time.

Based on information from then-Speaker Pelosi's financial disclosure reports, Paul Pelosi bought 20,000 shares of Nvidia, known as one of the world's foremost makers of semiconductors, and though such a transaction might not seem out of the ordinary for someone of his wealth and securities background, the proximity of the trade to the Senate's final vote on subsides raised eyebrows, given the insider status his wife enjoyed.

While the Nvidia trade was certainly not the only advantageous Pelosi stock transaction to draw attention, it did provide for unfavorable headlines for Pelosi over the summer and prompted renewed calls for action to prevent lawmakers from profiting from their role as public servants.

Critics speak out

Amid last summer's growing chorus of scorn over Paul Pelosi's Nvidia trade, Rep. Ralph Norman (R-SC) characterized the “optics” of the trade as “horrible” and added, “[o]bviously, Speaker Pelosi would be aware of the timing of this legislation over in the Senate.”

“On the heels of that vote, for anyone in her orbit to purchase seven figures worth of stock of a U.S.-based chip manufacturer just reeks of impropriety,” Norman concluded.

The congressman was not alone in his disdain for the stock move, with Craig Holman of liberal think tank Public Citizen also sounding the alarm.

“It certainly raises the specter that Paul Pelosi could have access to some insider legislative information. This is the reason why there is a stock trading app that exclusively monitors Paul's trading activity and tells its followers to do likewise," Holman opined.

Evolving views

Back in 2021 – before Paul Pelosi's Nvidia trades made news and despite bipartisan support for a ban on congressional stock trading, then-Speaker Pelosi took the position that lawmakers like herself have every right to make transactions as they see fit, as CNBC noted at the time.

“We're a free market economy,” Pelosi said defiantly, adding, “[legislators] should be able to participate in that.”

However, early last year – perhaps due to backlash over her own family's stock windfalls over the years – Pelosi changed course and said she was open to proposals prohibiting members of Congress from trading while holding office, saying, “I've said to the House Administration Committee, review all the bills that are coming in and see which ones – where the support is in our caucus. If members want to do that, I'm OK with that.”

Though the Democrat from California is certainly not the only federal legislator accused in recent years of using their position of power to generate significant profits through securities trading, the unusual degree to which she and her husband seem to have conquered the market makes it easy to see why Hawley calls his bill the PELOSI Act.