If you haven’t heard, there have been some rather sketchy stock trading deals going on involving no small number of Congressional members over the last year. And as usual, Democratic House Speaker Nancy Pelosi finds herself at the very heart of the situation, mainly because she was one such representative who is accused of violating a federal provision that requires members of Congress to report all market trades each year by a certain date.
Naturally, the issue has led to a rather massive conversation on how congressional members should and shouldn’t be allowed to trade and invest. The primary concern is that certain members, including Pelosi, may have been using their insider knowledge of how particular legislation could affect specific companies and their stock to make deals that have, quite literally, made them millions.
At first, Pelosi was quite opposed to having any further bans on trading passed into law. According to her, she didn’t have a problem with members’ so-called wise trading habits being used to enrich their bank accounts. After all, she was likely just such an individual – although she denies it tooth and nail.
In early December, Pelosi stated in response to accusations that she was misusing the system, “We’re a free-market economy,” and added, “They (her fellow congress members) should be able to participate in that.”
In late December, she only doubled down on this, making trades of her own in which she bought between $1.75 and $3.6 million in call options from companies like Google, Roblox, Disney, and Salesforce. This is, of course, on top of the already $120 million she has accumulated in personal wealth.
But, by the end of January, just one month later and when a new bill had been proposed, her mind was rather suddenly changed. In fact, as of last week, she even moved to sign those new rules, known as the Ban Conflicted Trading Act, into existence.
According to the Act, it “prohibits a Member of Congress or certain congressional officers or employees from (1) purchasing or selling specified investments, (2) entering into a transaction that creates a net short position in a security, or (3) serving as an officer or member of any board of any for-profit entity.”
The question is why. Why now, after months of digging in her heels that members of Congress should be able to trade however they see fit, is she suddenly agreeing that she should no longer be allowed to do just that?
According to the Speaker, the issue is a “confidence” one.
Right now, the people do not believe that Congress is making the right or integrity-filled decisions when it comes to their own finances. And while Pelosi says she still believes that these members should have the right to conduct their finances as they see fit, she also understands that the people need to have confidence in their leaders and representatives.
“We have to do this to deter something that we see as a problem, but it is a confidence issue. And if that’s what the members want to do, then that’s what we will do.”
But maybe that’s not really the whole truth. Instead, perhaps it’s because, while the act bans her from such illicit trading deals, it says nothing of her spouse not being able to.
And as her husband, Paul, has already proven, he’s no stranger to making suspicious stock trades to enrich his family’s holdings. You know, like a certain deal he made last year on big tech stock just as Congress was passing legislation that involved the tech industry. That deal alone netted him some $11 million.
Undoubtedly, a good many, both in Congress and out, don’t see the new ban as acceptable.
I mean, sure, Pelosi and her ilk can no longer make trades using their insider knowledge. But without any word on whether her spouse can or cannot, it makes the whole point pretty moot. There is nothing to stop those like Pelosi from informing their spouses on things that could affect stock or other investment opportunities and, then, having them do the trades for them.
Then again, with a red wave to soon come crashing into Washington, the bill and its lack of teeth might not be so toothless for long.