Tag Archives: Congressional insider trading

The Name For This Proposed Law Was Pure Brilliance

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Insider trading by Congress has been a problem for a long time. It is one of the ways that a person can enter Congress with a net worth of about $800,000 and become a multi-millionaire in a few years. There have been a few efforts to end insider trading in Congress, but oddly enough those efforts have been voted down.

On Tuesday, Townhall posted an article about the latest effort to end Congressional insider trading.

The article reports:

Sen. Josh Hawley (R-MO) is again turning up the heat on Washington corruption by reintroducing the “PELOSI Act,” a bold effort to ban members of Congress and their spouses from trading individual stocks. Named after former House Speaker Nancy Pelosi (D-CA), whose financial dealings have long raised questions, the bill directly targets the insider privilege, allowing lawmakers to profit off the markets while shaping policy.

This week, Hawley reintroduced the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, which would ban members of Congress from trading or holding individual stocks. The senator argued that lawmakers should prioritize serving their constituents, not profiting from stock trading using insider information. He said that the act would help restore public trust in the government.

Hawley first introduced the act in 2023, but it stalled under President Joe Biden’s administration. With President Donald Trump back in office, the legislation is gaining traction. Trump has pledged to “absolutely” sign the bill if it reaches his desk, stating he “watched Nancy Pelosi get rich through insider information.”

The PELOSI Act would prohibit members of Congress and their spouses from buying, selling, or holding individual stocks while in office. However, they would still be allowed to invest in diversified mutual funds, ETFs, or U.S. Treasury bonds. Lawmakers would have 180 days to comply with the law, and those who fail to do so would be required to forfeit any stock profits to the U.S. Treasury and could face fines from congressional ethics committees.

The Republicans hold majorities in both the House and the Senate. There is no excuse for not getting this done.

Any Bets On Where This Will Go ?

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Capital Building

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On November 15, I posted an article (rightwinggranny.com) thanking Senator Scott Brown for his introductions of the Stop Trading on Congressional Knowledge, or STOCK Act, (S.1871) which would clarify insider trading regulations that do not clearly identify whether the use of inside government information constitutes insider trading. On November 15, the bill was read and referred to the Committee on Homeland Security and Governmental Affairs. Hearings were held.

USA Today reported on December 6 that the bill could be voted on by the Senate Homeland Security and Governmental Affairs Committee and the House Financial Services Committee on December 14. If the committees vote for the measure, the full Congress could vote on it early next year.

The article reports that there is some opposition to the bill:

New York Democratic Rep. Carolyn McCarthy of Long Island said the STOCK Act could leave lawmakers vulnerable to “a witch hunt.”

“It’s flawed, and everybody knows it,” said Rep. Emanuel Cleaver, D-Mo. “I hope there’s another way of doing this.”

Cleaver suggested alternative approaches, such as letting lawmakers put their investments into blind trusts handled by professional investment managers, or having the SEC issue guidance letters advising individual lawmakers on what’s legal.

Two Republican freshmen, Reps. Sean Duffy of Wisconsin and Francisco Canseco of Texas, have proposed letting lawmakers choose between a blind trust and reporting financial transactions more frequently.

Duffy’s legislation would require reporting them within three business days. Canseco’s proposal, which would change the internal rules of the House, would require reporting them within five business days after the end of each month.

I think one of the problems here is that for a long time we have expected Congress to police itself, and obviously it has not done a very good job. I am not sure that the current bill is the answer to the insider trading problem, but I can guarantee that doing nothing is not the answer. Congress needs to be under the same laws as the rest of us. It seems as if this bill would move that idea closer to reality.

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