House Speaker Nancy Pelosi on Wednesday said lawmakers should not be barred from trading stock, a practice that has come under scrutiny because it gives members of Congress the opportunity to profit off insider information gained through their official duties.
“We are a free market economy. They should be able to participate in that,” Pelosi, whose husband holds tens of millions of dollars worth of stocks and options, told reporters Wednesday.
Pelosi has long said she has no involvement in or prior knowledge of her husband’s trading decisions and does not own any stock herself.
The issue of congressional stock trading has taken on new urgency since the beginning of the pandemic, when suspiciously timed stock trades by lawmakers in both parties provoked outrage and led to multiple investigations.
To date, no one has been charged in connection with stock trading investigations undertaken by the Justice Department and the Securities Exchange Commission.
But the often lucrative trades nonetheless shine a spotlight on the inadequacies of a 2012 law called the Stock Act, which bars members from using inside information to make investment decisions and requires that all stock trades be reported to Congress within 45 days.
The 2012 law was passed with bipartisan support in the wake of a stock trading scandal. Yet in the nearly 10 years since it was enacted, no one has been prosecuted under it even as many members continue to conspicuously trade.
In some recent cases, lawmakers have failed to report their trades altogether, as required by the law.
“We have a responsibility to report,” Pelosi said. “If people aren’t reporting they should be.”
But when asked whether lawmakers and their spouses should be prohibited from trading stock while in Congress, Pelosi said, “No,” adding that “this is a free market.”
Legal experts say insider trading cases are exceptionally difficult to prosecute because they require definitively proving whether someone acted on nonpublic information. That hinges on demonstrating intent — a high burden.
That’s why many ethics experts have advocated for a ban on congressional stock trading to remove the temptation altogether.
Pelosi’s most recent financial disclosure shows her husband has millions of dollars worth of holdings. That includes stock in Amazon and Apple that are each worth between $5 million and $25 million. Other assets she reported include stock options held in Google’s parent company worth between $1 million and $5 million, Comcast stock worth between $1 million and $5 million and stock in Visa worth between $5 million and $25 million.