Something has changed in House Speaker Nancy Pelosi’s mind regarding tougher restrictions on stock trading for members of Congress. The heat must have been turned up a bit for the outspoken Democratic Speaker of the House.
At the end of last year, Speaker Pelosi refused to address questions regarding why lawmakers should be allowed to trade stocks in individual companies when they usually have such significant restricted knowledge of public markets. Pelosi’s husband, Paul, commonly trades large amounts of assets in the stock market.
When Pelosi was asked this question last year, she quickly quipped in response that we have a free market and people and we are a free economy. She simply said Congress ought to be able to participate in that.
But now, during a recent press conference, the speaker said that she has great confidence in the integrity of her colleagues but she is open to new regulations.
Pelosi said, “I do come down always in favor of trusting our members. If the impression that is given by some that somebody is doing insider trading, that’s a Justice Department issue … and that has no place in any of this. But to give a blanket attitude of ‘we can’t do this and we can’t do that,’ because we can’t be trusted, I just don’t buy into that. But if members want to do that, I’m okay with that.”
President Joe Biden’s administration addressed this issue recently. White House Press Secretary Jen Psaki said that the president would allow a member of Congress to determine their own rules for individual stock trading. She said that Biden did not trade individual stocks when he was a senator. And she said that Biden also believes that everyone should be held to the highest standards. But he favors allowing Congress to determine their own rules governing this issue.
Pelosi is obviously responded to some proposed legislation that would tighten insider trading regulations for members of Congress. This legislation is coming from Sen. Jon Ossoff (D-GA), Sen. Mark Kelly (D-AZ), and Sen. Josh Hawley (R-MO).
Senator Hawley wrote in a statement about the proposed legislation, “Year after year, politicians somehow manage to outperform the market, buying and selling millions in stocks of companies they’re supposed to be regulating. Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other at the expense of the country.”
Senator Ossoff was working on a bill that would ban dependent children from investing. There were negotiations taking place between Ossoff and Hawley’s offices, but they could not come to an agreement. Hawley’s bill does not impact dependent children, but it would charge the Government Accountability Office with providing oversight. Ossoff’s bill leaves that oversight to the congressional ethics committees.
One of the things that may have pushed this new discussion is the news that Senator Richard Burr (R-N.C.) may have broken federal insider trading laws when he liquidated the majority of stock investments in February of 2020. This move came shortly after he had received classified briefings regarding COVID-19.
But House Majority Leader Steny Hoyer (D-Md.) said that he was against banning members from owning or trading stocks. He believes that congressional lawmakers should be given the same financial privileges that other citizens have.
Pelosi is open to tougher regulations, but she also suggested that the Supreme Court be held to the same standards regarding stock trading. She said that she doesn’t believe the High Court should be let off the hook.
It looks like this dialogue is being driven by what will be under the spotlight in the coming mid-term elections.