Members of Congress are expected to commit their lives towards serving the public, considering they are on taxpayer’s dollar. Hidden from the public, though, these bureaucrats usually end up making themselves rich off stocks.
There was previously no law preventing those in Congress from trading stocks, even though some argued these representatives and senators were at an advantage compared to the general public. As a result, President Barack Obama signed a bill into law in 2012 preventing use of non-public information for private profit, specifically by members of Congress.
These politicians decide where the United States government will spend its money. Knowing this information may influence members to make certain trades.
For example it was reported that Speaker of the House Nancy Pelosi’s husband, Paul, purchased $1.95 million of Microsoft stock on March 19, 2021 through call options. After the purchase stock prices increased 11 percent, thanks to an announcement that Microsoft would be paid $22 billion by the United States government.
Some questioned the legality of Paul Pelosi’s actions, as the law passed in 2012 made it illegal for family members of those in Congress to profit from inside information. What provoked Paul Pelosi to make the trade is unknown, while his critics point to secrets passed from his wife.
Fox Business also stated that representatives from Pelosi’s office declined the offer to speak on the issue.
Per a 2019 financial statement, Nancy Pelosi had a net worth over $114 million. Despite her massive net worth, it has been reported by multiple sources that she only receives $223,500 in salary from her role as Speaker of the House. Once again, this leads many people to speculate as to where Pelosi’s immense sum of wealth comes from.
Junior Janus Golczewski did his fair share of speculation as well. “Her salary on its own would not explain her net worth, she must be trading stocks based on what she hears at work,” he said.
The insider trading buzz on Capitol Hill is not just for Speaker Pelosi. In May of 2020, Senators Dianne Fienstein (D-CA), Kelly Loeffler (R-GA), Jim Inhofe (R-OK) and Richard Burr (R-NC) were investigated by the Department of Justice for insider trading.
What prompted the investigation was the mass sale of stocks undergone by these senators, coincidentally right before the government suspended international travel and began to shut down the economy.
In fact, Senator Burr had been receiving briefings about the spread of COVID-19 for weeks upon his sale of stocks in February of 2020, according to Vox. Before he had completed his final sale, NPR reports, at a luncheon Burr was heard saying, “It is more aggressive in its transmission than anything we have seen in recent history.”
While eventually all other investigations about the senators were dropped a few weeks later, further investigations continued about the trading history of Burr.
Junior Vinay Joshi, co-president of Pleasant Valley’s Economics Club explained his thoughts. “A tale as old as time is politicians taking advantage of their role. If what is reported about Senator Burr is true, he had private information and saved himself from losing money, while also leaving his constituents to the wolves weeks later with the March crash,” he said.
Just a few weeks after Burr got out of the market, the market hit record low in all sectors. Citizens’ retirement accounts and investment portfolios plummeted.
Joshi was outraged with what occurred. “If further subsections to the law about insider trading in Congress aren’t put in place, scams like this will continue,” he stated.
Although Senator Burr received zero federal charges in regards to these sales, it can be said he lost the trust of many Americans, Joshi included. Burr and Pelosi are not alone. Citizens have access to reports from the Securities Exchange Commission about trades made by bureaucrats. Upon further investigation, one may be shocked with how many coincidental, high profit, trades occur on a weekly basis.
