House Speaker Nancy Pelosi said Thursday that she is open to banning lawmakers from owning and trading individual stocks if enough Democrats want that, but said she was personally “always in favor of trusting our members” not to do illegal things.
There has been growing momentum on both sides of the aisle for a ban on individual stock trading among members of Congress, but Democratic leadership has been reluctant to push the issue. In December, Pelosi said outright that lawmakers should be allowed to trade stocks.
“We are a free-market economy,” the California Democrat said at the time. “They should be able to participate in that.”
Pelosi seemed more open to a ban on Thursday, however, saying, “If members want to do that, I’m OK with that.”
But she’s certainly not pressed to act on the issue.
“I do come down always in favor of trusting our members,” she said. “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.”
Pelosi added that she would support increasing the penalties for insider trading, which is federally banned, and said justices on the Supreme Court should be subject to the same penalties for insider trading as members of Congress currently are.
A growing list of Democratic lawmakers are backing a proposal from Sens. Jon Ossoff (D-Ga.) and Mark Kelly (D-Ariz.) that would prohibit lawmakers, their spouses and their dependent children from trading individual stocks. The topic has also become an issue on the campaign trail, with several candidates, including Pennsylvania Senate candidates John Fetterman and Rep. Connor Lamb, coming out in support of a ban.
Some Republicans have also caught on. The party’s leader in the House, Rep. Kevin McCarthy (R-Calif.), said he would direct a Republican-led chamber to implement the ban if voted back into the majority. Ohio Republican Senate candidate J.D. Vance said he supports the idea. Even Donald Trump chimed in on the issue, saying Pelosi specifically should not be allowed to trade stocks.
Such a law would, of course, come at great financial cost to the majority of lawmakers, including Pelosi. Her venture capitalist husband netted a $5 million gain last summer on Alphabet stock, according to financial disclosures.
The current interest in banning members from trading stocks began after it was reported that multiple senators, or their spouses, sold off large amounts of stocks in February 2020 — shortly before the public fully learned what the arrival of COVID-19 meant for the economy. The Department of Justice looked into trades by Sens. Richard Burr (R-N.C.), Kelly Loeffler (R-Ga.), Dianne Feinstein (D-Calif.) and Jim Inhofe (R-Okla.), but ultimately dismissed them. The Securities and Exchange Commission is still investigating Burr.
These investigations, though mostly dropped, came on the heels of the successful prosecution of Rep. Chris Collins (R-N.Y.) for engaging in insider trading of stock in a pharmaceutical company whose board he sat on. Trump pardoned Collins, the first member of Congress to endorse his 2016 presidential bid.
An investigation by Insider further piqued interest in a stock trade ban, as it found that 42 lawmakers and 182 high-level staff failed to properly report stock trades as required under the 2012 Stock Act.