House Speaker Nancy Pelosi opposes banning members of Congress from buying stocks

House Speaker Nancy Pelosi mocked Wednesday at the idea of ​​barring congressional lawmakers and their spouses from owning stock in individual companies, despite the potential for a conflict of interest between the mandate. legislative and their personal finances.

“No,” Pelosi, D-Calif., told reporters at a news conference, where she was asked if she would support such a ban.

“We are a free market economy,” she said. “They should be able to participate in that.”

Pelosi’s rejection of the idea of ​​a stock-buying ban came in response to a question about this week’s Business Insider investigative report into lawmakers’ stock ownership and following controversies over stock-buying. votes of some senators since the beginning of the Covid-19 pandemic,

Business Insider’s series found that 49 members of the National Assembly and 182 high-ranking congressional staff violated The so-called STOCKS Act, which requires themselves and their family members to disclose information to the public within 45 days of the date of sale or purchase of individual stocks, bonds, and commodity futures.

The Congressional Knowledge Stopping Trade Act, which became law in 2012, is supposed to prevent legislators and employees from entering trades based on information they gather from work. their own, as well as conflicts of interest.

But violations of the STOCK Act, if sanctioned, are typically only a $200 fine.

“We have a responsibility to report” stock transactions, Pelosi said Wednesday.

The speaker said she wasn’t familiar with the findings of the Business Insider series.

“But if people don’t report [stock trades], they should be,” added Pelosi.

Early Monday, Securities and Exchange Commission Chairman Gary Gensler has called for tougher regulations restricting stock trading by company executives and other top executives.

In October, the Federal Reserve announced a wide-ranging ban on officials of that central bank from owning individual stocks and bonds.

That ban followed the resignations of two Federal Reserve regional presidents, Robert Kaplan of Dallas and Eric Rosengren of Boston, after the reveal that they traded individual stocks in 2020. Their trades come as the coronavirus shakes markets, and while the Fed itself is engaged in massive asset purchases aimed at keeping stable market.

Some good government groups and some legislators have called for a ban on stock ownership or mandating members of Congress blindly trust their finances while they are in office.

Allowing legislators to continue to own index funds, which track sectors of the financial markets, is seen as a way of allowing them to reap investment returns while limiting their ability to benefit from information they obtain about individual companies or are deemed to have done so.

In 2019, then-Rep. Chris Collins, RN.Y., pleaded guilty to federal charges related to withholding his son from non-public information he obtained about a drug company’s failed drug trial. , shortly before that news release sent the company’s stock into a tailspin.

Collins had for years earlier touted the prospect of the company, Innate Therapeutics, and served on its board of directors even as he served in Congress.

Collins was also Innate’s largest shareholder in early 2016. owns more than 17% shares of the company, equivalent to nearly 34 million shares. His children Cameron and Caitlin were at one time the third and fourth largest shareholders, with each owning 2.65% of the company’s shares at the time, or 5.2 million shares each. .

Collins, who served a 26-month prison sentence, was pardoned by President Donald Trump in December 2020, shortly before Trump left office. Collins was the first member of Congress to endorse Trump running for the White House for the first time in 2016.

Last year, Federal prosecutors have been investigating stock sales made before a market plunge triggered by Covid and in connection with Senator Richard Burr, RN.C., Senator Jim Inhofe, R-Okla., Then-Senator. Kelly Loeffler, R-Ga. And Senator Dianne Feinstein, D-Calif.

Those probes ended without criminal charges being brought.

But the Securities and Exchange Commission is conducting a civil investigation about whether Burr and his brother-in-law Gerald Fauth and Fauth’s wife engaged in insider trading of non-public information Burr obtained about Covid as part of his job. Fauth is chair of the National Conciliation Commission, an agency that supports labor-management relations in the U.S. railroad and airline industries.

In August, Republican Senator Rand Paul of Kentucky for the first time about in a report it was revealed that his wife Kelly bought shares of the drug company Gilead Science at the beginning of 2020, one day later First US clinical trial started Gilead’s drug as a treatment for Covid-19.

Paul and his wife have not previously purchased or held shares in a personal company in the past decade.

Paul’s disclosure comes more than 16 months after the legal deadline for reporting under the STOCK Act had passed.

In July, Senator Tommy Tuberville, R-Ala., disclosed stock and stock options deals totaling between $894,000 and $3.5 million between January and May.

Like Paul, Tuberville released his information after the expiration of the time limit set forth by the STOCK Act.