Image courtesy of The New York Post
By Noah Slayter
Based on a newly-named bill introduced by Senator Joshua Hawley of Missouri, members of Congress would be barred from utilizing privileged information for investment purposes. The Preventing Elected Leaders from Owning Securities and Investments Act, or PELOSI Act, digs at former House Speaker Nancy Pelosi.
“We must immediately and permanently ban all members of Congress from trading stocks,” Hawley said.
Hawley also tweeted on January 24, “Members of Congress and their spouses shouldn’t be using their position to get rich on the stock market – today l’m introducing legislation to BAN stock trading & ownership by members of Congress. I call it the PELOSI Act.”
Hawley first introduced the bill in January of last year with the title Banning Insider Trading in Congress Act. The new version of the bill was brought up soon after reports that Nancy Pelosi’s husband traded stocks worth up to $1-5 million last year prior to a congressional earmarking $52 million for the industry. Pelosi also dumped 30,000 Google shares prior to an antitrust lawsuit from the Justice Department and eight other states, which amounted to an estimated $500,000-$1 Million.
On his congressional website, Hawley’s office wrote,
“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,’ Hawley said ‘As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again. While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hard working Americans pay the price. The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.’ ”
The legislation is written as “A bill to amend the Ethics in Government Act of 1978 to prohibit transactions involving certain financial instruments by Members of Congress.” The bill would force elected officials and their spouses to place their holdings in a blind trust or divest them, forfeiting “investment profits to the American people via the U.S. Treasury if they are found to be in violation of the Act.”
In other words, federal elected officials and their spouses would not be able to invest in stock while serving in office. They would have to sell or place their stocks into an account they cannot control during their term and give up their investments to the American Treasury if they violate the Act.
The bill has only been introduced and still has to run the gauntlet of a senatorial committee, passing both houses of Congress and getting signed by President Biden, so the bill has many hurdles to jump before becoming law.