Members of Congress were active in the stock market last year, disclosing 11,000 transactions tallying up to over $1 billion.
Now — in the attitude of, if you can’t beat them, join them — websites and social media accounts are watching the financial moves of these elected officials and helping Americans trade like members of Congress.
A report, produced by Unusual Whales, a platform that tracks congressional trading, found evidence of conflicts of interest in many cases of congressional trending. This trend is fairly widespread in both the House and the Senate.
Sen. Tommy Tuberville, one of the most active traders in Congress, is on the Senate Committee for Agriculture, Nutrition and Forestry. He traded $250,000 in stocks for wheat, corn, soy and cattle in August, last year, the report stated. He also sits on the Armed Services Committee and has purchased shares of a company used to provide humanitarian aid in Ukraine.
In the lower chamber, Rep. Nancy Pelosi and her husband, Paul, a venture capitalist, bought $2 million worth of Nvidia stock, at the end of 2023, marking her largest stock purchase in three years. They have already made over $1 million in profit, according to Nasdaq. The AI software company produces semiconductor chips and saw 239% stock growth in 2023.
Pelosi’s moves on the stock market are closely monitored on the internet, with investors, big and small, trying to replicate her success. Scalping data from financial disclosures, many websites, like Capitol Trades and Quiver Quant, and social media accounts, like Congress Stock Watcher, Unusual Whales, Insider Tracker and many others, have popped up to provide inside information on the stocks she and other lawmakers buy. There are, of course, always risks whenever one buys and sells stocks.
One Reddit post from four months ago says, “Want to beat the stock market? Just copy Congress! Politicians’ trades perform twice as well as market average.” These tools have put the financial moves made by congressional leaders under a microscope.
But when elected officials have financial interests tied to their legislative work, it raises ethical concerns: Are they acting in the public’s best interest or for their personal gain?
“It raises a lot of questions. Why did they introduce a bill? Why did they support it?” said Danielle Caputo, the legal counsel on ethics at the Campaign Legal Center, an advocate for stricter accountability standards on stock trading in Congress. A 2022 report from Caputo’s watchdog organization found that over half the members of Congress owned stock.
In 2021, back when Pelosi was speaker of the House, she defended a lawmaker’s right to trade stocks, saying, “This is a free market.”
“We have a responsibility to report,” Pelosi said, according to The Associated Press. “If people aren’t reporting, they should be.”
Right now, a 2012 law, the Stock Act, is the only legislation guiding stock purchases among lawmakers and staffers.
But “depending on what level of seniority you are as a staff member, (and) what committee you’re on, you can trade stuff based on committees,” said Caputo.
She doesn’t think the law goes far enough. “Essentially, the act is a transparency bill,” said Caputo, referring to the provision that requires members to report their trades within 45 days of the transaction and a penalty of $200 for breaking the rule. “Let’s say you make a million dollars off of that trade, a $200 fine isn’t going to dissuade you from making that choice in any way.”
A 2021 Business Insider investigation showed that 78 lawmakers failed to report their trades, as mandated by law.
Plus, chasing insider trading allegations can be a complex process, as Robert Long, a former senior attorney at the U.S. Securities and Exchange Commission, told Vox in March 2020.
“The line between illegal trading and innocuous trading is not bright — it’s often a murky line,” said Long. “Subtle facts and legal issues can make the difference between having an insider trading investigation closed and being prosecuted and going to jail.”
Pelosi’s initial move on Nvidia prompted Sen. Josh Hawley of Missouri to introduce the Preventing Elected Leaders from Owning Securities and Investments Act, also known as the PELOSI Act, in January 2023.
“While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hard-working Americans pay the price,” said Hawley, a Republican. “The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.”
On Thursday, Rep. Ro Khanna, D-Calif., in a post on X laid out his five-point anti-corruption plan to tackle “the role of Big Money in the halls of Congress.” This plan includes a ban on stock trading. Unusual Whales in its 2023 report said Khanna disclosed his family initiatied more than 1,500 transactions in industries like healthcare, financial services, technology, defense and real estate.
He was among the top stock sellers last year and is up for reelection this year. Khanna sits on the House Armed Services and House Oversight and Accountability committees.
Rep. Matt Gaetz, R-Fla., and Rep. Alexandria Ocasio-Cortez, D-N.Y., two elected officials from different ends of the political spectrum, joined forces to carve out the Bipartisan Restoring Faith in Government Act, which would prevent lawmakers and their families from investing in securities, like stocks, bonds or commodities, including oil or gold.
Shortly after becoming the speaker, Rep. Mike Johnson, R-La., received a letter from Virginia Democrat Rep. Abigail Spanberger in October, urging him to ban congressional members from stock trading, but, as Roll Call reported, she never received a response. It’s worth noting, Johnson has not reported any trade activity in the last three years.
According to a survey by the Program for Public Consultation, 86% of House and Senate members say they favor prohibiting stock-trading in individual companies by congressional lawmakers as well as the president, vice president, and Supreme Court justices.
The support for such a ban is strong among American voters, too, with roughly 68% in favor, according to a 2022 national poll from Morning Consult/ Politico.
Watchdogs say any proposed legislation should also ban investing in private equities and digital currency like Bitcoin, to ensure funds aren’t going to venues offering less transparency. Instead of forcing members of Congress to disinvest, they can put them into a qualified blind trust.
“That would still allow them to make money off of investments but they would just not know what their investments are,” said Caputo.
When asked if such prohibitions discourage those from business backgrounds from running for office, Caputo simply stated, “public office isn’t an entitlement, it’s a privilege.”
Other countries have laws limiting lawmakers from stock trading. Canada’s Conflict of Interest Act draws a line between private interests and the public duties of appointed officials. In the U.K., the parliamentary code of conduct prevents members from advocating for a particular company for personal gain. Australia doesn’t ban stock trading, but its members of parliament are legally bound to disclose any trades within 28 days.
“We’re hoping we’ll still be able to effectuate a change,” said Caputo. “I don’t think it’s a lost hope … I do think that we’re very close to having some sort of restriction or ban on members of Congress trading stock.”
