Legislation to prevent members of Congress from trading individual equities has been suggested by both left-wing rising star Rep. Alexandria Ocasio-Cortez (D-NY) and right-wing firebrand Rep. Matt Gaetz (R-FL).
In recent years, some high-profile MPs have been accused of profiting from their intimate knowledge of legislation in the works or economic crisis by buying and selling stocks. The Bipartisan Restoring Faith in Government Act would prohibit politicians and their immediate families from trading stocks or futures.
Rep. Brian Fitzpatrick (R-PA), a Republican and cosponsor of the bill, said in a statement, “The fact that members of the Progressive Caucus, the Freedom Caucus, and the Bipartisan Problem Solvers Caucus, who represent the whole political spectrum, can find common ground on important issues like this should send a strong message to America.” He argued that Congressmen and their families shouldn’t be able to trade stocks while in office because they have access to confidential information and “we need to move forward on things that bring us together.”
Members of Congress would still be able to invest in mutual funds and government securities that are widely owned, as well as keep assets in a blind trust or the federal pension system.
This year, Missouri Senator Josh Hawley, a Republican, proposed the PELOSI Act to prevent elected officials from owning securities and investments. Representatives Pramila Jayapal (D-WA), Matt Rosendale (R-MT), and Ken Buck (R-CO) introduced a similar bill two months ago.
Members of Congress would rather trade futures than strive to provide a prosperous future for all Americans. Gaetz summed up the situation well when he said, “We can’t let the Swamp put investing in stocks ahead of investing in our country.”
Ocasio-Cortez put it plainly when she remarked, “when members have access to confidential information, we shouldn’t use it to trade stocks.”
Despite the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank in recent weeks, several politicians have been actively trading bank stocks. Customers having balances in excess of the government guaranteed deposit limit withdrew their money all at once, leading to the collapse of these three medium-sized banks. New York Republican Nicole Malliotakis has bought as much as $15,000 worth of stock in New York Community Bancorp. A few days prior, she had met with government officials to discuss the company’s closure. In the meantime, the wife of Oregon Democrat Earl Blumenauer reportedly spent up to $15,000 on stock purchases at Silicon Valley Bank and stock sales at Bank of America and First Republic Bank during the previous quarter.
According to a research released by The New York Times last year, as many as 97 politicians or their close relatives purchased or sold assets tied to their work on parliamentary committees between 2019 and 2021. Paul Pelosi, a prominent financier, is Nancy Pelosi’s (D-CA) husband. Elaine Chao, the wife of Senate Minority Leader Mitch McConnell (R-KY), was involved in stock trading while he was in government.