Ridiculed lawmakers laugh all the way to bank; calls grow for ban on stock trading

Former House Speaker Nancy Pelosi’s net worth is approaching $250 million in a surging stock market, and pressure is growing for the California Democrat and others in Congress to ban lawmakers from individual stock trades.

Quiver Quantitative, which tracks lawmakers’ stock trades, estimated that Mrs. Pelosi made $8.87 million in the stock market in the first half of May alone as the Dow Jones Industrial Average briefly topped 40,000 points for the first time.

In 2023, Mrs. Pelosi’s portfolio gained an astonishing 65% return. The average return on the S&P 500 index last year was about 23%. The largest hedge fund in the U.S., Bridgewater Associates, lost 7.6%.

The performance of some lawmakers’ stock portfolios has soared so high that “The Daily Show” guest host Jon Stewart recently treated it with his trademark mockery.

“How do they do it? The secret is an understanding of the intricate interconnectivity of global markets — I’m kidding. They have inside information,” Mr. Stewart said.

A spokesman for Mrs. Pelosi said she had no comment.

Critics say Mrs. Pelosi and others in Congress are benefiting from inside knowledge of legislation likely to affect stock prices, such as the passage in 2022 of the CHIPS Act, which provided billions of dollars in subsidies for semiconductor manufacturing in the U.S.

Mrs. Pelosi and her husband, Paul, sold their 25,000 shares of chipmaker Nvidia at a loss of $700,000 around the time Congress approved the CHIPS Act. They later purchased Nvidia call options in their largest trading purchase of the past three years, according to the trading news site Unusual Whales.

Although Mrs. Pelosi gets most of the attention on congressional stock trades, including from an X account called Nancy Pelosi Stock Tracker, she was only the ninth most successful lawmaker in stock trading in 2023. The biggest success was Rep. Brian Higgins, a New York Democrat whose portfolio rose 239%.

Another eye-popping trading move came from Rep. David Trone, Maryland Democrat, who submitted a financial disclosure last week reporting buys and sells of up to nearly $97 million last year in U.S. Treasury bills.

Mr. Trone, the founder of a chain of wine and spirits stores, filed the disclosure the day after he lost the Democratic Senate primary to Prince George’s County Executive Angela Alsobrooks. He had pumped more than $60 million of his fortune into the primary race.

His trades were subholdings of Mr. Trone’s joint J.P. Morgan account and listed up to $100,000 in shares of PepsiCo that his wife sold in November.

Treasury bills are not covered under reporting requirements of the STOCK Act of 2012, which requires lawmakers to report trades within 45 days. The Pepsi trade appears to be a violation. The penalty is a $200 fee to the government.

A spokeswoman for Mr. Trone said he complied with the law.

“Rep. Trone disclosed all information relating to these transactions that the rules require, and the [Ethics] Committee staff received notice and a copy of the [periodic transaction reporting] filing, as well as his full financial disclosure statement, in advance of their filing,” Trone Communications Director Sasha Galbreath said in a statement to The Washington Times.

Some lawmakers fared poorly in the stock market last year. Rep. Warren Davidson, Ohio Republican, lost 77% because of his stake in Workhorse, an electric vehicle startup whose stock price fell about 80%.

Lawmakers’ 10 top stock purchases in 2023, according to Unusual Whales, were ConocoPhillips (total $2.5 million), followed by Apple, Tyson Foods, Microsoft, Alphabet, PayPal, NGL Energy Partners, Bayer AG, CVS and Arista Networks.

When she was speaker, Mrs. Pelosi staunchly resisted legislation that would ban lawmakers from making individual stock trades.

“We’re a free market economy. [Members of Congress] should be able to participate in that,” she said.

The Nancy Pelosi Stock Tracker was created partly because of a philosophy of “if you can’t beat them, join them,” its founders said. The account shows which stocks certain lawmakers are trading so the public can join the action, insider knowledge or not.

The app provides four legislators to follow — Mrs. Pelosi; Rep. Dan Crenshaw, Texas Republican; Rep. Debbie Wasserman Schultz, Florida Democrat; and Rep. Daniel Goldman, New York Democrat — plus stocks from the top 10 lawmaker-traders based on their 2022 performance.

It is also designed to pressure Congress to ban lawmakers from individual stock trades.

One of the latest efforts to ban the trades was introduced this fall by Democratic Sens. Jon Ossoff of Georgia and Mark Kelly of Arizona. The Ban Congressional Stock Trading Act would require all lawmakers and their spouses and dependent children to place their stocks into a blind trust or divest the holding.

“Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Mr. Ossoff said. “Stock trading by members of Congress massively erodes public confidence in Congress with serious appearance of impropriety, which is why we should ban stock trading by members of Congress altogether.”

Congress has taken no action on the measure since September. Mr. Stewart said he thinks he knows why.

“You might be wondering to yourself: How does Congress get away with all this?” he told viewers. “Well, it may be because Congress is regulated by, let me check my notes, Congress.”