A New York Times report stated that close to 100 hundred members of Congress bought or sold financial assets that resulted from information they were privy to as lawmakers.
The US Congress has 435 house members, and at least 97 house members bought or sold bonds, stocks, or other financial assets that directly conflicted with their congressional positions.
Even though no law prevents US lawmakers from making stock trades, insider trading is illegal for all US citizens. Insider trading happens when people with access to confidential, non-public information about a particular company take advantage of that information and buy or sell the company’s stocks. People who use this privileged access to information are in breach of their official duties and can be prosecuted under federal law.
The offenses are split evenly into partisan lines, with Republicans participating as much as Democrats.
The details of the insider trading in Congress has triggered legislative proposals calling for the banning of lawmakers from trading entirely.
Some House Representatives have been caught in the crossfire, like Representative Angie Craig, D-Minn., who proposed legislation on banning trades. She was apparently surprised to find out that she was included in the list of insider traders because her college-age son bought and sold stock without her knowledge.
According to Representative Craig, who had inside information as a member of the House Transportation and Infrastructure Committee member, she didn’t know her son was trading stocks in the transportation companies Uber and Lyft. She claims she only found out about it when she filed her transaction paperwork.
In a statement to the New York Times, Craig stated that as a member of Congress, she is working on a law prohibiting family members of lawmakers from trading in stocks and other financial equities.
Since 2012, lawmakers have been bound by the Stock Act, which prohibits members of Congress from using non-public information obtained from their official positions for personal benefits. The Stock Act requires the lawmakers to report any stock transactions over $1000 made by themselves or members of their families.
The most notorious violators of the conflict-of-interest trade rules are Delaware Senator Tom Carper, who had 39 potential conflicts of interest trades from the 138 companies he traded, California Democrat Representative Rho Khanna, with the highest reported trades in 897 companies and 149 potential conflicts of interest trades, and New Jersey Democrat Representative Josh Gottheimer, who traded stocks in 326 companies and had 43 potential conflicts of interest.
Nancy Pelosi, the House Speaker, and her husband Paul have recently been criticized for their frequent trades amounting to millions of dollars. About four months ago, Forbes revealed that Paul Pelosi sold $5 million shares in NVIDIA, one of the largest semiconductor companies, days before a congressional vote handed $52 billion to semiconductor manufacturers at a loss of nearly $300,000. However, it’s still unclear whether the family sold the entire share interest they own.
In the New York Times investigation, many of the lawmakers denied culpability when they were contacted. Some claimed they didn’t know what their families were doing, and some claimed that brokers were performing the trades without their knowledge.
In any case, the abuse is rampant and goes all the way up to the top.