The Land of Insider Trading?
Lately, focusing on finance, it can feel like the “Land of the Free” is becoming the “Land of Insider Trading and Corruption.” While strong reactions occur when questioning the system, the goal here is to lay out data and ask questions about potential conflicts of interest within the US government.
Nancy Pelosi: A Case Study in Questionable Trades
Nancy and Paul Pelosi, a political power couple worth hundreds of millions, often appear in discussions about potential insider trading. Paul is an investor, and Nancy, a long-serving representative and former Speaker of the House, has access to significant non-public information.
In June 2022, the Pelosis disclosed purchasing over $3 million worth of Nvidia shares. This purchase occurred around June 17th, parallel to Nancy Pelosi championing the “Chips Act,” which allocated $50 billion in subsidies for US tech firms like Nvidia. This presents a clear conflict of interest. Interestingly, after scrutiny, they sold these shares at a loss, disclosing the trade on the same day it was made – a first for them – just days before the Chips Act became law.
Beyond Nvidia, the Pelosis held millions in Alliance Bernstein (an investment firm) and over a hundred million in TSMC (Taiwan Semiconductor Manufacturing). Concurrently, Nancy Pelosi travelled to Taiwan, meeting with TSMC executives while pushing legislation beneficial to the semiconductor industry. Holding significant stakes in tech, or firms investing heavily in tech, while personally advancing legislation that directs billions to those same companies, and meeting with their executives, raises serious ethical questions.
In March 2021, Nancy disclosed buying millions in Microsoft stock less than two weeks before Microsoft secured a $22 billion US military contract. Did she have prior knowledge? While unconfirmed, government actions often drive markets, making trades by high-level policymakers particularly sensitive.
In May and June 2021, Pelosi bought Apple, Amazon, and Alphabet stock around the same time six bipartisan antitrust bills targeting these companies were progressing. However, these bills lacked strength, and the stocks rose upon the news. Sources suggested Pelosi had previously weakened antitrust efforts. The Pelosis, treated as a joint financial unit, appeared to make well-timed trades while possessing access to the policy mechanisms influencing market prices.
The Pelosi couple consistently outperforms the market, often with trades benefiting directly from government policy shifts. While potentially “legal,” it begs the question of why such activities are permissible.
Corruption Isn’t Partisan: Marjorie Taylor Greene
Financial conflicts aren’t limited to one party. Marjorie Taylor Greene, a Republican Congresswoman, presents another example. Despite a congressional salary of $174,000, her net worth estimates vary wildly, with some recent figures around $20 million. She actively trades stocks while in office.
Notably, directly before then-President Trump announced a pause on disruptive tariffs that were impacting markets, Greene made numerous purchases across technology, retail, and finance sectors, right before a market reversal. This occurred even before Trump publicly suggested it was a “great time to buy.” Greene dismissed calls for an investigation as “absurd.”
Comparing Pelosi’s trades seemingly benefiting from legislative action she influenced, and Greene’s trades preceding market-moving policy changes announced by a president she politically supported, highlights that the issue transcends party lines.
Systemic Issues and the Failing STOCK Act
The problem extends beyond individuals. Just before President Trump announced the tariff pause, major stock indexes saw unusual levels of high-risk buying, suggesting insider knowledge was traded upon. Insider trading isn’t new. The 2012 STOCK Act (“Stop Trading on Congressional Knowledge”) aimed to curb it, passing the Senate 96-3.
However, according to the Campaign Legal Center, “The STOCK Act has failed… no member of Congress has ever been prosecuted under the STOCK Act, despite persistent credible allegations.” One of the three “No” votes was Republican Senator Richard Burr. In 2020, while chairing the Intelligence Committee and receiving daily COVID-19 briefings, Burr sold off significant portions of his stock portfolio before the market crashed. His defense was that he relied solely on public CNBC reports, asking the Ethics Committee for a review. Burr had previously called the STOCK Act’s restrictions “ludicrous” and “insane.”
More Bipartisan Examples
Other examples further illustrate the bipartisan nature of these questionable activities:
- Sen. Jim Inhofe (R): Sold stock in January 2020, days after a private Senate briefing on COVID-19.
- Sen. Diane Feinstein (D): Her husband sold millions in stock between late January and mid-February 2020. The stated defense was that it was her husband’s decision.
- Rep. Phil Roe (R): Sold cruise line shares and bought Zoom stock, followed by purchasing Moderna shares shortly before vaccine rollouts.
- Sen. Kelly Loeffler (R): Sold stock after pandemic briefings and purchased shares in remote work companies. She is married to the chairman of the New York Stock Exchange.
In all these cases, investigations and ethics inquiries were dismissed with no charges filed.
Pardons: Another Avenue for Concern?
The pattern of politicians seemingly benefiting financially continues, raising questions about whether the system truly holds the powerful accountable. The use of presidential pardons adds another layer of concern.
Donald Trump granted clemency to Trevor Milton, founder of Nikola, convicted of fraud exceeding half a billion dollars. Milton faked promotional material and committed securities and wire fraud. Victims haven’t received restitution. Notably, Milton reportedly donated nearly a million dollars to Trump’s re-election campaign *after* his conviction. He now potentially walks free with hundreds of millions in illicit gains.
This issue isn’t exclusive to one administration. Under President Biden, Rita Crundwell, a city comptroller who stole $53 million from taxpayers over 22 years, received clemency.
In a historically unprecedented move, Trump also pardoned the three co-founders of the crypto platform BitMex, who pled guilty to violating the Bank Secrecy Act, and granted clemency to the parent company, HDR Global Trading Limited. BitMex itself was fined $100 million for violating anti-money laundering laws. Pardoning the company potentially allows it to avoid this $100 million penalty. Why should a company found to have violated financial regulations receive clemency, preventing funds from benefiting the public treasury?
Conclusion: A System of Different Rules?
White-collar financial crime appears rampant within the US government, regardless of the party in power. Personal enrichment and financial conflicts seem pervasive, often excused or ignored. Accusations fly between parties, but the underlying problem persists: those with money and power, especially those who make the rules, seem to operate under a different set of standards.
This exploration aims to encourage critical thinking about the state of financial integrity within the government. The evidence suggests a systemic issue where conflicts of interest and potential corruption are widespread and inadequately addressed.
