CongressTrading Highlights Changes That Could Help, Pelosi's New Trade And Crypto Disclosures
The debate over whether members of the U.S. Congress should be able to buy and sell stocks is heating up again as it was revealed that Speaker of the House Nancy Pelosi (D-Ca.) and her husband, Paul Pelosi, purchased $10 million in stock/options of Microsoft Corporation (NASDAQ:MSFT).
Benzinga chatted with the founder of Congresstrading.com to hear more about buying and selling stocks by members of Congress.
The Pelosis' Trades: Microsoft was awarded a $22-billion deal from the Pentagon. Before the deal was unveiled, the Pelosis made a sizable bet on the future success of the company.
"This presents a crystal clear conflict — like many of the other trades she and her husband have engaged in," said the founder of Congresstrading.com, who asked to remain anonymous due to the sensitive nature of his site, adding that lawmakers should not be allowed to make bets on companies that have outstanding bids for government contracts.
Paul Pelosi is involved with venture capital so it makes it hard for him to not make investments, but this creates huge conflicts over potential trades he makes with his wife as a member of Congress.
“It gives almost all of their trades the appearance of impropriety," according to CongressTrading.
Should Congress Members Be Allowed To Trade? Over the years, there have been proposals to limit members of Congress from buying and selling stocks while in office. The founder of Congresstrading.com said there are several ways to approach this including:
- Lawmakers locking in their holdings before being sworn into office for the duration of their service
- Liquidate positions and only trade broad-market based ETFs while in office
- Eliminate the buying and selling of financial assets for members of Congress while in office
- Real-time disclosures of any transactions
Currently, members of Congress are allowed to buy, sell and hold stocks while in office. It is also hard for retail traders to find the transactions, which are not presented in real-time.
Congresstrading.com pulls the reports into a database and shares reports with users for a monthly subscription.
New SEC Chairman Gary Gensler could bring changes to rules on buying and selling stocks while in Congress, but the Congresstrading.com founder doesn’t expect big changes to happen.
“It’s incumbent upon Congress to regulate themselves," he said, "which is why we’ve seen inaction on this since the passage of the STOCK Act in 2012.”
Congress and Crypto: A newer topic in terms of Congress financial transactions could center around cryptocurrency trades. It was reported by Congresstrading.com that U.S. Rep Mark Green (R-Tenn.) bought Dogecoin twice in April.
The owner of Congresstrading.com told Benzinga that members of Congress should have to disclose cryptocurrency transactions to the public as well.
"It's very bold for a lawmaker to buy Dogecoin," he said, "especially given speculation the Treasury department may crackdown on money laundering through digital assets. The trades are disclosed in ranges so it’s difficult to narrow down just how much he bought."
If Green decides to sell his Dogecoin, he will have to disclose the transaction within 30 days of the sale.
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