Congress members' stock trades draw more scrutiny

A day after a news analysis detailing extensive stock trading by members of the US Congress, some of which involved companies their committees investigate, House of Representatives Speaker Nancy Pelosi said on Wednesday that proposed legislation to tighten trading rules should materialize later this month.

On Tuesday, The New York Times published an analysis that found that at least 97 current members of Congress "bought or sold stock, bonds or other financial assets that intersected with their congressional work or reported similar transactions by their spouse or a dependent child".

The newspaper described one trade by the wife of Representative Alan Lowenthal, a California Democrat, as "especially striking". She had sold shares of aircraft maker Boeing on March 5, 2020－a day before a House committee on which her husband sits released damaging findings on the company's handling of its 737 MAX jet, which was involved in two fatal crashes.

Representative Bob Gibbs, an Ohio Republican on the House Oversight Committee, reported buying shares of the pharmaceutical company AbbVie in 2020 and 2021, while the committee was investigating AbbVie and five rivals over high drug prices, the analysis found.

Representative Cindy Axne, an Iowa Democrat, and her husband, reported four purchases of Wells Fargo stock while the House Financial Services Committee, on which she sat, was investigating the bank over fake accounts.

Family members of Representative Michael McCaul, a Texas Republican, bought and sold shares of IBM and sold Accenture, both major Department of Homeland Security contractors, while he was on the Homeland Security Committee.

Between 2019 and 2021, more than 3,700 trades reported by lawmakers from both parties "posed potential conflicts between their public responsibilities and private finances", the Times found.

The Stop Trading on Congressional Knowledge (STOCK) Act of 2012, signed into law by then-president Barack Obama, prohibits the use of nonpublic information for private profit, including insider trading by members of Congress and other government employees.

Pelosi, a California Democrat, characterized the current unfinished legislation as "very strong".

Months of negotiations

A House vote on the legislation would follow months of committees trying to craft a bill. Lawmakers will go on a long break next month in the run-up to the Nov 8 midterm elections.

"The American people don't want us day trading for profit and engaging in active trading of the very equities that are connected to the policies that we are deciding on and voting on every day," Representative Chip Roy, a Texas Republican, told the Times. Roy is cosponsoring a House bill that would require members to put individual stocks, bonds and many other financial assets in a blind trust.

In July, some stock trades executed by Pelosi's husband, Paul Pelosi, drew scrutiny when he sold shares of chipmaker Nvidia days before the House was expected to consider legislation providing subsidies and tax credits worth over $70 billion to boost the US semiconductor industry. The CHIPS Act is now law.

He sold 25,000 shares of Nvidia for about $4.1 million, sustaining a loss of $341,365.

Agencies contributed to this story.