Should politicians be allowed to trade stocks?

Members of Congress, members of the Senate and the House have access to all kinds of private and confidential information, including classified information. You would think it would be obvious that given that members of Congress shouldn't be playing the stock market. there was a string of congressional stock sales right before that that covered market crash and how can you have folks who are regulating industries, trading stocks in the same industry? I mean, it doesn't make sense you've never sp

ent an afternoon losing money on Boeing stock, I got to tell you, it's quite a way to kill a few hours. Yeah, think eventually it will get to the point where you can't just turn a blind eye to it anymore. I don't think the members should be able to buy or sell stocks because I think it's an issue of trust. Congress will not act on this themselves. They never will. this is a free market and people and we are free market economy, they should be able to participate in that. The politicians that wor

k in our nation's great capital have access to information that the rest of us don't. And this access makes sense. Our lawmakers in Congress need to know as much as possible about the stuff that's going to impact our lives, but more importantly, our financial markets. when those same lawmakers are trading stocks like a 25 year old Morgan Stanley analyst bombed off a monkeys fist of Zinn's. That's when the swamps starts to smell a little swampy. Over the past decade, more and more people have sta

rted raising questions about members of Congress making stock trades that seem a little too well timed, leading to a rare bipartisan push to ban them from trading altogether. Yet, despite multiple propositions reaching the House floor, little has been done to get congressional fingers out of our God fearing American markets. So why in the heck are they still allowed to do this? on January 24th of this year. Senator, member of the Armed Services Committee and former Auburn coach Tommy Tuberville

sold up to $50,000 in Intel stock options months before news broke that the Department of Defense was canceling a lucrative contract with Intel. 2020 to Nancy Pelosi's husband. Paul sold 30,000 shares of Google stock just weeks before the Justice Department filed an antitrust lawsuit against the company. 2019, Representative John Rose sold between $100,000 and $250,000 worth of Wells Fargo stock. Just before the House Committee on Financial Services that he sits on issued a report that criticize

d the company and tanked the bank's stock price. between 2019 and 2021, a New York Times analysis found that 13 lawmakers or their immediate family members bought or sold shares of companies that were under investigation by committees. They actively sat on now it doesn't take a hardened reporter like me to smell something potentially fishy here. So I drank some coffee black and hopped on a Greyhound to head over to our nation's capital and get some answers. like I'm a serious legislator. Sorry,

you can't take that away from me. I didn't. I'm sorry. I didn't mean to. It's okay. I probably more followers than you anyway. Are Do you believe that members of Congress should be allowed to trade stocks? Why or why not? No. And the reason is really simple. we're at a point in time where Congress has an all time low approval rating. people question whether they can trust members of Congress. I think people should be able to trust their members of Congress. And, you know, when you see headline a

fter headline of members of Congress doing well in the stock market, when you know, our constituents are troubled by, costs of groceries there's just a disconnect. And so I don't think the members should be able to buy or sell stocks because I think it's an issue of trust. But most importantly, I think it's a perception of impropriety that we could avoid. Compelling. Abby. curiously, it seemed like the issue was uniting politicians from all across the ideological rainbow from Democrats like Repr

esentative Ro Khanna of California's 12th District someone shouldn't be able to go and rail against the Boeing and then be trading on their computer, Boeing. Representative Perry. Good to see you, Jordan. How you doing today? Well, it's an interesting day in Washington, D.C. March Madness just doesn't occur on the basketball court. It occurs in Washington, D.C. right now. It's occurring at the border, southern border. It's been occurring every day at the border. But people are really seeing it t

oday based on the rush of people coming across, running our service members over down in El Paso. when you're making the votes on things that you might actually be earning money on and earning more money based on the vote or based on passage, that's a really uncomfortable nexus. And I think most people probably would say we don't want that happening. We always call in service. You wanted to serve. And if you if you want to serve, then then service is about sacrifice. should be willing to just sa

y, hey, I'm going to put my personal well-being that I'm managing every day aside just in this fashion, not aside completely, but aside in this fashion, so that you never question whether my votes were enriching me or for the right thing. Do you believe that members of Congress should be allowed to trade individual stocks? No. And I think your viewers are probably scratching their heads and asking themselves, wait, that's allowed at all. How dare you speculate on what my viewers are thinking? Ge

orgia Senator Jon Ossoff. Anyway, at this point, you're probably scratching your head and asking yourself, wait, how is this allowed at all? Members of Congress, members of the Senate and the House have access to all kinds of private and confidential information, including classified information. You would think it would be obvious that given that members of Congress shouldn't be playing the stock market. Instead, we see widespread stock trading by members of Congress, which is why I've introduc

ed a bill to ban it. in 2011. Rival News YouTube Channel 60 Minutes aired a piece about oddly timed stock trades made by Congress people in the months leading up to the 2008 financial crisis. This report among others prompted former President and mid playlist curator Barack Obama to sign the STOCK Act in 2012, members and employees of Congress from using nonpublic information for personal benefit like stock trading requiring them to report their stock trades of over $1,000 within 45 days. So the

STOCK Act is an awesome piece of legislation that I mean, before the STOCK act like insider trading, literally insider trading was basically legal for members of Congress. what a time. What a time that must have been. For what it's worth, throughout most of the 1990, stock trading senators outperformed the markets by 12 percentage points per year, while U.S. households underperformed by one percentage Between 2004 and 2010. One analysis of 62,000 trades by members of Congress show that they out

performed the market by 20%. in roughly the last year, an ETF tracking the trades of Democrats in Congress outperformed the S&P 500 by 6%, Now, there are tons of factors at play here. Some of these politicians were already wealthy, and it's a lot easier for people who are already wealthy to outperform the market because they have access to all kinds of resources that normals don't. Which is still true today. while congresspeople outperforming the market isn't proof of insider trading, it does un

derscore how wild it is that before and after the STOCK Act, trading with the potential conflict of interest has been allowed. Today, we just know about it. But now that we have that transparency in place, we also can see, there's still things that seem concerning not illegal under the law or under the STOCK Act. is the STOCK Act not enough? Like what are the issues with the STOCK Act do you think that we're addressing now? challenge of the STOCK Act is it still allows members to trade every eve

ry day if they want. I mean, they just have to disclose it. And the disclosure is a month too late. I read that in the STOCK Act. If you don't report a trade that you made of worth over $1,000 within 30 days, then you're penalized. You're paralyzed. That's not a what's that finalization actually like? It's only like $200 and it's usually not enforced Yet despite these shortcomings, the Stock Act's transparency requirements have drawn attention to congressional trading activity in more recent his

tory, particularly during the pandemic in 2020, I would say our our claim to fame in like 2019 and 2020 was a lot of those well-timed COVID trades it made us quite popular on the Internet. That whale on the screen isn't your mom. It's actually the Twitter account. Unusual whales whose stock trading platform has gained millions of followers for exposing politicians trades that seem a little too good to be above board. the height of COVID, it was around 1358 trades worth, which were around 60 mill

ion trades during COVID. And everyone remembers these stories. This is like Richard Burr going from 83% of equities to 3% factories, the rest being in U.S. Treasuries and then calling his brother the next day Lots of members were trading was equally split between Republicans and Democrats. Everyone remembers the famous ones with representatives like Susan Davis. She was selling thousands of dollars in Alaska Air and Royal Caribbean Cruises before COVID. Everyone like to point to Loeffler or Fein

stein doing it, but many members were doing it. This is not an isolated case. It was thousands of transactions. Mr. Weil was part of a League of Twitter accounts that track trades disclosed by members of Congress as required by the STOCK Act. This league included accounts like Chris Khodorkovsky of Quiver, Quantitative, there's one visualization I put together which reached the front page of Reddit, basically just showing like for one particular senator how they're buying versus selling varied o

ver time. And you just see this massive spike right before the covered market crash where they sold off like the whole portfolio. and Chris Josephs the man behind the accounts Pelosi Tracker and Politician Trade Tracker, which follows trades by Nancy Pelosi and other politicians. accounts run off of data from Autopilot, an app co-created by Joseph that lets you create real investment accounts that automatically copy high profile figures trades. Sounds pretty cool. The reason why GameStop became

became GameStop is because people could put in 100 bucks and just, you know, ride the wave Autopilot's the first platform that actually gets people involved, all in an effort to kind of bring more eyeballs to the issue. And I don't think there's a better way to highlight the hypocrisy of it by literally having money. Just copy it. like literally it's people's real money following Pelosi. now these Twitter nerds played a huge part in sparking public interest into how problematic it seems for memb

ers of Congress to invest in individual stocks, as news and tweets of these trades broke out, pretty soon, a flurry of politicians were introducing their own bills to ban trading. Individual stocks, Whether it was ossoff's banned Congressional Stock Trading Act from 2023. Conner's political reform resolution of that same year, or span. Berger's Trust in Congress Act from 2021, co-sponsored by Perry. And so the elements of the bill, you know, when you come to Congress, you would have a period of

time that you could put your money into a blind trust. If you have stock holdings when you arrive, put it into a blind trust, or you could divest and you're allowed to have mutual funds. I mean, certainly people can save for their retirement, but any individual stocks per hour legislation wouldn't be permitted. I've signed on to a bill that would require those particular things like stock trades to be put into a blind trust. the solutions are easy, right? You can put your finances in a a blind t

rust and a diversified trust. It's not like you're asking people to take a vow of poverty. You're simply saying you shouldn't be there, you know, making trades on stocks that you're you're regulating. our bill would ban members of Congress, their spouses and their dependent children from trading. I think the bottom line for the American people is members of Congress should be banned from trading stock. And as you pointed out, overwhelmingly Democrats, Republicans, independents and especially yo

ung people support making that change. And in terms of their personal finances, Ossoff voluntarily set up a blind trust after being elected. Spanberger and Perry don't invest in individual stocks, And Conner says he personally doesn't invest in individual stocks, family holds diversified trusts. And when independent managers make trades in their portfolio, Conner says they're disclosed in accordance with the stock Act. outside of these four approaches, everyone from the likes of Alexandria Ocasi

o-Cortez, Matt Gaetz, Elizabeth Warren and Josh Hawley have all come together to support a ban on trading individual stocks. if this squad of people who all hate each other can get on the same page here, why can't Congress pass this Mama jama? how likely is it that you see us reaching a ban on congressional stock trading in the near future? I think we will, because I think there's such outrage on both sides, on both the Republican and Democratic side, that that this is something members of Congr

ess shouldn't be doing. But, you know, we need more people co-sponsoring these bills. I think it's up to 60 or 70 members. That means 15% of Congress is for this and 85% is not. I think realistically, we're still getting more and more people comfortable with the principle of it. And frankly, I don't know that with a 60 vote threshold in the Senate, while I think we could pass it in the House, I don't know that we could pass it in the Senate yet. I'd love to be proven wrong by the Senate, But I h

ave my doubts. I don't know that it's going to happen this session. Right. But some famous guy said the journey of a thousand miles begins with the first step. So but why does it have to be a journey of a thousand miles, Scott? if 87% of Republicans and 88% of Democrats agree on something for once in our lives, shouldn't banning individual stock trading be a rare opportunity for these MEPs to actually do something that would make the vast majority of the people they're supposed to serve happy? I

think that America is looking for a win out of Washington, D.C., and I think in Washington, D.C. is always happy to have a win. Indeed, America is looking for a win. Yet as the Sun was setting over this foul smelling marble empire, I wondered how far that win might be from our grasp. because to be honest, folks, when you add all of this up, the unprecedented bipartisan support, the overwhelming public opinion, It's hard not to go tin hat mode and conclude that this isn't changing because enough

of Congress likes the fact that they can use their position to make money. You won't be surprised to learn that, although they may not say it in public, there are a lot of members of Congress who don't want this change. They want to retain the privilege and power to trade stocks. In my view, they if they're not acting in their own selfish and corrupt financial interests, which I believe some have, they're not recognizing just how damaging this practice is to public confidence in Congress. So go

ahead, Congress. Put a W on the board. pass common sense rules for yourself that will convince us you're not in this for the money. And then maybe when we all reflect on the job our representatives have done, we'll actually have a reason to think good work.