Speaker of the United States House of Representatives Nancy Pelosi and her husband Paul Pelosi arrive on the red carpet for the Time 100 Gala at Lincoln Center in New York City on April 23, 2019.
Angela Weiss | AFP | Getty Images
The House Speaker’s husband, Nancy Pelosi, a businessman and investor, may be on the rise after shares in Google’s parent company, Alphabet, broke on Wednesday.
Paul Pelosi bought millions of dollars worth of performance-linked call options in shares of Alphabet, chipmaker Micron and media giant Walt Disney Co. in December, days after the speaker said that she opposed the ban on members of Congress holding individual stocks. There is also growing pressure from several senators and representatives to limit stock ownership by lawmakers and their spouses.
Members of Congress and their spouses are not prohibited from buying or selling stocks, bonds and other securities. But they and their spouses must file disclosures of those trades within 45 days under federal STOCK law. Paul Pelosi’s option purchases were disclosed well within the legal deadline at the end of December.
While Alphabet, Micron and Disney were beaten in January amid a broader sell-off of tech names, a glowing earnings report from Alphabet on Tuesday sent its shares soaring more than 7% in the trading session. Wednesday’s negotiation. The spike sends Alphabet’s Class C shares up about 2.3% over the past month, well ahead of the S&P 500’s 3.7% loss.
On Dec. 17, according to briefing documents, Paul Pelosi purchased 10 Alphabet call options with a strike price of $2,000 with an expiration date set for mid-September 2022. This purchase in the currency is essentially a bet that Alphabet’s stock price will stay well above the strike price in mid-September.
Whether he ultimately receives a profit depends on the amount of premiums he paid to purchase the options contracts. He already reaped a bargain from Alphabet options last summer.
Speaker Pelosi sparked a backlash on Dec. 15 when she said she opposed a new effort to crack down on securities trading by members of Congress and their spouses.
“No,” Pelosi, D-California, told reporters at a press conference in December when asked if she would support such a ban. “We are a free market economy,” she said. “They should be able to participate in that.”
Later, the Speaker said she would allow such property limits to advance in the House if her caucus members supported them.
A representative from Chairman Pelosi’s office did not respond to a CNBC question about whether Paul Pelosi still holds those call options in Alphabet.
A growing group of bipartisan lawmakers says lawmakers’ business activities before and during the worst of the Covid-19 pandemic suggest some public officials are profiting from information before it is made public.
The Securities and Exchange Commission, Wall Street’s top regulator, is investigating whether stock sales by GOP Sen. Richard Burr of North Carolina just before the 2020 shutdowns began constituted insider trading. The Justice Department dropped its own investigations into deals made by Burr, Sen. Dianne Feinstein, D-California, and Republican Oklahoma Sen. Jim Inhofe.
Jon Ossoff, a freshman Democratic senator from Georgia, has become a champion of tougher business rules for Capitol Hill. Earlier this year, he introduced legislation that would require members of Congress, along with their spouses and dependents, to place their assets in a blind trust.
“I’m an advocate of banning stock trading by members of Congress who make politics, who have access to economic information and forecasts,” Ossoff said last month.
Progressive Democratic Senator Elizabeth Warren of Massachusetts and Representative Alexandria Ocasio-Cortez of New York have also expressed support for tougher regulation of lawmakers and their spouses.
“It is absolutely ridiculous that members of Congress can own and trade individual stocks while in office,” Ocasio-Cortez wrote in a Dec. 7 post. “The access and influence we have should be exercised in the public interest, not our profit. It should not be legal for us to trade individual actions with the information we have.”
But Democrats aren’t the only ones who want more rules.
House Republican leaders have discussed in closed meetings ways to campaign on the issue of capping stock trading on Capitol Hill. House Minority Leader Kevin McCarthy, R-Calif., and other House GOP members discussed the topic with top GOP donors last month in Miami, people briefed at CNBC told CNBC. this subject.
As bipartisan as the effort to suppress Congressional stock trading is, the opposition spans both parties.
“We can keep giving more reasons why people just don’t participate in public service. I’m not sure that’s a good idea,” Sen. Pat Toomey, R-Pa., told CNBC. Wednesday morning. “We have a very extensive disclosure regime. Every transaction must be declared, all assets must be declared. People can see what members of Congress are doing and draw their own conclusions.”
Later that morning, Rep. Ro Khanna, a Democrat from California, said recent transactions worth millions of dollars filed under his name were actually made by his wife.
“I don’t trade at all, and I’m for banning trade. It’s my wife’s money, which I had no legal right to. It’s before we got married, and I don’t tell her what she can do with the money before marriage,” he said. “I’m actually for banning stock trading, and I’ve never traded in stocks. stocks and I support banning members of Congress and not stock trading. I don’t think it should apply to the spouse’s pre-marital assets. I think that would be unfair.”
A Twitter profile run by congresstrading.com was one of the first to highlight the Pelosi trades and windfall potential.