U.S. Senator Josh Hawley (R-Mo.) reintroduced the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, a bill aimed at barring members of Congress and their spouses from holding or trading individual stocks during their time in office. The legislation, named to reference former House Speaker Nancy Pelosi, seeks to address concerns about lawmakers potentially profiting from insider information gained through their positions.
Provisions of the PELOSI Act
Prohibits members of Congress and their spouses from holding, purchasing, or selling individual stocks while in office. Allows investments in diversified mutual funds, exchange-traded funds (ETFs), or U.S. Treasury bonds. Requires current lawmakers to comply within 180 days of the bill’s passage, with newly elected members given the same timeframe upon taking office.
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Mandates that profits from violations be returned to American taxpayers via the U.S. Treasury, with additional fines possible through congressional ethics committees. Requires a Government Accountability Office (GAO) audit of compliance two years after implementation.
The bill responds to public concerns about conflicts of interest, as lawmakers have access to nonpublic information that could influence stock market decisions. For example, a 2022 New York Times study found that 44 of the 50 most active congressional traders bought or sold securities in companies potentially influenced by their committee assignments.
High-profile cases, such as trading activity by lawmakers during the COVID-19 pandemic briefings in early 2020, fueled calls for reform. The PELOSI Act is named after Nancy Pelosi due to her husband, Paul Pelosi, being an active stock trader, with trades like those in semiconductor stocks raising questions about potential insider advantages, though sold at a loss to avoid impropriety.
Hawley first introduced the PELOSI Act in 2023, but it did not pass the 118th Congress, which ended in January 2025. Other bipartisan proposals, like the ETHICS Act (2024) and the Ban Stock Trading for Government Officials Act (2023), also aimed to restrict congressional stock trading but faced challenges advancing. Public support for such bans is strong, with polls showing 86% of Americans favoring restrictions on lawmakers trading individual stocks.
The STOCK Act of 2012 already prohibits insider trading based on nonpublic information, but its $200 fine for violations is seen as insufficient, and enforcement has been weak. The reintroduced PELOSI Act is a renewed push, bolstered by President Trump’s April 2025 statement that he would sign such a bill if passed. However, bipartisan support remains uncertain, as some lawmakers resist restrictions, citing free market participation or recruitment challenges for candidates. The PELOSI Act reflects ongoing efforts to curb perceived conflicts of interest in Congress, but its passage depends on overcoming legislative hurdles and resistance from lawmakers accustomed to active trading.
The PELOSI Act, if passed, would have significant implications for members of Congress, financial markets, public trust, and legislative dynamics. Lawmakers and their spouses would lose the ability to actively trade individual stocks, limiting opportunities to diversify or capitalize on market trends. They would be confined to diversified funds or Treasury bonds, potentially reducing portfolio growth compared to active trading.
The 180-day divestment period could force rapid sales of assets, potentially at unfavorable market prices, and require complex financial restructuring for lawmakers with significant stock holdings. Some argue the ban could deter wealthy or financially savvy candidates from running for office, as they’d lose control over personal investments. However, others believe it could attract candidates prioritizing public service over personal gain.
Congressional trading has been scrutinized for moving markets, as lawmakers’ access to nonpublic information can signal investment opportunities. A ban could reduce such distortions, particularly in sectors like tech, healthcare, or defense, where congressional trades often cluster. Limiting lawmakers’ ability to act on privileged information could decrease volatility in specific stocks tied to legislative actions or committee oversight.
Polls show strong public support (86%) for banning congressional stock trading, as it addresses perceptions of self-dealing. Passage could bolster confidence in lawmakers’ impartiality, countering narratives of elite corruption. The act would reinforce the STOCK Act (2012), addressing its weak enforcement and low penalties. Fines and profit disgorgement to the Treasury would deter violations, signaling accountability.
While bipartisan in intent, the bill’s provocative name targeting Nancy Pelosi and sponsorship by a polarizing figure like Josh Hawley could deepen partisan divides, complicating passage. Lawmakers might approach legislation with less personal financial bias, particularly in areas like tax policy, healthcare, or defense contracting, where stock ownership often overlaps with committee roles.
Some lawmakers may push back, citing free market rights or proposing exemptions (e.g., blind trusts, which critics argue are imperfect). Enforcement mechanisms, like GAO audits, will be critical to prevent workarounds. Success could spur similar restrictions for other officials (e.g., Federal Reserve members or executive branch employees), reshaping ethical standards across government.
Without robust oversight, lawmakers could exploit loopholes, such as transferring assets to family members or using proxies. The GAO’s role will be pivotal but resource-intensive. Bipartisan support exists in principle, but competing proposals (e.g., ETHICS Act) and resistance from trading-active lawmakers could stall progress, as seen in prior Congresses.
Forced divestitures could flood markets with certain stocks, temporarily depressing prices, or push lawmakers toward less transparent investments like private equity. The PELOSI Act could enhance public trust and reduce conflicts of interest, aligning lawmakers’ incentives with public service.
However, its success hinges on overcoming political resistance, ensuring rigorous enforcement, and addressing unintended market impacts. If passed, it would mark a significant step toward ethical governance, though its long-term effects on congressional behavior and market dynamics remain uncertain.