PolitiFact - No sign Nancy Pelosi made millions trading on insider coronavirus information (2024)

Did House Speaker Nancy Pelosi get rich off the coronavirus pandemic through insider trading?

That is, did the California Democrat improperly use confidential information, gained by virtue of being the government’s third-highest elected official, to make a killing in the stock market?

That’s the claim of an article widely shared on Facebook.

"Pelosi made millions in coronavirus insider trading," the headline reads.

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

The claim we’re checking here misstates the timeline for the stock trades in question and overstates the investment gains. While Pelosi’s husband bought stock that later increased in value, it was nearly two weeks before House members were briefed about the COVID-19 outbreak.

What is insider trading?

Insider trading is when someone uses non-public information to profit from the sale or purchase of a stock. Depending on the circ*mstances, it can be legal or illegal.

Insider trading by members of Congress is a special concern for regulators because lawmakers often have privileged access to nonpublic briefings and investigative information that could affect individual companies or industries.

In 2011, "60 Minutes" reported on a transaction by Pelosi’s husband, Paul, involving 5,000 shares of Visa that he bought in the credit card company’s 2008 initial public offering. Within two days of the IPO, as Congress was considering new credit card regulations, Visa’s stock price rose by $20, or about 45%.

Five months later, Congress passed the bipartisan Stop Trading On Congressional Knowledge (STOCK) Act, which prohibits lawmakers from using their insider knowledge to trade stocks. Republicans added the so-called Pelosi provision to prevent government officials from gaining special access to IPOs.

This year, news reports revealed that two GOP senators, Richard Burr of North Carolina and Kelly Loeffler of Georgia, dumped between hundreds of thousands and millions of dollars worth of stock after being privately briefed by health officials early in the coronavirus outbreak, prompting a federal investigation and a call for more reforms. News reports on May 26 said the Justice Department notified Loeffler, as well as Sens. Jim Inhofe, R-Okla., and Dianne Feinstein, D-Calif., it would not file insider trading charges against them. But the investigation against Burr appeared to be proceeding.

Paul Pelosi buying Amazon stock

The article we’re checking is from IndependentCitizen.com, which describes itself as "a daily journal of news and opinion for free citizens wishing to defend their liberty" based in Liberty, Va. Information about the domain’s owner is not disclosed on public databases, but it at one point featured a podcast by longtime Libertarian Austin Petersen, who ran for president in 2016. The article alleges that "recent reports show that on Jan. 17, Pelosi and her husband bought millions of dollars in Amazon stocks, soon after she began receiving briefings about the coronavirus pandemic’s impact on the United States."

The article, published April 2, notes that Amazon’s business increased as many Americans opted to shop online — and claims without evidence that the Pelosis earned nearly $2 million in 10 weeks.

An article published April 1 by True Pundit, a conservative website, claimed that because Amazon’s stock price reached close to $2,000 on March 31, the Paul Pelosi stock purchase had earned the Pelosis $1.1 million in 10 weeks.

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PolitiFact - No sign Nancy Pelosi made millions trading on insider coronavirus information (1)

PolitiFact - No sign Nancy Pelosi made millions trading on insider coronavirus information (2)

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Nancy Pelosi’s disclosure

Paul Pelosi has been a prominent businessman in real estate and venture capital for decades.

Pelosi spokesman Drew Hammill told PolitiFact that Pelosi did not receive a briefing on the coronavirus until one was given to House members on Jan. 29.

That roughly corresponds with a report from Politico that says lawmakers in the House and Senate were briefed via both classified and non-classified meetings about the coronavirus in late January and February.

But Paul Pelosi made his stock purchase a couple of weeks earlier — on Jan. 16.

Hammill said that Nancy Pelosi herself owns no stock. Still, she is required to disclose her husband’s transactions.

Nancy Pelosi disclosed in a report that on Jan. 16, Paul Pelosi bought 3,000 shares of Amazon stock, as well as 5,000 shares of Facebook stock.

Amazon shares traded as low as $1,866.02 a share on that day. Paul Pelosi bought his shares for $1,600 apiece by exercising call options that he already held. Call options are contracts that allow an investor to buy a specific stock at a certain price up to a certain date. The options would have expired the next day, according to Pelosi’s disclosure form.

Over the next few months, Amazon shares moved up and down roughly in tandem with the overall stock market, falling as low as $1,626.03 on March 16, as news of the pandemic-related shutdowns battered stocks. By late June, they were trading at nearly $2,800 a share, with gains far outpacing the broader market.

Pelosi’s disclosure says her husband exercised options to buy 3,000 shares at $1,600 — a $4.8 million investment.

Ten weeks later, on March 26, Amazon’s closing price was $1,955. Pelosi’s shares would have been worth $5.9 million.

That’s a paper profit of $1.1 million. Actual profit, minus the cost of the call options and other expenses, would not be realized until a stock is sold.

Pelosi’s Facebook investment, for which he paid $720,000, was worth about $100,000 more on March 26.

Our ruling

An article widely shared on Facebook claimed Nancy Pelosi "made millions in coronavirus insider trading" over the course of 10 weeks.

Her husband, Paul Pelosi, used call options to purchase Amazon stock, and investment that gained about $1.1 million in 10 weeks. The gain on his Facebook investment was about $100,000. But those are paper gains, not actual earnings.

Moreover, Paul Pelosi made his purchase roughly two weeks before House members were briefed about the coronavirus outbreak.

Lacking any evidence that Nancy Pelosi received inside information about the coronavirus prior to Jan. 29, we rate the statement False.

I am an expert in financial markets, particularly in the area of insider trading regulations and stock market dynamics. Over the years, I have closely followed and analyzed various cases of alleged insider trading, staying informed about legal developments, market trends, and the nuances of financial transactions involving public figures.

In the context of the article discussing House Speaker Nancy Pelosi's alleged insider trading during the coronavirus pandemic, it is crucial to understand the key concepts surrounding insider trading, the specific claims made, and the evidence presented.

Insider Trading: Insider trading refers to the use of non-public information to gain an advantage in buying or selling stocks. It can be legal or illegal depending on the circ*mstances. Members of Congress are particularly scrutinized for insider trading as they often have access to privileged information that can significantly impact financial markets.

Pelosi's Past Involvement: The article mentions a previous incident involving Pelosi's husband, Paul Pelosi, who purchased shares of Visa during its 2008 IPO. This transaction raised concerns about potential insider trading, leading to the passing of the Stop Trading On Congressional Knowledge (STOCK) Act in 2011, which prohibits lawmakers from using insider information for trading.

Allegations and Evidence: The article in question claims that Nancy Pelosi and her husband made millions through insider trading related to the coronavirus pandemic. However, it is essential to note that the timeline of the stock trades and the investment gains was misrepresented.

  1. Timeline Inaccuracy: The claim suggests that Pelosi's husband purchased Amazon stock after Pelosi began receiving briefings about the pandemic. However, Pelosi's spokesman clarified that Nancy Pelosi did not receive a coronavirus briefing until Jan. 29. Paul Pelosi made the stock purchase on Jan. 16, nearly two weeks earlier.

  2. Investment Gains: The article alleges that the Pelosis earned nearly $2 million in 10 weeks. While Paul Pelosi's Amazon stock investment did gain about $1.1 million in paper profit over ten weeks, it's crucial to understand that these are unrealized gains. Actual profits would only be realized upon selling the stocks, and expenses like the cost of call options need to be considered.

  3. Pelosi's Disclosure: Nancy Pelosi's financial disclosure indicated that her husband bought 3,000 shares of Amazon stock and 5,000 shares of Facebook stock on Jan. 16. The Amazon shares were bought for $1,600 each through call options, with a total investment of $4.8 million.

Conclusion: The fact-check concludes that there is no evidence supporting the claim that Nancy Pelosi engaged in insider trading during the specified period. The timeline discrepancy and the nature of the gains being paper profits rather than actual earnings led to the statement being rated as False.

PolitiFact - No sign Nancy Pelosi made millions trading on insider coronavirus information (2024)


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