PELOSI Act Targets Stock Trading by U.S. Lawmakers

A New Front in the Fight Against Insider Trading in Congress

On April 28, 2025, Senator Josh Hawley (Republican Party) introduced the PELOSI Act, short for “Preventing Elected Leaders from Owning Securities and Investments.”

The bill’s name pointedly references former House Speaker Nancy Pelosi, who has faced repeated accusations of insider trading.

The bill outlines a clear framework:

• Ban members of Congress and their spouses from owning, buying, or selling individual stocks.
• Permit investments only through index funds, ETFs, or U.S. government bonds.
• Require the forfeiture of any profits from their wrongful transactions to the U.S. Treasury, along with disciplinary action from ethics committees.
• Give lawmakers 180 days from the bill’s enactment to comply with the legislation.

Hawley argues that members of Congress should be fighting for the American people, not for their own investment portfolios. He maintains that access to insider information is fundamentally incompatible with the ability to profit from the stock market.

Critically, the PELOSI Act is not limited to lawmakers' time in office. The bill would require members of Congress to divest from high-risk assets even after retirement if they continue to influence political agendas directly or indirectly through lobbying. Thus, the initiative aims to close off long-term avenues of influence through investment strategies.

Moreover, it is worth noting that this latest push to strengthen financial ethics among lawmakers is not without precedent. Similar efforts were made with the passage of the Stock Act in 2012. However, such regulations have largely been evaded or inadequately enforced. 

Hawley’s new proposal aims to close those gaps, introducing tougher accountability measures and minimizing the gray areas.

Community Reaction: Skepticism and Irony

However, the PELOSI Act has drawn more skepticism than praise from Web3 and investment communities.

Investor @amitisinvesting remarked wryly:

To be honest, I don’t really care if they trade. Just disclose it in 30 minutes so I can see the trades as well.

In short, banning stock ownership may not address the underlying issues of privileged access to information and political self-interest.

Meanwhile, crypto-based prediction platform Kalshi proposed an alternative approach: 

It's better to create fair prediction markets for events. Odds if Congress bans trading stocks this year has not moved, still just 11%.

Kalshi argues that open and transparent event markets would allow the public to better assess the likelihood of political decisions without encouraging corruption. But could their optimism stem from the fact that Donald Trump Jr. personally advises them on strategic growth (essentially helping to expand their business)?

At the same time, leading betting platform Polymarket added its own dose of sarcasm to the broader wave of trolling: 

Senator Josh Hawley introduces “PELOSI Act” to ban Congress from trading stocks— but there's only a 15% chance Congress passes it.

Why Bans Are Only the Start of the Conversation

At first glance, the PELOSI Act reads as a reasonable step.

The logic is straightforward: access to nonpublic information + stock trading = a conflict of interest.

Nonetheless, bans are a tool, not a solution. The real risk lies in the lack of transparent oversight.

Even if members of Congress are barred from directly owning stocks, they could still invest through distant relatives, close associates, or complex passive asset management structures. 

Furthermore, a ban could encourage the growth of shadow practices, making it even harder to track the real financial interests of politicians.

Rather than forcing politicians out of the economy entirely, more effective measures could include:

• Mandatory public disclosure of all trades within 12 hours, allowing investments but ensuring full transparency.
• Creation of decentralized public asset registries on blockchain, where records cannot be altered or hidden.
• Registration of all trades through prediction platforms like Kalshi and Polymarket, where political decisions are tracked as probability-based events.
• Establishing a financial responsibility code that subjects all political investments to conflict-of-interest reviews.

Put differently, rather than imposing blanket controls on assets, reforms should focus on actions and their consequences. It would represent a fundamentally new level of accountability, where the real measure is not a ban itself, but how conduct affects public trust.

The PELOSI Act marks an important symbolic move. It reflects a growing societal unwillingness to tolerate the overlap between political power and personal financial gain. However, truly changing the system will require going further. The focus should shift toward building mechanisms for mandatory financial disclosure, rather than simply prohibiting stock ownership.

In the long run, a politician’s most valuable investment may well be their own reputation.