WASHINGTON – House Speaker Nancy Pelosi, one of the most powerful Democrats in Congress, is making another massive options bet on semiconductor giant Nvidia just before the holidays. According to a new financial disclosure filed on Friday, Pelosi and her venture capitalist husband Paul Pelosi spent between $1 million and $5 million on Nvidia call options set to expire in late 2024.
The disclosure comes only months after the Pelosis took a bath on Nvidia shares right before passage of the CHIPS Act this summer, selling off stock for a $341,000 loss that could have netted the couple over $8 million in profits if held until today. The questionable timing of that sale as well as the new options purchase shows how the Pelosis continue to trade in stocks that directly intersect with Nancy’s work in Congress, despite growing calls for reform.
Nvidia is one of the world’s largest designers of graphics processing units (GPUs) needed for advanced computing applications like artificial intelligence. As AI technology takes off and chips become vital for national security, Nvidia’s fortunes have soared – the stock price is up over 240% year to date, adding over $600 billion in market value to make Nvidia the newest member of the elite trillion-dollar club.
Pelosi has been accused of trading on inside information before, purchasing stocks at opportune times right before favorable legislation gets passed. But the Nvidia transactions follow a different pattern, though critics say they still illustrate glaring conflicts of interest and lax oversight.
This shows how focused the Pelosis are on tech stocks and getting privileged access through investments,” said John Pudner, executive director of TakeBack.org, a nonprofit advocating for stricter rules on congressional stock trading. “Even when they take a loss, they turn right back around and double down. It raises questions about what information they have that has made Nvidia such a focus.
The Pelosis’ original Nvidia purchase came last December when they exercised options to acquire 25,000 shares at a strike price of $100. At the time, the stock was trading above $320, meaning the Pelosis immediately were in the money by over $200 per share, or $5 million total.
In July of this year, right before the House was set to vote on the CHIPS Act to provide $52 billion in subsidies for semiconductor manufacturers, Pelosi’s office disclosed that the shares had already been sold at an average price of $165. While still profitable, the suspicious timing meant the Pelosis left enormous gains on the table.
At the time, critics pounced on the questionable sale right before a major bill benefiting the industry. It is surprising to see the sale,” said the founder of Congresstrading.com who focuses on lawmakers’ investment moves. Also, what’s surprising here is that she sold and reported one day later. Usually she takes a couple of weeks. She wanted the public to know she cleared the books of this conflict of interest immediately.”
Now with Nvidia stock much higher and setting records, Pelosi is making an even bigger options buy. The new call options have a $120 strike price and expire in late 2024, meaning Pelosi is betting the stock will remain above that level for the next two years.
Nvidia was trading between $476 and $503 when Pelosi made the purchase last month, so the options were likely several hundred dollars in the money from the start. With Nvidia now at nearly $500 per share, Pelosi could exercise the calls immediately and pocket several million in instant profits if she chose.
Pelosi has denied any conflicts of interest in her trades, defending her right to participate in the stock market like any other American. She has rejected calls to ban lawmakers from trading stocks, though the backlash has only grown.
One proposal called the Banning Insider Trading in Congress Act would prohibit members of Congress and senior staffers from trading stocks, bonds, commodities, futures, and other securities. Pelosi has dismissed such legislation as “serious” but has not endorsed any measures to restrict trading activities.
Another proposal with bipartisan support called the TRUST in Congress Act would require lawmakers to place securities in blind trusts upon taking office. Pelosi has not backed this idea either, arguing that the lengthy disclosures already provide transparency.
Critics argue, however, that forcing stock sales to be disclosed up to 45 days after they occur provides plenty of leeway for lawmakers to trade on non-public information before it becomes public. Shorter disclosure windows and extending restrictions to family members have been proposed to tighten up the STOCK Act rules.
Pelosi is not alone in actively trading stocks while having access to privileged information that could impact markets before the public knows. Reports show many members of Congress buying and selling stocks in industries they oversee and companies that lobby on bills being negotiated.
But as the highest ranking and most powerful Democrat in Washington, Pelosi often draws extra scrutiny and criticism. Her net worth has skyrocketed to over $100 million since her election to Congress decades ago, due in large part to her husband’s savvy investments.
Paul Pelosi’s venture capital firm has backed many successful tech startups and IPOs over the years, raising suspicions that insider political information helps boost the returns. An exchange-traded fund tracking Democratic lawmakers’ stock trades even adopted the ticker NANC in a jab tying the fund performance to Pelosi’s actions.
Whether the latest Nvidia options purchase crosses ethical lines or not, the optics feed into the narrative that members of Congress use their powerful positions to enrich their own bottom lines. With voters of all political stripes calling for tighter trading rules, Pelosi risks wider backlash the longer she refuses substantive reform.
