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Nancy Pelosi Wasn't The Only Government Official Looking For Stocks To Buy In March
Nancy Pelosi's trades have become a big focus for retail traders because of certain information they assume government officials could be privy to. But she isn't the only one doing the buying, and today we look at a few more "government traders" taking positions in public companies this month. What did they buy and when? Here's a quick list of stocks to buy according to government officials, and, yes, Nancy Pelosi is one of them:
Nancy Pelosi Trades
Let's start with Nancy Pelosi. Earlier this year, she was at the center of attention after her husband, Paul, bought up to $3.5 million worth of call options in specific stocks in December. He placed the bullish trades on companies including Alphabet (GOOGL), Roblox (RBLX), Salesforce (CRM), and Disney (DIS). In March, there were a few disclosures filed showing options executions for some Call options. These included executing PayPal (PYPL), Disney, Apple (AAPL), and American Express (AXP) Call options. However, the one trade reported and made in March was Pelosi's Tesla (TSLA) Call options execution. The filing signed on March 21 shows that Pelosi exercised 25 Call options (2,500 shares) expiring 3/18/22 at a strike price of $500. The trade date of that TSLA option execution was March 17.
Mark Green Trades
Nancy Pelosi may lead in popularity as far as government trades go. But Mark Green, Republican Rep from Tennessee, has a strong history of market participation of his own. As an oil-rich state rep, Green has focused on the oil and gas industry and invested in lower-priced energy stocks. He's even gone as far as buying and selling energy penny stocks at times. What's Green up to in March? Based on his March filings, he remains a net buyer of energy stocks with four trades in March, and only one was a sale. Green made purchases in Equitrans Midstream Corporation (ETRN) and Energy Transfer LP (ET); he reported two separate ET stock purchases. His sale was in EnLink Midstream (ENLC). What's more, the purchases were made for hundreds of thousands of dollars. For example, the ETRN stock purchase was reported in an amount of “$250,000 - $500,000,” and as far as the two ET stock purchases made, the one on March 2nd was worth $250,000-$500,000 and the second on March 3rd was for $100,001-$250,000.
Ronald Estes Trades
The Republican representative out of Kansas wasn't as active as some of the other officials on this list. However, that doesn't mean that his March purchase of Honeywell International (HON) shares should be swept under the rug. Public filing documents show that Estes made his purchase of Honeywell stock on March 4th for $15,0001-$50,000. But this wasn't his only trade of the month. This article mainly focused on “larger trades,” defined as over $15,000. However, Estes also made a smaller trade in Spirit Aerosystems (SPR) stock as well. On March 4th, he purchased $1,001-$15,000 worth of the aerostructure manufacturer.
Take-Aways From Government Trades
This year, government officials trading individual stocks has become somewhat of a hot topic. Thanks to the STOCK Act, officials are supposed to be prohibited from using “any nonpublic information derived from individual's position…for personal benefit,” but as has been the case, violations are plentiful. Most of the violations concern the timeliness of filing, and when it comes to penalties, they're seemingly minimal. Violators are to pay a late fee of $200 the first time, with increasingly higher fines if the violations persist.
“House Members, officers, or employees who file a Financial Disclosure (FD) Statement or Periodic Transaction Report (PTR), or an amendment to a previously filed FD or PTR more than 30 days after the due date are required to pay a late filing fee of $200 under the Ethics in Government Act.”
Earlier this month, a report highlighted the latest string of US lawmakers not complying with the STOCK Act. Names included Democratic Senator from California Dianne Feinstein, Alabama Senator Tommy Tuberville, Republican Rep. Mo Brooks of Alabama, Democratic Rep. Debbie Wasserman Schultz of Florida, and a slew of others from both sides of the aisle.
Government Officials Are Buying More Than Just Stocks; Should They Be Able To?
The big question now is should government officials have the ability to trade individual stocks? It's a conflicting question for many as the opportunities to make money in the stock market are seemingly endless. Clearly, it isn't just a “buy and hold” approach either. Nancy Pelosi, for example, is trading options. You've even got people like Illinois House Democrat Marie Newman and Texas Senate Republican Ted Cruz gaining exposure to cryptocurrency. While Newman whose to buy shares of public companies Grayscale Bitcoin Trust (GBTC) and Coinbase (COIN), Cruz bought Bitcoin directly. Based on the Periodic Transaction Report from February 4th, The Texas Senator purchased $15,001-$50,000 worth of digital currency (on January 25th).
Right now, special interest groups are calling on the same government officials to end stock trading among lawmakers. In a letter to Nancy Pelosi, Kevin McCarthy, Zoe Lofgren, and Rodney Davis, a cohort of nearly 20 groups expressed strong sentiment toward banning stock trading conducted by officials, their spouses, and direct dependents.
"Our democracy is facing the largest crisis of public trust in a generation. Thankfully, you now have in your hands the tools to rebuild trust in our government and a mandate to use them. We look forward to working with you to pass this critical legislation and send President Biden the first comprehensive Congressional ethics legislation in almost a decade."
To this end, April could be a big month for government officials and their ability to trade. On April 7th, a meeting, “Examining Stock Trading Reforms For Congress,” will be held in Washington D.C. starting at 9 AM ET. We'll have to see what decisions, if any, will be made following this meeting and if we'll have another edition of Top Government Trades Of The Month next month.