Nancy Pelosi Earned Fortune on IPO Stock Through 'Illegal' Insider Trading
The Pelosis amassed vast fortune making trades using inside knowledge
Nancy Pelosi earned a fortune buying IPO stocks using "illegal" insider trading techniques that would result in years of jail time for the average person, a newly resurfaced investigation found.
Pelosi reportedly used the information she had exclusive access to as Speaker of the House to make trades on stocks, allegedly netting the senior Democrat up to $100,000 in 48 hours on a single trade.
As the battle continues between President Donald Trump and Pelosi's Democrats over funding for additional border security, the House speaker's own home often gets brought into the argument.
In January Pelosi declared walls to be "an immorality," yet many have asked if walls are "immoral," then why is the Pelosis' mansion surrounded by a wall?
When these questions are asked, it draws attention to lavish property Nancy and Paul Pelosi call home, yet questions as to how the couple has amounted the vast wealth required to live such a lifestyle are never adequately answered.
According to the House Press Gallery, House speakers earn an annual salary of $223,500, which amounts to a roughly $30,000 raise for Pelosi, who is now again the third-highest-paid elected official in the U.S. federal government (after the president and vice president).
Of course, this is a substantial salary by any means, but it doesn't come anywhere near to accounting for Nancy Pelosi's huge net worth.
Nancy Pelosi's net worth
According to Time, estimates of Pelosi’s net worth vary.
Roll Call’s most recent Wealth of Congress analysis says she’s worth at least $16 million, but OpenSecrets puts her around $100 million.
She has refused to talk about it.
What we do know comes from her financial disclosure reports.
For example, she and her husband, Paul, own a house and vineyard in California that’s worth at least $5 million and that brought in between $15,000 and $50,000 in grape sales in 2017.
She owns a commercial property and a four-story building in San Francisco that each earned her at least $100,000.
She also has stock in Apple, Facebook, and Disney.
Paul Pelosi makes most of his cash from Financial Leasing Services, Inc., an investment company.
But he’s not always bringing home the metaphorical bacon: He recently lost millions of dollars as the owner of the Sacramento Mountain Lions, a soccer team in the short-lived United Football League, according to Roll Call.
“He’s a private person, not involved in political life,” a Pelosi spokeswoman told the San Francisco Chronicle in 2007.
“Mr. Pelosi’s investments are separate from hers, and they have separate careers.”
So Nancy Pelosi's vineyard, property, salary, and stock add up to a substantial amount of income, but if her net worth is really estimated to be up to a whopping $100 million, where is the rest of the money coming from?
According to a recently resurfaced 2011 investigation by Steve Kroft for CBS's "60 Minutes," while serving in her previous stint as House speaker, Nancy Pelosi bought stock in initial public offerings (IPOs) that earned hefty returns while she had access to insider information that would have been illegal for an average citizen to trade with – even though it’s perfectly legal for elected officials.
In a piece relying on data collected from the conservative Hoover Institution, "60 Minutes" revealed that elected officials like Pelosi are exempt from insider trading laws – regulations that carry hefty prison sentences and fines for any other citizen who trades stocks with private information on companies that can affect their stock price.
In the case of elected officials – this secret information ranges from timely details on lucrative federal contracts to legislation that can cause companies’ stocks to rise and fall dramatically.
How do they get away with it? Lawmakers have exempted themselves from the laws that govern every other citizen.
At the time of the report in November 2011, Pelosi, D-Calif., and her husband had participated in at least eight IPOs while having access to information directly relating to the companies involved.
One of those lucrative deals came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House.
“Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House,” Steve Kroft of "60 Minutes" reported.
After she continually ignored his requests for comment, Kroft confronted Pelosi at a regular press conference after she once again declined an interview.
Clearly caught off guard, Pelosi stutters and fumbles for words as she's grilled by Kroft about the "illegal" trading.
Kroft: "Madam Leader, I wanted to ask you why you and your husband back in March of 2008 accepted and participated in a very large IPO deal from Visa at a time there was major legislation affecting the credit card companies making its way through the —through the House."
Nancy Pelosi: "But —"
Kroft: "And did you consider that to be a conflict of interest?"
Pelosi: "The — y — I — I don't know what your point is of your question. Is there some point that you want to make with that?"
Kroft: "Well, I — I — I guess what I'm asking is do you think it's all right for a speaker to accept a very preferential, favorable stock deal?"
Pelosi: "Well, we didn't."
Kroft: "You participated in the IPO. And at the time you were speaker of the House. You don't think it was a conflict of interest or had the appearance--"
Pelosi: "No, it was not —"
Kroft: "— of a conflict of interest?"
Pelosi: "—it doesn't — it only has appearance if you decide that you're going to have — elaborate on a false premise. But it — it — it's not true and that's that."
Kroft: "I don't understand what part's not true."
Pelosi: "Yes sir. That — that I would act upon an investment."
The Hoover Institution’s Peter Schweizer stressed that what Pelosi did was completely legal.
“There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy,” he told Kroft.
"So it's not illegal, but I think it's highly unethical, I think it's highly offensive and wrong."
“… Insider trading on the stock market,” Schweizer added.
"If you are a member of Congress, those laws are deemed not to apply.
“The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is — is considering not reimbursing for a certain drug that's market moving information.
"And if you can trade stock on — off of that information and do so legally, that's a great profit-making opportunity.
"And that sort of behavior goes on.”
Power is money, as they say...