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Tom Kertscher
By Tom Kertscher June 30, 2020

No sign Nancy Pelosi made millions trading on insider coronavirus information

If Your Time is short

  • Insider trading typically involves capitalizing on  nonpublic information to buy or sell stocks.

  • Pelosi’s husband exercised options to buy Amazon stock that later increased in value, creating a paper gain — not a realized profit — of about $1.1 million.

  • His purchase was in mid-January. House members weren’t briefed about the coronavirus outbreak until late January.

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 circumstances, 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.

Featured Fact-check

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.

Our Sources

IndependentCitizen.com, "Pelosi made millions in Coronavirus insider trading," April 2, 2020 (archived here)

Email, Nancy Pelosi spokesman Drew Hammill, June 29, 2020

Barron’s, "Nancy Pelosi’s Husband Scooped Up Amazon, Facebook Stock," Feb. 12, 2020

Politico, "House members, Senate aides traded stocks in early days of coronavirus," March 21, 2020

Clerk of the House, Nancy Pelosi Periodic Transaction Report, Feb. 11, 2020

Yahoo Finance, Amazon stock price, March 31, 2020

Business Insider, "Nancy Pelosi discloses her husband spent $5.52 million on Amazon, Facebook stock," Feb. 12, 2020

PolitiFact, "Deborah Ross says Richard Burr voted against a ban on insider trading in Congress, called it brave," Nov. 5, 2016

U.S. Securities and Exchange Commission, "Insider trading," accessed June 29, 2020

Email, Gregory H. Shill, associate professor of law, University of Iowa College of Law, June 29, 2020

True Pundit, "After Congressional Coronavirus Meetings, Pelosi Bought $5 Million in Amazon Stock Before U.S. Retailers Were Forced to Close; And She Already Made Millions," April 1, 2020

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No sign Nancy Pelosi made millions trading on insider coronavirus information

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