Inside Trading: Nancy Pelosi Finds a Loophole
Former Speaker and current House Minority Leader Nancy Pelosi came under fire a few years ago when she used nonpublic information to make stock trading decisions. Now, her husband Paul is being accused of the same thing.
On November 17th of last year, green energy company SunEdison (SUNE) announced it would be purchasing the wind energy company First Wind. “Perhaps unsurprisingly, SunEdison’s stock soared an astounding 29% on news of this acquisition alone,” wrote a market-watcher.
What is surprising is that Paul Pelosi had invested nearly a quarter of a million dollars in SUNE stock just a few weeks earlier, on October 24th. Is he guilty of insider trading?
Paul’s office refused to answer any questions regarding his timely investment with SunEdison, but as I mentioned above, this isn’t the first time a Pelosi has made a very “lucky” investment.
Nancy was accused of trading based on information gathered through her official duties as representative a few years ago as she was busy fighting a House bill involving credit cards – and simultaneously busy buying up Visa stock when the company went public.
Nancy’s unscrupulous actions influenced the passing of a law that prohibits all members of Congress from using nonpublic information for trading and other personal gains. The bill was termed the “Pelosi Provision.” It seems she is now using her husband for such trades. But, as they say, what comes around goes around:
As reported by USA Today on April 21st, SunEdison has filed for Chapter 11 bankruptcy. As it turns out, the First Wind acquisition was part of a larger expansion that left the company in considerable debt. Things were okay until the botched Vivint Solar merger last summer. SunEdison had “no option but to file for bankruptcy after the Vivint merger fell through and it became clear no additional sources of liquidity were forthcoming,” explains Max Frumes, senior editor of Reorg Research.
Throughout its financial decline, SunEdison has maintained a presence in Washington with over $1 million spent on lobbying. In recent years, SunEdison has employed lobbyists with Podesta Group and green-energy focused lobbying firm 38 North Solutions in an attempt to preserve federal tax credits for the renewable energy sector.
Unsurprisingly, Pelosi fought to extend those tax subsidies.
Even more interesting is the incestuous relationship between Podesta Group and the Clintons Foundation: Podesta’s cofounder currently chairs Hillary Clinton’s presidential campaign and both SunEdison and the Clinton Foundation have donated to each other in years past.