Members of Congress hear a lot of secrets: classified briefings, confidential previews of pending legislation and the private opinions of constituents, regulators, corporate executives and world leaders.
Watchdog groups have long believed that some lawmakers use that information to make money in the stock market. Now a loose alliance of traders, analysts and advocates is trying to let Americans mimic the trades elected officials make, offering tongue-in-cheek financial products — including one named for former House speaker Nancy Pelosi (D-Calif.) and another that refers to Sen. Ted Cruz (R-Tex.) — that track purchases and sales after lawmakers disclose them.
Collectively, these investment vehicles have attracted hundreds of millions of dollars. At times, congressional investigators have used them to keep tabs on suspicious trading activity, according to people familiar with these investigations who spoke on the condition of anonymity because they are not authorized to speak to the media.
“Our mission isn’t to make everyone millionaires — it’s actually to highlight the hypocrisy of congressional trading in an effort to bring more transparency and trust back into our government,” said Christopher Josephs, the founder of Autopilot, an app that allows ordinary investors to mimic the trades of leading politicians, top hedge funders and other famous traders. “Hopefully it’s helping, but our slogan is, if you can’t beat them, join them.”
Members of Congress are permitted to trade on the markets, but a 2012 law, the Stock Act, clarified insider trading restrictions for lawmakers and ramped up reporting requirements. Lawmakers are banned from trading based on material and nonpublic information they learn through their jobs and have 45 days to disclose any trades they or their immediate family members make.
