Nancy Pelosi Implicated in Insider Trading Against Nvidia

Tuesday - July 4 2023, 00:55 UTC - 1 year ago

TradingThomas (52k followers) has reported Nancy Pelosi bought PUTS against Nvidia, suggesting she had insider knowledge of the US government possibly imposing a stronger restriction against Nvidia and AMD chip sales to China. If true, the US government has a history of taking a tough stance against insider trading, with potential punishments ranging from fines, imprisonment and permanent ban from office positions.

TradingThomas (52k followers) reports Nancy Pelosi bought PUTS against Nvidia. This would suggest she has insider knowledge that the considerations about a far stronger ban against Nvidia and AMD chip sales to China will happen.

According to the SEC, a conviction for insider trading can result in: Fines of up to $5 million. Imprisonment of up to 20 years. Being banned from serving as an officer or director of a public company.

For government employees:Verbal warning.

With an increasing number of restrictions posed against Chinese companies over the last few years, the US has taken a hard stance in trade sanctions with the nation. Recently, the US government has begun looking into how major US companies, such as Nvidia, are providing telecoms equipment in China.

According to the Wall Street Journal and Reuters, the US government is currently pushing for a thorough investigation into the link between Nvidia and telecom equipment in China. The investigation involves examining the software inside of many of Nvidia’s products, which allegedly have close ties to Huawei, a leading Chinese tech company.Amidst the escalated tensions with China, reports of Nancy Pelosi buying PUTS against Nvidia have surfaced on social media. Many have speculated that this could be an alleged bid to take advantage of insider knowledge she may possess. PUTS refers to the option of selling stocks at a fixed price, usually before a certain date. This would garner Pelosi the profits in the event that the stock price falls below the set buying price.

Considering the recent restrictions imposed by the US government, the speculation that Pelosi may have insider knowledge of a stronger restriction on the sales of Nvidia and AMD chips to China could possibly result if true. Other celebrities and major corporation have faced scrutiny for taking advantage of insider information, so Pelosi would be wise to act with absolute caution when it comes to trading with Nvidia.

Regardless of the speculations surrounding the report of Nancy Pelosi buying PUTS against Nvidia, the US government has a long history of taking a tough stance against insider trading. The SEC has publicly stated that trading on material nonpublic information is prohibited and could constitute as fraud or manipulation. Furthermore, current US liability laws for insider trading could be extended to those selling or buying the stocks in the future according to The Verge.

Insider trading is illegal, and if caught and convicted, punishments vary greatly depending on the offender's status. For regular people, the punishments outlined by the SEC include fines of up to $5 million and imprisonment of up to 20 years. Additionally, those convicted of insider trading can face a permanent ban from serving as an officer or director of a public company. For government employees, the punishment is usually a verbal warning.

Nancy Pelosi’s alleged actions of buying PUTS against Nvidia come at a time of great tension between the US and China. The recent restrictions on certain telecom equipment has cast a dark light on tech giants like Nvidia. If the allegations posed against her are true, Nancy Pelosi should be warned of the potential consequences she could face.