Aug 3, 2023
A senior member of the Senate Finance Committee bet against the U.S. stock market with a bearish ETF purchase last month.
Senator Thomas Carper (D-DE) bought two stakes of $1,000 to $15,000 in the ProShares Short QQQ ETF (NYSE:PSQ) on July 13, according to a new filing disclosure shared by CongressTrading on X.com (formerly Twitter).
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PSQ is an ETF that offers inverse exposure to the Nasdaq 100 Index — an index made up of the 100 largest non-financial companies listed on the tech-heavy Nasdaq.
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It is an attractive option for investors looking to hedge against or profit from a decline in the index.
But here’s why it’s a different story when an elected official decides to make the same play.
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Potential conflict of interest
The lawmaker’s suspected bet against the U.S. economy comes at a time when the Nasdaq 100 Index is up 42% year-to-date — thanks largely to strong performances by technology stocks, particularly those with an interest in artificial intelligence.
Carper’s position on the inverse ETF has been called out by CongressTrading on X.com (formerly known as Twitter) as a potential conflict of interest.
The watchdog group posted: “Senator Carper reports shorting (betting against) the American economy in his stock portfolio. So now is he incentivized to pass laws to ruin the economy so he makes money?”
Attempts to ban congressional stock trading
Public scrutiny of congressional stock trading has intensified in recent years, with politicians being accused of using their connections and insider information to score winning deals.
A new bipartisan law was proposed in late July, which would ban members of Congress and the federal executive branch — including the president — from owning or trading stocks, even in blind trusts.
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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.
