MAGA Lawmaker Accused of Insider Trading Musk's xAI Shares Days Before US DoD, Pentagon Expansion

The debate over whether US Congress members should be permitted to trade stocks has intensified following allegations concerning Congresswoman Lisa McClain's recent trading activity, which has raised questions about possible insider trading.

McClain is an active stock trader, with trading volumes reportedly exceeding $13 million (£9.7 million) in 2025, according to Quiver Quantitative. The chairwoman of the House Republican Conference has publicly denied any involvement in insider trading. This comes after a 7th January periodic transaction report revealed that her husband purchased up to $250,000 (£186,622) worth of xAI's private stock on 15th December — just days before the US Department of Defense announced plans on 22nd December to incorporate xAI's Grok into the GenAI.mil platform.

On 13th January, Defence Secretary Pete Hegseth disclosed that xAI's Grok had been granted access to classified Pentagon networks to accelerate military adoption of Generative AI tools. 'Very soon we will have the world's leading AI models on every unclassified and classified network throughout our department,' Hegseth stated this week.

McClain has frequently appeared alongside former President Donald Trump at various meetings and policy announcements, including a White House event on 3rd December, shortly before the stock trade in question.

McClain Vehemently Rejects Accusations

McClain has vehemently denied the insider trading allegations. She stated that if she or her family had been engaged in such activities, they would have made much larger trades. She added that, in recent funding rounds, Elon Musk's xAI successfully raised $20 billion (£14.9 billion), with investments from the Qatar Investment Authority, Nvidia, and Cisco.

The three-term Michigan Congresswoman appeared on NewsNation earlier this week, where she was directly questioned by host Connell McShane about her stock activity.

'There are reports your husband bought stock in Elon Musk's AI company, which is not publicly traded, xAI, just days before a report surfaced that the Pentagon was expanding xAI's role in military systems,' McShane asked. 'Can you assure us this purchase wasn't based on inside info?'

McClain responded confidently, saying she could '100 percent' assure the public she was not trading based on insider information. 'Because if it was, we wouldn't have bought 100,000 shares. We would've bought a heck of a lot more,' she added.

What Does the STOCK Act Say?

The STOCK Act prohibits members of Congress and their families from using material nonpublic information to make stock trades. They are also required to disclose certain trades within 45 days.

McClain explained that she could not have passed any sensitive information to her husband, asserting that the Pentagon keeps such details confidential. 'You know the Pentagon doesn't release that information. I can 100 percent assure you that we didn't have the insider information,' she reiterated.

While House Republicans are pushing a proposal to restrict future stock purchases by lawmakers, the legislation would not require members to divest current holdings, even if conflicts of interest arise. Many Democrats and watchdog groups oppose this proposal, citing concerns over transparency and potential conflicts of interest.

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