Congressional Insider Trading: Bait and Switch
Posted by Larry Doyle on September 11, 2013 9:57 AM |
Are people aware that Congress had meaningfully changed the legislation outlawing insider trading atop Capitol Hill? This bait and switch occurred a few months back but received very little fanfare at the time.
It deserves not only attention but real exposure. With no transparency there will never be a meaningful return of trust but that virtue is in short supply in the crony style of capitalism played in our nation’s capital. But I guess we are told to very simply “move along, nothing to see here.” I thank the regular reader who shared the following:
In November of 2011, the TV show 60 Minutes did a big expose on insider trading within Congress. While everyone else is subject to basic insider trading rules, it turned out that members of Congress were exempt from the rules. And, as you would imagine, many in Congress have access to market-moving, non-public information. And they made use of it. To make lots and lots of money.
Of course, after that report came out and got lots of attention, Congress had to act, and within months they had passed the STOCK Act with overwhelming support in Congress to make insider trading laws that apply to everyone else finally apply to Congress and Congressional staffers as well.
Of course, here we are in 2013 and, lo and behold, it is no longer an election year. And apparently some of the details of the ban on insider trading were beginning to chafe Congressional staffers, who found it hard to pad their income with some friendly trades on insider knowledge.
So… with very little fanfare, Congress quietly rolled back a big part of the law. . . Specifically the part that required staffers to post disclosures about their financial transactions, so that the public could make sure there was no insider trading going on. Congress tried to cover up this fairly significant change because they, themselves, claimed that it would pose a “national risk” to have this information public. A national risk to their bank accounts.
It was such a national risk that Congress did the whole thing quietly, with no debate. . . .
The best way to rebuild trust in Congress, apparently, is to roll back the fact that people there need to obey the same laws as everyone else. That won’t lead the public to think that Congress is corrupt. No, not at all.
Little wonder why national measures of trust in Washington remain at abysmally low levels.
Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.
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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.