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Jim Himes Co-Sponsors Legislation to Stop Congressional Insider Trading

Posted by Larry Doyle on November 21, 2011 5:10 PM |

A week ago, I wrote Sense on Cents Calls Out Congress to Pass H. R. 1148 Outlawing Congressional Insider Trading.

In the midst of writing my commentary, I highlighted that:

I called my Congressman Jim Himes (D-CT) this afternoon and informed his spokesman of my initiative here at Sense on Cents. I let him know that Jim’s name will be published at Sense on Cents as supporting this legislation or not.

I got his spokesman’s attention and let him know how great the blogosphere was at spreading this type of information. He fully understood.  He informed me that he would speak to Jim and would respond within two weeks.

I welcome highlighting Jim’s photo above as a precursor of how we can make this initiative a VERY PUBLIC undertaking.

Whether or not Jim Himes “heard” my call or read my commentary, who knows. That said, I am happy to give credit where it is due as Himes recently announced that he is co-sponsoring the STOCK Act.

Himes’ office released the following statement entitled, Himes Pushes to End Congressional Insider Trading:

Congressman Jim Himes (CT-4) is cosponsoring legislation that prevents Members of Congress and their staffs from trading stocks based on nonpublic information they obtain through their work in Congress.

While Members of Congress are subject to the same insider trading rules as other individuals, there are no specific regulations regarding their work in Congress. “I am appalled that this legislation is necessary, but from what we’ve seen in the news this week, we can’t take any chances,” said Himes. “I am supporting this legislation because we must give Americans the confidence that their Representatives are acting exclusively in the interests of the people and communities they represent, not their own wallets.”

Himes is right. This legislation should not be necessary if those in Congress possessed the values and principles which any decent American would expect of their elected representatives.

The Stop Trading on Congressional Knowledge (STOCK) Act (H.R. 1148) prohibits Members of Congress and their employees from buying or selling securities, swaps, security-based swaps, or commodity futures based on nonpublic information they obtain because of their position. It also requires Members and their staffs to report those transactions within 90 days if the cost of the trade is more than $1,000.

Since taking office, Himes has actively worked to eliminate the possibility that conflicts of interest could occur in his personal operations. The week he was appointed to the House Committee on Financial Services, Himes voluntarily divested himself of any financial interests in the financial services and insurance industry.

To eliminate even the appearance of a “pay-to-play” scenario for earmarks, Himes adopted a policy that prohibits executives, board members, and lobbyists of organizations that receive an earmark at his request from donating to his campaign. He also cosponsored legislation to prohibit that practice.

I plan on calling back Himes’ office to thank him for co-sponsoring this legislation. At the same time, I will inform him that I plan on tracking this legislation as it moves its way through Congress. I will name names of those who support this legislation and those who don’t.

Moving right along, I see that Himes has been named to the House Committee on Financial Services.

Isn’t that interesting. How so?

Perhaps we can finally have somebody on that committee properly address the questions raised in a letter sent up to the Hill by the Project on Government Oversight in February 2010 addressing a wide array of questions dealing with our friends at FINRA. I wrote then, Is FINRA’s Future in Doubt?

Are the days of Wall Street’s self-regulatory organization known as FINRA numbered?

In the opinion of the very credible Project on Government Oversight, they should be. Why?

Significant failures, massive conflicts of interest, and more. POGO’s comprehensive and scathing letter to four separate House and Senate committees touches upon every failing within FINRA, with the exception of the integrity of the proxy statement used in the formation of the organization itself.

Strong allegations in a current lawsuit against FINRA make the case that Mary Schapiro lied verbally during roadshows and in the proxy statement. (For details on this lawsuit read here.)

Despite not addressing the issues embedded in that lawsuit, POGO touches all the other bases and covers all the other issues surrounding this organization. America deserves to be introduced to the organization that, in my opinion, squarely has a foot in both the Wall Street and Washington camps.

I make no excuses in categorically stating that FINRA defined the Wall Street-Washington incestuous relationship. I have no interest in vindication of my writing so much about FINRA over the last thirteen months.

I have every interest in exposing the issues embedded in this organization. America needs to truly learn about the issues surrounding FINRA and how and why this organization failed to uphold its charge to protect investors.

I congratulate POGO for bringing these issues to the Hill. I humbly submit and STRONGLY recommend you read, review, and share this letter with friends and colleagues. The pursuit of truth, transparency, and integrity within the Wall Street financial regulatory system goes to a whole new level with this letter:

February 23, 2010

House Committee on Financial Services
House Committee on Oversight and Government Reform
Senate Committee on Banking, Housing, & Urban Affairs
Senate Committee on Finance

Dear Chairman and Ranking Member:

The Project On Government Oversight (POGO) is writing to raise concerns that Congress’s efforts to reform the financial regulatory system have not adequately addressed the failures of the private self-regulatory organizations (SROs) that are tasked with protecting the investing public and maintaining the integrity of our financial markets.

Specifically, we urge you to take a much closer look at the Financial Industry Regulatory Authority (FINRA)—an SRO that regulates thousands of securities brokerage firms—and to consider whether FINRA can ever be an effective regulator given its cozy relationship with the securities industry.

I plan on calling Himes’ office again tomorrow. Hopefully we can go two for two.

Larry Doyle

Isn’t it time to  subscribe to all my work via e-mail, an RSS feedTwitter or Facebook? Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!

I have no affiliation or 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, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

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