Tag Archives: Insider trading

The STOCK Bill Has Passed The Senate

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The Hill reported at 6 o’clock tonight that the STOCK bill has passed the Senate by a vote of 96-3. The main purpose of the bill is to prevent lawmakers from using inside information for personal gain in trading stocks and bonds. However, there were a number of other provisions in the bill that would limit some of the extra benefits lawmakers receive that were defeated.

The article reports:

But the underlying proposal to ban lawmakers from using private information they learn in the course of their duties to profit from stock trades or other transactions received broad bipartisan support.

“We tried to focus at the specific task at hand, closing loopholes to ensure that members of Congress play by the exact same rules as everyone else,” said Sen. Kirsten Gillibrand (D-N.Y.), a sponsor of the legislation.

“This sorely-needed bill will establish for the first time a clear fiduciary responsibility to the people we serve, removing any doubt that the SEC and CFTC are empowered to investigate and prosecute cases involving insider trading of non-public information that we have access to through our jobs,” she said.

Only three senators voted against final passage: Sens. Tom Coburn (R-Okla.), Richard Burr (R-N.C.), and Jeff Bingaman (D-N.M.).

Voting against this bill would be a definite liability for any Senator running for re-election in 2012. The bill was originally sponsored by Senator Scott Brown of Massachusetts after he learned that insider trading was going on. The 60 Minutes piece on insider trading by Congress which aired a few months ago galvanized public opinion against the practice.

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Received In My E-mail Tonight

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November 16, 2011

LIEBERMAN, COLLINS TO HOLD HEARING
 ON INSIDER TRADING LAWS AND CONGRESS

60 Minutes Story Sparks Examination

WASHINGTON – Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., and Ranking Member Susan Collins, R-Maine, announced Wednesday they would hold a hearing to examine how insider trading laws apply to Congress.

 The hearing, requested by Committee Member Scott Brown, R-Mass., and sparked by a 60 Minutes report, is intended to clarify the laws and rules that govern members of Congress who may profit personally from non-public information they learn in the course of their work.

“Insider trading by members of Congress – if it occurs — is a serious breach of the public trust,” said Lieberman. “No one in Congress should be enriching themselves based on information to which the general public has no access. Our hearing will set the record straight about how existing laws and ethics rules apply to Congress and whether they are sufficient to prevent unethical market trading.”

 Collins said: “Elected office is a place for public service, not personal gain. We have a duty to examine and address practices that can create the appearance of wrongdoing or undermine the public’s confidence in decisions made by Congress.

“I appreciate Senator Scott Brown’s leadership on this important issue. We need to assure the American people that the decisions we make are decisions of integrity, in which their interests are put first.”

 Senator Brown has introduced legislation intended to prevent members of Congress from profiting on information to which only they are privy. That bill has been referred to HSGAC. Senator Kirsten Gillibrand, D-N.Y., will introduce similar legislation soon. House members have introduced similar bills.
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Thank You, Scott Brown

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Official portrait of Senator Scott Brown

Image via Wikipedia

The article I posted this afternoon (just below this article) dealt with the fact that lawmakers exempted from the insider trading laws they impose on private traders. Evidently I was not the only one appalled by this.

CNN News reported this afternoon that Massachusetts Senator Scott Brown has introduced the Stop Trading on Congressional Knowledge, or STOCK Act, (S.1871) which would clarify insider trading regulations that do not clearly identify whether the use of inside government information constitutes insider trading.

The article reports:

The bill filed Tuesday by Massachusetts Republican Sen. Scott Brown would make it illegal for elected congressional officials, their staffs and executive branch employees to use information about pending bills that’s not available to the general public in making investment decisions. It would also forbid them from making such information public for personal gain.

All of this attention to insider trading follows a report aired by CBS’s “60 Minutes” on Sunday which highlighted instances in which congressional officials reportedly bought stocks around the same time Congress was discussing legislation affecting those companies or industries.

Based on recent reports on the number of Congressmen (and Congresswomen) who have drastically increased their net worth after being elected to Congress, this legislation is long overdue.

Thank you, Scott Brown.

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This Is Just Distressing

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Business Insider reported yesterday that Rham Emanuel sold up to $250,000 in Freddie Mac stock on February 21, 2003, days before it dropped by 10 percent and weeks before the announcement that it was under investigation. This is reported in Peter Schwiezer’s new book “Throw Them All Out.”

The article reports:

While by no means illegal; lawmakers are exempted from the insider trading laws they impose on private traders. But the timing of the trades is certainly suspect, especially given Emanuel’s service on the board during the time period for with the federal government was investigating the actions of Freddie Mac executives.

Why are lawmakers exempted from the insider trading laws they impose on private traders?

The beginning of cleaning up Washington, D. C., might be to make all lawmakers and office holders subject to the laws they pass. Wouldn’t that be a really good idea?

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