US legislators of all political persuasions are getting rich on insider trading. 60 Minutes brought this to the attention of many in November 2011.
Published studies found that stock purchases by members of our House of Representatives: “outperform the market by 6 percent.” (9% for democrats, 2% for Republicans), and “positive abnormal returns” are both “economically large” and “statistically significant”. A recent Wall Street Journal article provides interesting examples, names names, and exposes the business of those engaged in harvesting and selling insider information obtained in congress.
Proof abounds, yet although several bills to stop this were introduced over the last few years none became law. Is the time right now?
There are more advocates of a bill and sunshine on the issue now. The current Stock Act, H.R. 1148: Stop Trading on Congressional Knowledge Act would make it illegal for Congressional members to profit on information learned in closed-door meetings. A Senate bill by the same name was introduced recently and another is in draft. And in the House, Eric Cantor advocates expanding the current bill to address more than just stocks, e.g. land deals.
Like Texas Governor Rick Perry , I advocate passing the Stock Act to “ensure that insider trading by members of Congress results in prison time, and not unseemly profits.” And, I am encouraged that there are over 200 co-signers now, although I am sure many signed on as window dressing for an election year. But, the bill still has a long way to go to become law.
The lobby for corruption (e.g., Fannie Mae, the Federal Reserve) is dauntingly entrenched. But, the form of corruption addressed by the STOCK act is readily understood by anyone and in clear view. If we just keep complaining, “We the People” can defeat it. Call your representatives.
Stop Insider Trading Dead In Its Tracks | RedState
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