Congress imposes insider-trading ban on itself

[choxorn]

WASHINGTON — The Senate gave final approval on Thursday to an ethics bill that bans insider trading by members of Congress, clearing the measure for President Obama, who called for such legislation in his State of the Union address two months ago.

The legislation was adopted by unanimous consent after the Senate voted, 96 to 3, to end debate on the bill, which was approved in the House last month by a vote of 417 to 2.

Senator Joseph I. Lieberman, independent of Connecticut and the chief sponsor of the measure, said it was “the most significant Congressional ethics legislation we’ve adopted in at least five years.”

The lopsided votes showed lawmakers desperate to regain public trust in an election year, when the public approval rating of Congress has sunk below 15 percent.

The bill prohibits members of Congress from trading stocks and other securities on the basis of confidential information they receive as lawmakers. It makes clear that the insider trading ban in federal law applies to members of Congress and their aides and to officials in the executive and judicial branches of the federal government.

In addition, the bill requires lawmakers to disclose the purchase or sale of stocks, bonds, commodities futures and other securities within 45 days of transactions, rather than once a year as they now do. The information will be posted on the Web.

Thousands of federal agency officials, including many at the White House, will be subject to similar reporting requirements.

Linky

TL;DR version: A lot of government people have gotten a lot of money by using information they get from their jobs to know things about stocks, which is generally considered to be illegal. They passed a law confirming that it was, in fact, illegal for them to do this, so that it looks like they're actually doing something.

A measure for stronger enforcement was axed by House Republicans, so it's not clear exactly how effective it will be. It's probably slightly better than the current law, but it still seems a little bit lacking.

 

[Berzerker]

I'll believe it when I see these crooks sent to jail

 

[Core Imposter]

Reporting requirements eh.

I am sure this will solve our country's problems.

 

[Mise]

Isn't this already illegal?? Are they saying that congressmen are not subject to the same laws as the rest of us?

EDIT: Just looked on wiki, apparently they're not?! http://en.wikipedia.org/wiki/Insider_trading#Insider_trading_by_members_of_Congress

Insider trading by members of Congress

Members of Congress are exempted from insider trading laws and thus can act on information they are bound to gain in the course of their congressional activities, although house rules [22] may consider it unethical. A 2004 study found that stock sales and purchases by Senators outperformed the market by 12.3% per year.[citation needed] Peter Schweizer points out several examples of insider trading by members of Congress, including action taken by Spencer Bachus following a private, behind-the-doors meeting on the evening of September 18, 2008 when Hank Paulson and Ben Bernanke informed members of Congress about the imminent financial crisis, Bachus then shorted stocks the next morning and cashed in his profits within a week.[23] Also attending the same meeting were Senator Dick Durbin and John Boehner; the same day (trade effective the next day), Durbin sold mutual-fund shares worth $42,696, and reinvested it all with Warren Buffett. Also the same day (trade effective the next day), Congressman Boehner cashed out of an equity mutual fund.[24][25]

WTH, Congress?!?!?!

 

[bombshoo]

I wonder how many loopholes they left for themselves.

I guess it's at least a step in the right direction.

 

[Bestbank Tiger]

I wonder how many loopholes they left for themselves.

I guess it's at least a step in the right direction.

Can their spouses still trade on inside information? That's the first place I'd look.

If they really wanted to do something, they'd pass laws restricting what members of Congress can own. Between the election and taking the oath of office, they should have to divest their holdings. They can buy a 2-year CD and can own their residences in DC and in their home district. If they're re-elected, they re-up the CD for another two years.

Then it's a lot harder to have a conflict of interest.

 

[Mise]

Well if they just applied the exact same insider trading laws that every single other American is subject to then there will at least be a level playing field w.r.t. loopholes.

 

[kochman]

isn't this already illegal?? Are they saying that congressmen are not subject to the same laws as the rest of us?

Edit: Just looked on wiki, apparently they're not?! http://en.wikipedia.org/wiki/insider_trading#insider_trading_by_members_of_congress



WTH, congress?!?!?!

i wonder how many loopholes they left for themselves.

a lot.

 

[Leoreth]

The Daily Show already dedicated almost a whole episode to it roughly a month ago, including the guest interview segment. I didn't think something would actually happen back then.

If you're interested, here it is.

 

[Formaldehyde]

I think any federal congressman, president / vice-president, or political appointee should be required to put all their investments and those of their spouses and close family members into a blind trust from the date they take office until 5 years after they finally leave.

Good luck with getting anything like that passed though...

 

[choxorn]

And we should probably also think about Ben Franklin's idea about what their salary shoud be.