https://www.cbsnews.com/news/congress-trading-stock-on-insid...
Due to the traction the story got, it led to the Stock Act.
But once the news cycle was over it was quietly, rapidly, and largely repealed:
https://www.npr.org/sections/itsallpolitics/2013/04/16/17749...
And here we are a decade later “shocked” https://www.youtube.com/watch?v=SjbPi00k_ME
The substance of that article only says that the online public disclosure requirements were narrowed from encompassing all Federal and Congressional employees to only elected officials and key appointees. If you read the Whitehouse signing statement (https://obamawhitehouse.archives.gov/the-press-office/2013/0...) linked by the article, this is more clear. Employees' disclosures were taken offline out of privacy concerns, apparently. The article is somewhat ambiguous on this point, and hints at more significant changes, but I take it as rhetoric, otherwise it would have been relatively easy to be crystal clear on these points. (Shame on the reporter, but at least such unquestioned political cynicism is non-partisan.)
Perhaps there have been subsequent amendments as well. Nonetheless, according to this April 2020 research paper, https://www.nber.org/papers/w26975, Senators have underperformed the market since 2012.
EDIT: And most obvious, if trading disclosures of elected officials weren't still available online, then websites like https://senatestockwatcher.com/ wouldn't exist.
The better bill is the one that passes.
Of course, that's likely not going to happen anytime prior to our Sun going red giant, but we can dream.
I disagree.
"Hawley's bill would have the Government Accountability Office provide oversight, whereas Ossoff would leave that to congressional ethics committees."
Congressional ethics committees are notoriously partisan and unreliable in enforcing. You are trusting Congress members to police themselves, which isn't remotely reliable. In reality, they only police members of the opposing party. The GAO would be far superior.
> in that it prevents children from also trading (see Sen. Manchin's shady dealings).
Were Manchin's adult children "dependents"? How is that defined in the bill? Also, it's been interesting to see negative attention on Manchin suddenly get ratcheted up the minute he wouldn't vote in a manner popular with people who don't live in his state.
> This is a common tactic in the Senate to subvert legislative direction.
The assumption that the purpose of this specific instance is to "subvert" is speculative. I'm no fan of Hawley, but he has been very public about wanting to ban stock trades by members as much as Ossoff.
I tire of the red/blue tribal loyalties on this site. I see two corrupt tribes, filled with people who won't vote for this bill. But both, and their foolishly gullible supporters, just sit and point at the misdeeds of the opposing side, unaware of their information bubbles.
Until then we're just giving completely, utterly pointless kudos to whoever can play chicken most convincingly. I'm sure Hawley's office could have come up with something with even slightly more teeth if Ossoff came to him first with a GAO bill.
Even if Ossoff's bill went anywhere, it's too soft and the people setup to hold them accountable are themselves.
Side note: If you want to sling mud against Manchin as he's open season now for the Dems apparently please be specific so people can refute you.
I'll take one step at a time instead of all at once attempt and nothing in the end.
Keep an eye on the negotiations and who stalls what, what they demand, etc.
Make politicians construct simple concise bills.
edit: https://news.ycombinator.com/item?id=29915575 JPKab said it better than I could
The way I see it, congressional trading rules are a natural extension of insider trading rules. Children/spouses should be prevented from trading not because they are children/spouses, but if/because they’ve been made aware of inside information.
What part of the constitution would prevent such rules from being implemented?
I mean this sort of makes sense. In order for an adult child to be a dependent they have to be pretty much invalid, and not responsible for their own actions.
When I was subject to public officers law, my kids were unable to play the lottery, engage in any sales or lobbying activity without written permission from agency counsel.
I know of one case where a senior leader was referred for civil penalty (fine up to $20k) because he took a meeting with a prospective contractor that his kid worked for.
There’s other areas like this as well. The actions of a spouse or child can affect a security clearance or be disqualification for employment as a police officer.
If you work in the financial industry, there are already draconian rules on oversight for all trades made by you, your spouse, your dependents, and even roommates. Why shouldn't this oversight extend to members of congress?
Can you explain the reasoning more? And why making laws for Congress would raise a novel issue?
I don't remember any part of the constitution that would apply either way.
> Ossoff's bill would leave oversight to congressional ethics committees
Lol, ok buddy. We've all seen that congress in not able to conduct meaningful self-oversight.
> violations of Hawley's measure would require lawmakers or their spouses to disgorge any investment to the U.S. Treasury
Unlike Ossoff's bill, that's some serious teeth.
https://thelastpsychiatrist.com/2013/09/how_does_the_shutdow...
>If Senator X "makes a concession" the relevant media will proclaim him a loser and a coward, they don't want representatives, they want cage fighters. There's no reward for compromise and there's no safe place to attempt it, either.
>[...]
>Or, said differently, if there was a government shut down at a time when the news came out only weekly, it would mean we were getting a new flag.
Pelosi represents SF. It's her congressional district. Her investing in the top SF companies (many of which include tech companies which have performed really well) is a rare case of supporting her constituent businesses. Sure it's horrible optics and politics and yada yada but people should consider that the alternative (banning all trading as a member of congress) is potentially worse for open democracy.
"Murder is OK as long as it's committed in the town square" is a terrible policy. Lawmakers taking advantage of insider info, let alone upcoming regulatory changes, to make huge amounts of money while holding public office is straight-up antithetical to the purpose of being in Congress (the people). Want to make tons of money? Great, become a banker or a C-level or a lawyer in private practice, not a congresswoman.
That said: I think your hypothetical is better than our current, objectively ridiculous situation. “Everyone’s doing it in the open” is a pretty lame excuse, and definitely doesn’t preclude the possibility of kids + shell companies anyway.
That perception fuels whataboutism and facilitates graft. Nobody is going to investigate Senator X and trigger a counter-investigation of Representative Y.
Why is it worse?
The senate is 50/50, this logic works both ways. Either party could vote for the other’s bill tomorrow and be done with it. I’d prefer the Dems work with Hawley to pass the better bill.
This could also depend on how a new law is written. If the law is explicit that information gained as an elected official is material/non-public, then existing tipping clauses may already account for this.
However, if this is not explicitly accounted for, it becomes an easily exploited loophole.
I'm still curious though - why is this potentially a constitutional issue?
It’s pretty easy to see how this stuff goes off the rails.
she has famously said that "you have to pass the bill before you see it" - not an hyperbole, the obamacare bill was being negotiated forever and changing but at one point of time they had to force the vote first even if the version was not read by everyone.
that kind of story applies to a lot of bills. I may be able to sneak in a paragraph just before the vote that says "3 billion dollars of government subsidies for drought stricken cashew farmers in California" and if someone can find that out before it is published on their websites, would you not think it is a private information?
I'd guess there are other members of congress who did/do exactly the same thing (but much more low key and out of sight) who are not very happy about it being potentially ruined for everyone else.
What does this mean? Other reps do exactly the same thing as Pelosi and are required to report their trades in the same way. Pelosi is the target of attention due to reporting about exclusively Pelosi's actions
In my view they need to out their money into a blind trust. If they don’t want to do that they shouldn’t run for office and a nice side effect would be that congress isn’t full of millionaires.
But even your first sentence is some hypothesis, not based on any facts or timeline of events. Looks like her husband who has his own investment firm was writing some clever option contracts and such on big name companies like Roblox.
Everybody in the market is risking it on these types of companies these days.
I'm honestly not sure what you want me to say. You're welcome to Google the issue for yourself and make a determination.
Passing bills, sure. But most of these impactful bills are like months in the making and everybody knows which way they are heading.
Her husband is an investor, so no doubt he writes all these options and such.
Nancy Pelosi's husband regularly beats the market by large margins. You can find it suspicious or not. I've given my opinion. She knows her own mind, she has access to market-moving-information prior to the public, and she likes to buy stock.
She doesn't need to receive information (though she can). She just needs to generate it (which is her job). When you are in a position to move the market, you should not be buying options.
Plus they're already rich, which means they can invest a good chunk in higher risk. Higher risk has paid dividends bigly in the past decade and especially last 2 years.
Anyway, need some proof. But I 100% agree that senators should be held to a very high standard, and would welcome strict laws that allow them only general investments in the US economy.
As for the applicability of those rights to specific issues, that's up to the courts, which have a record of creative interpretations to do whatever they want to.
> But buying stock means you don’t own it (otherwise you wouldn’t need to buy it)
That doesn't even make any sense.
I've spent the vast majority of my professional career working in finance, subject to SEC rules and regulations regarding insider trading. None of this precludes own, buying or selling stocks. SEC rules prohibit acting upon material nonpublic information for financial gain, the likes of which congress critters do all the time. It is this act of buying and selling on material nonpublic information that is illegal for the common folk, and ought to be illegal for those making the laws that affect the stocks. Don't want to be subject to mandatory holding periods and disclosures? Buy ETFs like the rest of us. And yes, insider trading rules apply to my family as well. I cannot tell my parents or children or siblings or in-laws or friends any material nonpublic information with the intention of financial gain through buying or selling stocks.
If one is going to engage in buying & selling of stock to which one is privy to insider knowledge, there are means to both buy and sell said stock. It usually involves disclosures of intention to buy or sell and a predetermined date. It may typically only be done within a certain time frame, typically quarterly after earnings have been announced. If you're buying, there's typically minimum holding periods (length varies, but it effectively precludes day trading). Point is, there are legal ways to buy and sell within the rules. No one is being deprived of rights. But, if you buy or sell in violation of the rules, there may be forfeiture involved, because you were never allowed to make the transaction in the first place. Break the rules, be prepared to pay the penalty.
Congress is not above the law, and they should be subject to the same rules and regulations as everyone else. This isn't a Republic or Democrat issue. It's common sense, but doesn't benefit the people in charge of making the laws, so it doesn't happen. Or if anything does happen, it's loudly and publicly championed and then quiet neutralized when things have calmed down and no one's looking anymore.
Let me put it bluntly. If I, not being a member of Congress, pulled the same thing Pelosi does with her husband and their trading, my spouse and I would both be in jail and rightfully so. And no, Pelosi is by far the only one, but she's a very public example of this as the Speaker of the House.
Now, if it were legalized, professional investors would be monitoring the trading activity of insiders. down to the microsecond. Any adverse trades by insiders would provoke an immediate reaction, and so the gains by such trades would be minimized.
Furthermore, such moves would be public information. Would you invest in a company where the insiders were making adverse trades? I wouldn't.
As for Congressmen, if I was trying to unseat one, you bet I'd make a campaign issue out of them if they're using the seat for personal gain.
You're not wrong on this. There are, and it is. One of my previous jobs I worked at a dark pool exchange. A dark pool is an entirely legitimate and regulated quasi off the books market. It's "dark" in that prices at the exchange are not listed; no best bid/offer or any other order information is advertised. It's also members (customers) only. It's not available to the general public. It's primarily a ways of moving high volumes of trades with the intention of not moving the market. Executed trades are reported as required, and NMS (National Market System) Regulations have to be abided by. i.e. A dark pool cannot trade outside of the NBBO (National Best Bid/Offer) without first having taken (bought /sold) top of the book at the NMS exchanges that have the NBBO. We're still subject to SEC, FINRA reporting and regulation and are regulated by the same.
It was a small firm, less than 10 engineers working on the technology stack, so we all wore many hats. Besides working on the trading system, I was also responsible for working with our chief compliance officer to gather trade data for inquiries from SEC, FINRA, even the FBI. Most of what they were looking for was not insider trading, but other prohibited activities such as spoofing and front running.
I've also worked at hedge funds, private equity funds, mutual funds & investment advisors. Every firm I've worked for (especially the hedge funds & PE funds) have used technology to their best (legal) advantage they can. Need lower latency? Co-location at the exchange is a perfectly legal option. Racks closer to the exchanges offer a premium rent over those farther away. Microwave transmission for line of sight? Most certainly. Lower latency, but also significantly lower bandwidth. Bonus points for being able to bounce a signal off the ionosphere from Chicago to London faster than satellite or sea cable.
That said, when it comes to Congress, they're in the unique position of not just being privy to an absurd amount of material nonpublic information that unscrupulous actors can make a killing off of, they're also in the unique position of enacting (or retracting) laws that affect the companies they're trading on. It's this power that is unique to Congress, and why they deserve extra attention and rules on reporting, holding periods, trading windows, etc.
Insider trading is a problem among the general public, but it's not nearly as big of a problem as the media makes it out to be. Yes, there are unscrupulous firms out there, but the vast majority take the rules and regulations seriously, because you have to, or you will no longer be in business and real jail time for potential violations. I believe Congress should be held to a higher standard than the general public because of their unique power over the industry.
By the way, society does generally let you buy whatever you want. It’s only when your ownership of an item infringes the rights of others are you generally barred from owning something. E.g. you’re not allowed to buy nuclear weapons because they pose a danger to those around you. Allowing policy makers and their families to trade stocks also poses a danger that insider knowledge will be used for personal gain in the market. This is a form of theft against the market and public at large. What about the rights of everyone else?
It's a simple, definitive answer.