Do you ever wonder how the members of Congress get so rich once they are in office? Is it because of the Insider Trading? Did you know that Congress can benefit from Insider Trading?
The WSJ reported on this last year. A House bill, which wasn’t even brought to a vote, would have forced lawmakers “to make their financial transactions public within 90 days of a purchase or sale” and “prohibit lawmakers from trading in financial markets based on nonpublic information they learn on the job.”
The WSJ article reported that several members of the House and Senate and their spouses bet against financial and real-estate markets in 2008, when markets were crumbling. Lawmakers made dozens of investments in leveraged funds that are designed to go up in value as the market goes down.
The bill to outlaw insider trading by members of Congress, known as the STOCK Act, was introduced by Democrats Louise Slaughter and Brian Baird and has been re-introduced off-and-on since 2006.
Both Republicans and Democrats have traded stocks and did or did not support the STOCK Act. Until the 1930’s, insider trading was legal and all is not as clear-cut as assumed, but I don’t want to get into that for the purpose of this article.
The Atlantic reports that in the final analysis, Congress underperformed the average portfolio by 2-3%.
Still, even if Congress has not profited, shouldn’t they follow the same rules as any corporate insider? Is this hypocritical of them?
Actually, I think this is funny. Here the Congress has the benefit of insider trading and they still can’t make a profit equal to that of an average portfolio. These are the people balancing our budget!!! Maybe we shouldn’t be concerned about them having access to insider trading since they are obviously helping Wall Street.