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« Lightning Strikes A House While Couple Films (VIDEO) | Main | Foreclosure Mom Raps »
Tuesday
Oct122010

Insider Trading Does NOT Apply To The Kleptocracy: Congressional Staffers Profit From Shady Trades


Because insider trading laws do not apply to Congress or staffs...

---

Jim Manley, a spokesman for Mr. Reid's office, initially defended Mr. Miller's purchase of shares in the company, Energy Conversion Devices Inc. He said the aide had no influence over tax incentives for renewable-energy firms, and that other factors boosted the stock.

But on Sunday, Mr. Manley added: "Mr. Miller showed poor judgment and Senator Reid has made it very clear to Chris and all his staff that their actions must not only follow the law, but must meet the higher standards the public has a right to expect from elected officials and their staffs."

Mr. Miller isn't the only Congressional staffer making such stock bets. At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009.

The Journal analysis showed that an aide to a Republican member of the Senate Banking Committee bought Bank of America Corp. stock before results of last year's government stress tests eased investor concerns about the health of the banking industry. A top aide to the House Speaker profited by trading shares of Freddie Mac and Fannie Mae in a brokerage account with her husband two days before the government authorized emergency funding for the companies. Another aide to Republican lawmakers interested in energy issues, among other things, profited by trading in several renewable-energy firms.

  • The aides identified by the Journal say they didn't profit by making trades based on any information gathered in the halls of Congress.  Even if they had done so, it would be legal, because insider-trading laws don't apply to Congress.

A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006.

"Congressional staff are often privy to inside information, and an unscrupulous person could profit off that knowledge," says Vincent Morris, a spokesman for Rep. Louise Slaughter (D., N.Y.), a leading backer of the "Stop Trading on Congressional Knowledge Act," or STOCK Act. "The public should be outraged there is no law specifically banning this."

 

 

 

 

 

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Reader Comments (7)

Major agricultural commodities continued their extended run-up in price, underscoring how much of America's farm belt is booming even as the overall economy continues to struggle.

Contracts for the delivery of corn and soybeans into mid-2011 jumped Monday by 5% and 2%, respectively, after rising their daily permissible limits on Friday, when the U.S. Department of Agriculture sliced production estimates by small percentages. Cash cotton prices rose 3.3% Monday after a 3.9% gain Friday. They are 86% higher than a year ago.

http://online.wsj.com/article/SB10001424052748703298504575534210333046160.html?mod=WSJ_article_MoreIn_Business
Oct 12, 2010 at 6:50 PM | Registered CommenterDailyBail
Regional bank TCF Financial Corp. filed a lawsuit against the Federal Reserve seeking to halt forthcoming rules on debit-card transactions that could hurt the bank's revenue.

Tuesday's federal-court suit by one of the nation's biggest issuers of debit cards marks one of the first legal challenges to the Dodd-Frank financial-overhaul bill that was enacted in July. The Wayzata, Minn., bank is fighting expected restrictions by the Fed on how much banks can charge merchants for debit-card transactions.

http://online.wsj.com/article/SB10001424052748704164004575548562090864450.html?mod=WSJ_newsreel_business

Important lawsuit...
Oct 12, 2010 at 6:52 PM | Registered CommenterDailyBail
Oct 12, 2010 at 6:54 PM | Registered CommenterDailyBail
Welcome to Wal-Mart. Would you like to open a bank account?

Nightmares of such a greeting have kept many community bankers up at night, and their lobby has fought hard to see that it doesn't happen. Yet the Bentonville, Ark., behemoth has found a back door into certain banking services. While the company that helped open it, Green Dot, has profited handsomely, investors may have missed their opportunity.

http://online.wsj.com/article/SB10001424052748703794104575546361605817130.html?mod=WSJ_newsreel_markets

Use google search to get around the WSJ paywall...
Oct 12, 2010 at 6:56 PM | Registered CommenterDailyBail
The search for yield risks becoming a forced march. The first round of quantitative easing was vital in boosting risk appetite at a time when markets were deeply dysfunctional. But now the prospect of more QE—when investors are already gobbling up 100-year bonds, record levels of junk debt and subordinated hybrid corporate issues—could create new distortions, adding to both the political and financial pressures in global markets.

http://online.wsj.com/article/SB10001424052748703794104575546142696170942.html?mod=WSJ_newsreel_markets
Oct 12, 2010 at 6:57 PM | Registered CommenterDailyBail

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