Insider trading has been and always be a problem, however, I was shocked to find out that currently United States Congressional members are excluded from those rules that prohibit Wall Street professionals from insider trading! Although that may come to an end according to an article in Advisor One titled, Congress’s Free Pass on Insider Trading, with the introduction of a bill named Stop Trading on Congressional Knowledge (STOCK).
What would The STOCK Act Prohibit?
According the article the following transactions will be prohibited:
- Prohibit members or employees of Congress from buying or selling stocks, bonds or commodities futures based on nonpublic information about pending or prospective legislative action.
- Prohibit those outside of Congress from buying or selling stocks, bonds, or commodities futures based on nonpublic information about pending or prospective legislative action if that information is obtained from a member or employee of Congress.
- Prohibit members, employees, or persons with nonpublic information from disclosing information about any pending or prospective legislative action if they believe that information will be used to buy or sell stocks, bonds, or commodities futures.
- Require members of Congress and employees to report the purchase, sale, or exchange of any stock, bond, or commodities future in excess of $1,000 within 30 days. Members and employees who choose to place their stock holdings in blind trusts or mutual funds are exempt from this reporting requirement.
- Require firms that specialize in “political intelligence” and obtain their information directly from Congress to register with the House and Senate, much like lobbying firms are now required to do.
Some people clamor about the net worth of our politicians, but I actually don’t care how much they are worth. Our Founding Fathers were wealthy I am talking about real multi-generational wealth, so I don’t believe that a wealthy person can’t be altruistic and/or care about the future of their Country. The problem arises when a politician’s greed isn’t aligned with the best interests of that country OR their wealth turns them into a dictator.
Notwithstanding, really take a look at those prohibitions:
Prohibit members or employees of Congress from buying or selling stocks, bonds or commodities futures based on nonpublic information about pending or prospective legislative action.
How haven’t they been made illegal, oh maybe 50 years ago?!