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Congressional Aides Pad Pockets on Insidie Knowledge

cpwill

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and it's legal. turns out (i know, your surprised) that Congress isn't interested in applying the same kinds of rules to itself as it applies to everyone else.



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 aides have ringside seats on the making of laws that affect American business. Receiving salaries up to roughly $170,000 a year, they can glean information about policies and government action before the public. They have access to information about hearings or legislation that can move stocks and markets...

Unlike many Executive Branch employees, lawmakers and aides don't have restrictions on their stock holdings and ownership interests in companies they oversee. Congressional rules say that requiring employees to do so could "insulate a legislator from the personal and economic interests that his or her constituency, or society in general, has in governmental decisions and policy."..

Terri McCullough, a 41-year-old aide to House Speaker Nancy Pelosi, had several successful trades in 2008 in a Charles Schwab brokerage account with her husband, Howard Wolfson, a former spokesman for Hillary Clinton's 2008 presidential campaign.

Mr. Wolfson says he bought about $2,000 worth of Freddie Mac and $2,700 worth of Fannie Mae on July 11, 2008, just two days before the Fed authorized emergency funding to Freddie and Fannie... In one day Mr. Wolfson bought and sold Freddie Mac and Fannie Mae shares as the stocks jumped about 40%, for a profit of about $2,000, he said. The couple made a total of $20,000 on trading in 2008, he said...

Another aide who trades actively is Cody Stewart, the executive director of the Western Caucus. This is a group of Republican lawmakers from Western states interested in energy legislation and other issues that affect Western states. It doesn't have a formal role in enacting legislation.

Mr. Stewart made short-term profits by trading in firms such as NCI Building Systems Inc. that had a stake in energy legislation. He made a $1,500 gain on two short-term trades in NCI in the summer and fall of 2009, according to Mr. Stewart and filings. He bought $3,782 in Sunpower on Nov. 19 and sold it Dec. 15 for $4,331, for a $549 profit, or 15% gain, in less than a month, according to Mr. Stewart and the filings.

Mr. Stewart held each of his investments, which were all in the $1,000 to $15,000 range, for just a few months. He says he made a total 2009 profit of $15,000 on 47 trades, including about $9,000 on trades in financial services companies.

As the Western Caucus' top full-time employee, Mr. Stewart kept tabs on many issues that cleared the House last year, as well as tax incentives for the renewable industry. ..
 

RosieS

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And who says there's no bi-partisan cooperation in Congress? By stifling the anti-insider trading law, aides from both sides of the aisle can continue to profit from what ordinary folk get jail terms for.

It'll probably stay this way as long as both parties see it as a job perk.

Regards from Rosie
 

samsmart

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This is why we need popular initiatives on a federal level, because it's the only way the people will ever have a real check against government.
 

obvious Child

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and it's legal. turns out (i know, your surprised) that Congress isn't interested in applying the same kinds of rules to itself as it applies to everyone else

How is this functionally different from insider trading? I understand the portion about no limits on Congress members' portofolios, but that doesn't mean they can trade on such information. Hmmm. Blind trusts seem to be the answer here.
 
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