Tuesday, June 19, 2012
"No, It Is NOT "Legal" For Congress To Insider-Trade"
"Insider trading is just as illegal for members of Congress
as it is for the 300+ million Americans, Indiana Law Professor Donna Nagy argues.
Congress never "exempted" itself from insider trading laws, Nagy says
--because Congress has never actually passed a law about insider trading.
By trading on information gathered in the course of their jobs, Nagy says,
Congress-people are abusing the public trust and violating a legal duty,
just the way any other insider-traders do.
...The definition of insider trading
is trading while in possession of material non-public information.
On September 16th, 2008, a new book by Peter Schweizer alleges,
Rep. Spencer Bachus and other members of Congress attended a private,
off-the-record (read: non-public) briefing from Treasury Secretary Hank Paulson
and Fed Chairman Ben Bernanke about the state of the economy.
The next day, some Congress-people who attended the briefing,
including Rep. Bachus and Dick Durbin,
sold stocks or bet against the market.
A few days later, after the market had tanked,
Rep. Bachus cashed out his bet for a tidy profit.
..."Material non-public information"
is any information that a reasonable person might want to consider
when making an investment decision.
...Bachus and Durbin (and others)
got the information they traded in possession of
because they were doing a job on behalf of their constituents.
The information was confidential,
and, in in all likelihood, material.
And they appear to have immediately used it
for their own personal gain."
Posted by Abner Doon at 10:07 PM