Congressional Committee Thinks It Shouldn’t Have to Answer the SEC’s Questions About Insider Trading
8th July 2014
It’s common knowledge that insider trading is illegal. In fact, we have an entire government agency in place to regulate trading and to investigate insider trading allegations. Executives have been sentenced to months (sometimes even years) in plush, well-appointed hellholes for participating in insider trading.
Members of Congress, however, were exempt from insider trading rules until 2012. An 2011 expose by 60 Minutes let millions of Americans know that members of Congress had plenty of access to market-changing information and were acting on it.
In a rare (ha!) show of self-preservation, a united House full of Congresspersons facing reelection battles passed the STOCK Act, which basically made Congress and its staffers play by the same trading rules as every other American.
In 2013, with Congressional members safely re-elected, the House decided to roll back its previous legislative effort in order to get back into the insider trading business. It tore out the stipulation demanding disclosure of trading activity — the one thing citizens could use to verify adherence to the “no insider trading” rule — stating that these disclosures were a “security risk.” This sailed through with unanimous consent late on a Thursday afternoon (the end of the Congressional work week) and was signed by the President the following Monday.