U.S. Senate will vote on insider trading

[Judi Lynn]

U.S. Senate will vote on insider trading
Published: Monday, January 30, 2012, 5:30 AM
By Mary Orndorff -- The Birmingham News

WASHINGTON - The U.S. Senate will vote today on legislation to clarify federal laws against insider trading by members of Congress, one of few ideas that currently has bipartisan support in both houses.

Bills have been pending in Congress for years but they hit the fast track after a book and corresponding national news report in November accused several members, including Rep. Spencer Bachus, R-Vestavia Hills, of using nonpublic information gleaned in the halls of Congress to guide their personal investment decisions.

President Barack Obama mentioned the issue in his State of the Union speech Tuesday night, and on Thursday night, Senate Majority Leader Harry Reid scheduled a procedural vote on the Senate version of the Stop Trading on Congressional Knowledge Act, or STOCK Act, for today.

~snip~
Supporters of the legislation, which are now many from both parties, say it's needed to clarify that existing laws against insider trading not only apply to members of Congress, but will also help prosecutors and regulators investigate and prosecute such cases. The Senate bill also includes a requirement that members of Congress disclose their personal financial information more often and in an electronically searchable format, as opposed to the once-a-year paper filings.

More:
http://blog.al.com/sweethome/2012/01/us_senate_will_vote_on_insider.html

[dotymed]

1. IF insider trading for Congress-people is outlawed, at least one

more legal stone will be removed from the wall that separates the 1% from the rest of us. I would expect them to do it illegally and possibly show what type of people most of them are.
Another point (among many) of contention is their unreasonable salaries. How can they be expected to represent (or even be aware of) their constituents complaints when their salaries immediately place them among the elite. I realize that what they are paid is a pittance compared to the very wealthy but their salaries insulate them from the majority of people they are supposed to "serve." Their mindset seems to be that we paupers should serve them. In most Democratic countries the government fears it's citizens. In America, the citizens fear their government. That is not a hallmark of Democracy.

[SammyWinstonJack]

5. Congresscritters set their salaries, right? Vote themselves a yrly pay raise, don't they?

Even while seniors weren't receiving a cola, congresscritters were giving themselves raises. Nice,eh?

[karynnj]

20. The problem is that cutting the salary would do the opposite from what you want

It is true that maybe half the Congress would not have a financial problem if you greatly lowered their salaries. The problem is the other half. As it is, they need to maintain a place to live near DC - as well as their home in the district. There are also travel costs that are - per some accounts - not covered completely if they want to be with family every week. This is why there are articles like one of 4 Senators/Congressmen sharing a house near DC. This is not exactly living the high life.

As it is, some may be sacrificing a higher income after expenses that they had before. If you lower it, that will be more common - and there may be good people who would have to not serve because it sacrifices too much - and impacts what they can do for their family. It won't impact the Senate millionaires at all.

[progressoid]

2. Rec.

[leftyohiolib]

3. its amazing that they were allowed to do this in the 1st place

do as i say not as i do

[chase48]

14. Fraud

since we are on this subject of insider trading, the SEC sent Martha Stewert to a federal pen for insider trading, a 100,000 dollar trade, but turn their back on Congress doing the same thing but big time because Congress oversees the SEC and they don't want to lose their jobs, you really need to read a book I just finished called "Throw Them All Out" by Peter Schweizer, this Okie can't wait untill Liz Warren arrives in the Senate, she ask's questions and make politicians sweat as Brown is right now, that is why a lot of Okies(she is a transplanted Okie)send her money as I do

[karynnj]

21. That book is poorly researched and has a RW agenda and is an attack piece

It is written by Sarah Palin's former National Security adviser.

Insider trading" is something monitored by the SEC and they oversee publicly traded companies. The rules specifically list the positions in companies that are subject to its provisions. As legislators are not included in this, it is true to say that they are not subject to insider trading rules.

That said, there are ethics rules in both the House and the Senate. They can investigate whether a legislator used his position for financial gain. Highly publicized recent examples include both the House and the Senate looking at Countrywide giving preferential loans to legislators, including Senators Dodd and Conrad. The same could be done for any REAL, provable insider trading or use of inside information. Here, the most obvious example would be positioning oneself to gain from a not yet public earmark that has been accepted in a bill. (Here's an example of Speaker Hastert - http://thinkprogress.org/politics/2006/06/15/5792/hastert-pictures-of-corruption/?mobile=nc )

Strengthening the ethics rules could more explicitly prohibit some unethical behavior, but the current wave of action is really more political than reality based. The sudden desire to act against this - though Louise Slaughter's bill has been pretty dormant since 2006 when it was first introduced was caused by Sarah Palin's "national security" adviser's book that 60 Minutes profiled in an explosive expose. The problem is that the research methods are simplistic and beyond that there are some pretty mindbogling "mistakes". Palin "wrote" an op-ed on insider trading for the WSJ and has spoken of Schweitzer as one of her posse.

Here is the method used. He looked at all committees a legislator was on and then looked at the legally mandated disclosures made. He then identified all transactions made that are for companies in the businesses that the legislator oversees. One example is that he labeled ANY purchase of any health care stock or fund in 2009 suspect for Senators on the Finance or HELP committee suspect - because apparently it was insider information that they were working on a health care bill. Then, to add more smoke to that fire, he found that a year later when the bill passed, the value of these stocks were way up. Ignored is the fact that the market itself rose about 59% from the bottom in 2009 to the spring of 2010. (In fact, they would have done better buying Tiffany in March 2009 - as it went up about 250% by April 2010) It should also be noted that he ignored if the transactions occurred in blind accounts or accounts managed by others.

As to the errors, the ones I saw in the excerpts in the media included saying that Kerry was chair of the Finance committee's subcommittee on health in 2003 and thus led the effort on the 2003 drug bill - so like with 2009, any healthcare stocks are suspicious. In fact, it was a Bush supported bill and the republicans controlled the Senate and the bill was written in the full Finance committee. Kerry was running for President speaking against the bill and voted against it. I doubt many here do not know the 2003 bill was not a Democratic bill. Another error - likely coming from having created the above "truth" was to then suggest that Kerry was on the Health committee (HELP) and could have been informed of any Bush HHS change in drugs covered. Kerry was not on Kennedy's committee and before arguing insider information it would seem prudent to actually determine if the HHS department notifies the House and/or Senate about routine executive functions - such as which drugs are covered. My guess - they don't - - thus the weasel word "could".

The Boston Globe looked at a more comprehensive analysis that showed that if you look at all transactions - instead of cherry picked ones - legislators do not do better than others. http://articles.boston.com/2011-12-14/bostonglobe/30516909_1_insider-suspicious-trades-portfolio

Here is a defense one Colorado Democrat, who had done everything anyone would have asked to avoid conflict of interest, but was still named by Palin's goon, wrote. http://www.denverpost.com/opinion/ci_19801816

In addition, there is something wrong when an analysis like that is made and the person intending to level serious charges at public officials that will damage their reputations and question their integrity, that NO effort was made to ask the accused for any response. In addition, publicly available information that diminishes the likelihood of culpability is ignored. That is true in the case of the Colorado legislator and in the case of John Kerry. (In Kerry's case all the transactions mentioned were made by the Heinz trust, that Teresa is one of many beneficiaries but not a trustee of - and that was clear on the Senate disclosure.) When the allegation came out, Kerry demanded a retraction - http://www.businessinsider.com/insider-trading-congress-john-kerry-retraction-peter-schweizer-2011-11 )

My guess is that Obama is attempting to head off in the pass what otherwise would be a Palin led attack in the 2012 election. Counterintuitive as it is, the republicans may see that further diminishing the historically low confidence in Congress is good for the anti-Government wing of the Republican party. Not to mention - it could make the ethics rules tighter which was one of the things Obama did as a Senator. Oddly, this might be the only regulation the republicans are for.

[no_hypocrisy]

4. Funny how bills like this one aren't attached to omnibus or highway or military funding bills.

[RC]

6. Even if they vote to include themselves,

There will be other unrelated bill somewhere, exempting themselves again from insider trading.

[rgbecker]

7. The Power of the Media.....

A short 20 minute segment on "60 Minutes" and bang....bill, vote, law.

[liberalmike27]

13. Imagine

If the media were to actually focus on our problems, and use "truth" all the time. Many like to blame just our representatives, but in truth the media is behind everything that goes on.

Who do you think profits from the vast amount of money flowing into politics? Who gets paid for all of those political commercials droning in thousands of networks all over the U.S.? Big Media! Who made the 2000 election close enough to steal? Big media.

Who do you think is behind slowing down liberal web-sites, PIPA, and SOPA bills? The media, who has lost power to the Internet, and wants the mind-control back. Hell if it wasn't for the Internet, we'd have never seen Olbermann,a and MSNBC develop, a slightly less con-servative network creeping back into the late-eighties, 1990's landscape of all-conservative, all the time.

Who got Bush elected, who got Reagan elected, who got conservative Clinton elected, yet called him and other fairly right-wing democrats "liberal" constantly? The media.

Jeez, I could go on--the tube is a brainwashing mechanism, and everything that comes through it should be analyzed for how you feel, and what motivation exists behind it. A lot should be rejected out-of-hand. But I suspect if this insider trading bill passes, to limit trading, it'll have a few thousand gallons of water added to it--like the banking bill--it will be reduced to near-ineffectual status.

[joeglow3]

8. This is bullshit if this passes

All those poor politicians invested millions into getting elected and now you want to steal the return on their investment?

[pscot]

9. if this passes

I'll believe it when the President signs it. Until then, it's just posturing for effect.

[Ruby the Liberal]

10. It will go into effect in 2020, and not retroactive

Gotta give the members a chance to update their financial plans, account for futures/options contract expiration dates and all outstanding bets on pending legislation.

[cyberpj]

11. Wow. Why? Do they even have to provide a reason for delayed implementation of a law passed today?

I'm so tired of all the games.
Nothing surprises me anymore but I'm so very tired of it being exposed and yet continuing.
I think I need a short DU break - feeling a bit overwhelmed by it all lately.
sigh.......................

[Ruby the Liberal]

12. I was projecting.

Sorry - that was just me, I didn't read that anywhere. Just my prediction of how this is going to go down.

[U of M Dem]

15. I am happy...

that the OWS rhetoric has begun to frame the political discourse, (evident within national news and even in the GOP debates). Occupy movement demands being addressed in our formal government should be considered a victory. We have to recognize the small victories, and avoid being discouraged if things do not work out right away, if we want the progress we all internally seek to come to fruition.

[Ruby the Liberal]

17. They don't even try to fit in anymore...

[uppityperson]

18. Seriously. It is sad.

[U of M Dem]

19. Yes it is sad,

we have a culture of wanting what isn't ours and taking what we want, which emanates from the top of our national power structure. To counter that culture, citizens must be vigilant in demanding democracy and an egalitarian method of decision making.

On edit, realized the subthread was about inane poster's hidden reply. I stand firmly behind the above post regardless.

[Marie Marie]

22. Even if this becomes law

proving Insider Trading with these slick bastards will be dicey. Then, prosecutions will be another matter.

[stockholmer]

23. Unfortunately,in the House:"the response has become a "witch hunt," as Rep. Carolyn McCarthy, D-N.Y.

said today."

snip

Rep. Judy Biggert, R-Ill., expressed concern that Congress may "overreact" to reports on congressional insider trading, while Rep. Emanuel Cleaver, D-Mo., said that he and others believe the current legislative solutions are "terribly, terribly flawed."

http://www.cbsnews.com/8301-503544_162-57337711-503544/stock-act-faces-skepticism-in-the-house/

[gateley]

24. Just now saw this -- DID they vote on this today? Thanks! nt

[Tx4obama]

25. Yes, the Senate voted for 'CLOTURE' 93-2

Link to the roll call vote: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=112&session=2&vote=00003

Lawrence O'Donnell did a segment regarding the STOCK Act this evening.

[gateley]

26. Boy, Tx4obama -- you're all over everything!

How do you keep up? My hat's off to you -- and thanks again!