Insider Trading? No Problem for Congressional Aides

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According to The Wall Street Journal, during 2008 and 2009, at least 72 Congressional staffers on both sides of the isle, profited from insider trading on companies that their bosses helped oversee. Surprisingly, insider-trading laws, so vigorously prosecuted by the government, do not apply to Congress.

In 2008, top energy advisor to Senate Majority Leader Harry Reid, Chris Miller, made a risky bet on Energy Conversion Device, Inc. shortly before Reid helped pass legislation that helped the firm. Miller’s $3,500 bet nearly doubled over a six month period, while the overall stock market was in a nosedive.

In another instance, an aide to House speaker Nancy Pelosi profited from trading shares in both Freddie Mac and Fannie Mae in a brokerage account with her husband, just days before the government authorized emergency funding for the companies.

Legislation was proposed in 2006 to prevent members of Congress and their aides from investing in public companies in which they had non-public information about actions which might benefit those companies. According to leading backer of the STOCK Act, “Stop Trading on Congressional Knowledge”, Rep. Louise Slaughter (D., N.Y.) claims that the current bill has only nine lawmakers supporting it, and no companion bill exists in the Senate.

The Wall Street Journal

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