It has been a difficult start for the financial services sector thus far in
2009 – yet it may be even more difficult to excuse the multitude of bad
decisions made by Wall Street already (refusing to release information about
bailout spending, Bank of America's $10 million super bowl ads,
obscenely large bonuses for AIG executives…the list goes
on). Thankfully, it looks like Congress and the federal government are
finally getting more serious about oversight of Wall Street and the
Now also would be a good time to put an end to secret spending and insider
trading immunity for government officials.
A recent piece of legislation proposes to do just that. Introduced by
Reps. Brian Baird (D-Wash.), Louise McIntosh Slaughter (D-NY) and Tim Walz
(D-Minn.), the “Stop Trading on Congressional Knowledge Act” (H.R. 682) would
ensure that those with access to privileged "non-public information"
gathered through oversight proceedings would not be able to use that
information for personal benefit in securities and commodities trading.
Specifically, H.R. 682 would negate a little-known loophole in the law which
could allow members of Congress as well as executive staffers and government
officials to practice insider trading in order to enrich themselves as
well as their associates. Of course, this type of insider trading would be wholly
illegal for citizens like you and me.
The act would also be effective in combating corrupt lobbying practices, since lobbyists and stock traders ("political intelligence
consultants") who haunt the halls of Congress precisely in order to glean
insider tips from staff would also be banned from insider trading.
The legislation would require members of Congress and their staff to
disclose stock transactions of $1,000 or more within 90 days, and require
“political intelligence consultants” to register under the Lobbying Disclosure
Act and disclose their financial activities.
The time to pass this legislation is now, before our tax dollars pay
for any more lucrative insider investments.
Posted by Craig Holman