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Unusual Stock Trading by Whales in US Congress

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Re: Unusual Stock Trading by Whales in US Congress

#101

Post by yumraj »

sakopov wrote: post #15

> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…

I'm curious if any of this falls under the definition of insider trading. It should, but I think it doesn't and which is why SEC doesn't get involved in these.

Does anyone know?

Re: Unusual Stock Trading by Whales in US Congress

#102

Post by dmoy »

intrepidhero wrote: post #75
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

If you think insider trading occurred, its already illegal and should be reported to the Office of Congressional Ethics. ( https://oce.house.gov/learn/citizen-s-guide ) I'm frankly disturbed that this kind of specific trading by people in power is going on at all. Salaried federal employees above a certain level are strongly encouraged to invest only in generic mutual funds to avoid even the appearance of conflict of…

> When I look at the above trades I'm not sure whether anything technically illegal occurred but I'd support making all specific trading illegal to avoid even the appearance of unethical behavior.

That sounds like an excellent idea to me. While in office, can only trade TSP funds, or their rough equivalents outside of TSP. If you wanna sell something that isn't a giant index fund? Do it before you take office.

Then I'd further support that all trading would have to be done via a 10b5-1 plan, with a blackout window of at least 6 months.

Re: Unusual Stock Trading by Whales in US Congress

#103

Post by Kranar »

munk-a wrote: post #77
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

We elect people who actually believe in governance instead of people out to make a buck. I know that everyone's going to act in their own interest (that's sorta how interests are defined) but some people feel a legitimate duty and loyalty to country and welfare above their own personal comfort - these people tend to be torpedoed very early on in US politics because they refuse to cozy up to special interests to play…

Meh, a lot of the people you're describing are incredibly incompetent and succumb to simplistic ideologies. Over the long run they end up in the same position that everyone we're complaining about ends up in.

While not entirely related, I remember a study by the U.S. military during the Vietnam war that said the worst performing soldiers were the ones who were patriotic and served due to a sense of duty. I'm simplifying here but the idea was that those were often the first people to feel a sense of entitlement and feel as if because they had good intentions that they were "owed" something.

Belief in governance is cheap and doesn't do much to solve anything. Competency, skills, leadership, those are qualities that result in change... having a good heart and believing in or trying to execute various altruistic ideologies is basically a loser's game.

Re: Unusual Stock Trading by Whales in US Congress

#104

Post by dlp211 »

nickthemagicman wrote: post #93
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

It's impossible. Who watches the watchmen? And Democratic party believes that bigger gov't is the solution to many of our problems.

Show me a country with little government that is successful.

Re: Unusual Stock Trading by Whales in US Congress

#105

Post by AtlasBarfed »

mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

"No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?"

Well, those people profiting off of it would have to vote against each other's interests.

Money wins elections. Not issues, which are just window dressing. The media cartels own your attention for all your waking ours and, as MiB said, while individuals are rational and sensible, people (that is, the voting electorate) are easily scared, easily duped, and increasingly easily controlled.

So it's not just "vote against being rich", it's also "vote to lose the next election".

Re: Unusual Stock Trading by Whales in US Congress

#106

Post by freeone3000 »

yumraj wrote: post #101
sakopov wrote: post #15

> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…

I'm curious if any of this falls under the definition of insider trading . It should, but I think it doesn't and which is why SEC doesn't get involved in these. Does anyone know?

For a long time, Congress had an exemption to insider trading. They no longer do, but, insider trading still requires material non-public information about the company in question -- and Congressional acts are the most public thing possible. Betting that a company's stock will go up (or down) and then making it happen after you make the bet isn't insider trading, it's activist investing, and is totally legal.

Re: Unusual Stock Trading by Whales in US Congress

#107

Post by wpietri »

sethammons wrote: post #67
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

my naive solution: politicians become monks. They go without. They are provided modest housing and budgets. I'm sure there are zounds of issues with it, but I like to imagine servant leaders who go without to do more for the communities they serve.

I'd be happy with that, but perhaps an easier solution is to make them moderately wealthy. Pay them a top 5% salary with a guaranteed pension for life, plus mandatory open finances for life. Then there's much less incentive to resort to graft.

Re: Unusual Stock Trading by Whales in US Congress

#108

Post by JumpCrisscross »

giantg2 wrote: post #91
fighterpilot wrote: post #81

Earlier quoted context omitted.

There will almost always be plausible deniability. Needs to be banned.

I think the insider trading laws don't require motive - just that they had private information or used their position of influence and that they benefited from a related trade. The rules for executives at companies usually requires them to file any trade plans related to their company stock prior to actually making the trade, which would at least prevent the short term plays like the Pelosi example. Even tech people…

Stupid insider trading, where someone gets a tip and then trades on it, is well enforced. It's easy to catch ex post facto and the people doing it are generally of the mind that everyone is insider trading and so they're unlikely to get caught.

The problem is in the grey areas. Take the Pelosi example. The material nonpublic information was her personal policy position. Assuming she acted purely venally, are your own intentions insider information? If I know I'm going to get Chipotle for lunch tomorrow, is it insider trading to buy Chipotle shares?

If, on the other hand, her husband took a conversation he had with her about policy and then traded on it, that would be insider trading. Unless they did it over text message, however, the odds of proving it are zilch.

Re: Unusual Stock Trading by Whales in US Congress

#109

Post by skohan »

giantg2 wrote: post #60
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

"The very people whose job it should be to stop this sort of thing are the ones who are profiting from it." Welcome to the system. This is pervasive in many other aspects as well (court, police, DA, etc).

Checks and balances are supposed to address this issue. I think the only one which really does the job here would be the right to initiative/referendum. That or an electoral solution, but that one's really hard since new legislators will be incentivized to maintain the status quo. You would almost need a new party defined around that one issue, which is hard to imagine in the US.

Maybe an executive order could also prohibit this? I'm not sure.

Re: Unusual Stock Trading by Whales in US Congress

#110

Post by partiallypro »

munk-a wrote: post #77
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

We elect people who actually believe in governance instead of people out to make a buck. I know that everyone's going to act in their own interest (that's sorta how interests are defined) but some people feel a legitimate duty and loyalty to country and welfare above their own personal comfort - these people tend to be torpedoed very early on in US politics because they refuse to cozy up to special interests to play…

AOC has been silent on Democrats doing similar, which make it seem like she doesn't really care.
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