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Many believe it's time to do away with lawmakers making stock trades

npr.org

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Re: Many believe it's time to do away with lawmakers making stock trades

#11

Post by camjohnson26 »

Particularly bad violations have been the Fed presidents making multimillion dollar trades with personal accounts, and Nancy Pelosi’s husband apparently directly trading on privileged information.

https://www.cnbc.com/2021/09/16/fed-chief-powell-orders-ethi...

https://fortune.com/2021/07/08/house-speaker-nancy-pelosi-hu...

Re: Many believe it's time to do away with lawmakers making stock trades

#14

Post by throwaway894345 »

pwillia7 wrote: post #4
ravedave5 wrote: post #2

There are so many loop holes. I mean then they just make a company that does stock trades for them and tell that company what to trade. Or their spouse does the trades instead of them.

*purposeful loopholes

I don’t think it’s “purposeful” as much as the fact that the fundamental fungibility of money makes it very hard to write legislation that covers a reasonable amount of loopholes. Or rather, while purposeful loopholes could exist, it’s very hard to prevent legislators trading stocks even if there were no deliberate loopholes.

Re: Many believe it's time to do away with lawmakers making stock trades

#16

Post by harryh »

kory wrote: post #5

Banning stock trading for lawmakers in any form will even moreso restrict these positions to very wealthy people. If you’re worth several million, stock trading restrictions don’t change much. If you aren’t, they could be a big deciding factor in the quality of your housing or retirement.

I don't think anyone is talking about banning lawmakers from investing in broad market indexes and the like. They're talking about banning buying and selling individual stocks because that opens the door to trading on non-public information they receive as government officials.

For the vast majority of people this kind of passive index based investing is actually what will lead to the best returns overall. So I don't think your conclusion that this sort of change would restrict public office to very wealthy people is correct.

Re: Many believe it's time to do away with lawmakers making stock trades

#17

Post by toomuchtodo »

Traubenfuchs wrote: post #3

And their partners, parents, children, friends? This problem looks unsolvable to me.

I work in financial services (mostly) as a consultant. All of my trades, and those of my partner, are monitored. The SEC has a data science team (Market Abuse Unit's Analysis and Detection Center) that specifically looks for insider trading using market data and generates leads for their enforcement division. The goal is to not "solve", but to disincentivize the casual offender and punish harshly the determined when detected.

Humorously, my trades and capital market activities are more regulated than Congressional representatives who have direct access to MNPI (material non public information), which I do not have access to. As this NPR piece alludes to, we should fix that.

Re: Many believe it's time to do away with lawmakers making stock trades

#20

Post by mschuster91 »

Apocryphon wrote: post #12
Traubenfuchs wrote: post #3

And their partners, parents, children, friends? This problem looks unsolvable to me.

They prevent the family of employees of companies that host contests and sweepstakes from participating, don’t they?

That's more a "we're free to claw back the prize if we discover you ignored it" rule than anything else effective.
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