And their partners, parents, children, friends? This problem looks unsolvable to me.
This is the case in banks, and where I work they're also not allowed to trade single stocks - funds, etfs etc only. If banks can manage, so can politicians.
Many believe it's time to do away with lawmakers making stock trades
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Re: Many believe it's time to do away with lawmakers making stock trades
#32There 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.
"Make a company"? You mean they would own it? That's obviously the same thing. That would be as illegal as owning any other stock.
Spouses trading is as simple to monitor as it is for all other insider trading.
But more importantly: if there was a ban, or even a recommendation against it, and the media did its job, then being caught making peronal financial gain from your political office would make you unelectable. The strange thing about US politics is that it's not just accepted but expected. This is the cultural change that's needed.
Whether or not there are legal loopholes shouldn't matter so much. Politicians are scrutinized by media and judged by the public. Courts aren't even required.
Re: Many believe it's time to do away with lawmakers making stock trades
#33And 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…
Where I work, people in the front office can't trade in single stocks either. Funds only.
Re: Many believe it's time to do away with lawmakers making stock trades
#34Honestly, pay them more. In every major country, if they're running orgs that have multi-hundred-billion-dollar budgets per year, and you have a few hundred of these people, you can pay them well-enough that sneaking around isn't really profitable. It would not be unreasonable to allocate 0.1% of your budget to compensating the people who control the budget, in exchange for them abandoning their conflict-of-interest…
I'm not sure their greed can ever be satisfied.
How about electing people with a functioning moral compass instead of these muppets clearly only looking out for themselves. Oh wait, that's not possible, then you'd have to vote "for the other side" every now and then.
Re: Many believe it's time to do away with lawmakers making stock trades
#35It's the most blatant example of insider trading. Company insiders might have inside access to a single company. Lawmakers have access to inside information that can affect the entire industry or market.
It's a perfect example of how we do have class stratification in society and that rule of law and equality are laughably distant ideas in a sea of hypocrisy.
Re: Many believe it's time to do away with lawmakers making stock trades
#36Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) I would prefer a public registry listing all congressional trades. I know this is legally available data, but very difficult to access.
> Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) >I would prefer a public registry listing all congressional trades Wouldn't your proposal obscure congressional trading as well, because they want to preserve their alpha by not publishing their trades?
Well they only publish trades ~30 days later. There's no real chance of front-running a politician and for all you know they could've closed their position before the 30 day period ended. Plus, if people follow them into the trade (i.e. people buy because Pelosi bought) that only moves the price in the politician's favor. It's not like politicians are running crazy strategies that you can figure out from their trades, so I can't really imagine it creating any incentive to hide trades
Re: Many believe it's time to do away with lawmakers making stock trades
#37Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) I would prefer a public registry listing all congressional trades. I know this is legally available data, but very difficult to access.
> Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) >I would prefer a public registry listing all congressional trades Wouldn't your proposal obscure congressional trading as well, because they want to preserve their alpha by not publishing their trades?
Once their trades are done, publishing them should only increase their alpha. I mean, Buffet's purchases can move the price before he's done buying stock, but congresspeople don't move that much cash.
Re: Many believe it's time to do away with lawmakers making stock trades
#38Particularly 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...
It's widespread, republicans seem to be doing it more though https://www.nytimes.com/2020/12/02/us/politics/david-perdue-... https://www.cnbc.com/2021/01/19/doj-will-not-charge-sen-rich... https://www.washingtonpost.com/politics/2021/08/11/rand-paul... https://tulsaworld.com/news/u-s-sen-jim-inhofe-responds-afte...
They are just reported on more. This problem is party agnostic.
Re: Many believe it's time to do away with lawmakers making stock trades
#39Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) I would prefer a public registry listing all congressional trades. I know this is legally available data, but very difficult to access.
> Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) >I would prefer a public registry listing all congressional trades Wouldn't your proposal obscure congressional trading as well, because they want to preserve their alpha by not publishing their trades?
No, it would be the opposite. If people think they have access to privileged information then they will follow their trades, making them profitable even if they are bad trades.
First movers always win.
Re: Many believe it's time to do away with lawmakers making stock trades
#40100%. Didn't politicians make a ton of privileged stock bets when they knew COVID was coming here?