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Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

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Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#131

Post by dudul »

BurningFrog wrote: post #47
_lb0d wrote: post #14

My wife works in the audit department of a bank. I'm heavily regulated by the SEC on what stocks, ETFs, mutual funds I can buy/sell. An internal group monitors my buying/selling and makes approval/denial before I can do so. I have to hold an ETF for 1 month before I can sell it--not that I should be swing trading ETFs, but still. It's very frustrating at times, especially when I'm relegated to using just her bank's t…

I can't think of any other situation when one person getting a job puts legal obligations on their spouse, but I haven't looked into it.

Really? I work in the gambling industry and nobody in my household is allowed to gamble/bet online just because of that.

When I worked in finance, myself and my wife also had a lot of restrictions in regards to our investments.

Anyways, these are just a few examples, but there are a lot of domains of activity where restrictions extend not only to the direct employee but also to their spouse or direct family.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#132

Post by toast0 »

BurningFrog wrote: post #47
_lb0d wrote: post #14

My wife works in the audit department of a bank. I'm heavily regulated by the SEC on what stocks, ETFs, mutual funds I can buy/sell. An internal group monitors my buying/selling and makes approval/denial before I can do so. I have to hold an ETF for 1 month before I can sell it--not that I should be swing trading ETFs, but still. It's very frustrating at times, especially when I'm relegated to using just her bank's t…

I can't think of any other situation when one person getting a job puts legal obligations on their spouse, but I haven't looked into it.

My spouse was an elected official in California, which came with reporting requirements for stock transactions and gifts for both of us[1] But then, in a community property state, we don't have separate stock transactions and gifts, valued economically, aren't usually seperable either (there's exceptions or at least higher gift limits from family gifts, which are likely sources for seperable gifts)

For us, it was easier to avoid making stock transactions that triggered reporting and avoid accepting gifts that would trigger reporting, than to fill out the reports. I had equity based compensation that had to be reported, but then everything else went into diversified mutual funds, which is a good idea anyway.

[1] See CA form 700. But note, this doesn't apply to federal elected officials from CA, only to state and local officials.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#134

Post by ng12 »

ed_balls wrote: post #99
ckardat123 wrote: post #39

I started building out tools to track congressional stock trading in 2020. Since then, I believe there have been 9 other proposals similar to this one. None of them have been even called to a vote. It seem like Congress is pretty unwilling to regulate its own trading. Until they are, feel free to track the trading here: https://www.quiverquant.com/congresstrading/

TBH will the regulation change much? If congressmen won't be allow to own stock, they will use proxy (wife, siblings, parents, in-laws).

SEC regulations generally apply equally to family members you make financial decisions for. You can still probably get away with it but the SEC has ammo if you get brazen.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#135

Post by nashashmi »

ckardat123 wrote: post #39

I started building out tools to track congressional stock trading in 2020. Since then, I believe there have been 9 other proposals similar to this one. None of them have been even called to a vote. It seem like Congress is pretty unwilling to regulate its own trading. Until they are, feel free to track the trading here: https://www.quiverquant.com/congresstrading/

The rules on Congressman trading should be coming from their districts and states that they represent. it could possibly hurt the quality of congressmen and senators that run for election if this rule is implemented at a federal level.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#136

Post by datavirtue »

vinceguidry wrote: post #71
ksec wrote: post #58

Earlier quoted context omitted.

Not just in banking industry but many other Finance or Legal industry as well. Pretty much standard practice.

Why would this solve the problem? They're still incentivized to make decisions on behalf of the nation in their own financial interests. The conflict of interest in the financial industry is with the companies they work with and for. For lawmakers it's with the whole country. They should absolutely not be allowed to benefit personally from legislating.

I wish we just called people up like we do for jury duty.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#137

Post by ckardat123 »

thrtythreeforty wrote: post #79
aketchum wrote: post #70

Earlier quoted context omitted.

I think there is a delay on stock disclosures, like they only have to disclose purchase/sale once a quarter or something which makes it hard to profitably copy their trading.

But it could be backtested, which I think is the point - "is the supposed insider trading actually profitable for Congress members?"

You can see the backtest performance of some of some strategies built around congressional trading data here: https://www.quiverquant.com/strategies/

The holdings and advanced metrics are behind a paywall (apologies in advance).

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#138

Post by BurningFrog »

amalcon wrote: post #76
BurningFrog wrote: post #47

Earlier quoted context omitted.

I can't think of any other situation when one person getting a job puts legal obligations on their spouse, but I haven't looked into it.

Your spouse can definitely affect your ability to get a security clearance. Last I heard, cannabis use is still relevant to this, even if you live in a state where it's legal. Your spouse being a foreign national can also be significant, depending on which country and their connections there. It's not really a legal obligation as such ("only" putting the job at risk), but it does cover rather a lot of jobs.

That doesn't put any legal obligation on the spouse though.

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#139

Post by guerrilla »

rsynnott wrote: post #116

This seems completely reasonable; it's arguably surprising it hasn't been done before. The devil will be in the details; in particular it would likely have to extend to spouses.

How is that surprising? It's super obvious why it hasn't been done before...

Re: Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock

#140

Post by spacemadness »

neilv wrote: post #50

I would love for all lawmakers to be limited to market index investing. Say, asset allocation (other than their home and a Washington pied a terre) of 50% US stocks index, 20% non-US stocks index, 30% US bonds index. No stock-picking. No sector-picking. No real estate other than through the indexes. No private company ownership. No trusts. No circumvention. Alignment with ordinary people's retirement funds seems grea…

They’ll get around it somehow. It might just be an extra step for them to do hidden trades through extended family or some such.
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