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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

#221

Post by datavirtue »

ghaff wrote: post #170
datavirtue wrote: post #148

Earlier quoted context omitted.

I worked at a publicly traded company where everyone internal had knowledge of product releases with Apple. It was a trading frenzy with open discussion of trading decisions that predictably paid off. I remember it distinctly because it was right after company-wide training on insider trading with talks of prison time etc before our discounted stock grants. All it did was teach people how to conduct insider trading.…

While I don't know the specifics, product releases tend to have a whole lot less to do with stock movement than the details of financial performance. And during much of the last couple of decades it has been pretty hard for investments in Apple not to pay off.

Product release from a ragged-arse of a company that had no prior dealings with Apple nor any public information about a coming product with Apple? Insider trading. It's a fine line that most can easily convince themselves to cross.

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

#222

Post by rrrrrrrrrrrryan »

pc86 wrote: post #158
ckardat123 wrote: post #114

Earlier quoted context omitted.

I think that if there were a law in place that made it illegal for congressmen to trade, it would be easier to catch insider trading because they would be forced to trade by proxy like you mentioned. It's really hard to prove someone traded off of insider information if they make a decision to buy/sell for themselves. If they don't tell anyone else why they made the trade, you don't really have any proof that it was…

One thing I've always wondered about this is how to handle circumstantial evidence. Let's say you have a relative who may have insider information on a stock. You talk sometimes but not regularly. They call you (as they occasionally do) the day before you trade a stock and it performs favorably within a short time period. Are you now in a position where you have to prove a negative? Are there people in prison right n…

According to one of my finance professors in university, it's somewhat tough to actually get convicted for insider trading, and there are certain circles where everyone does it.

The people who do get convicted are usually those who were being particularly egregious or who pissed someone off enough to rat them out. For example, Martha Stewart got convicted because her assistant (whom she regularly called a "little shit") decided to testify against her.

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

#223

Post by _ea1k »

capital_guy wrote: post #10
_ea1k wrote: post #4

In practice, how would this work? A requirement that they only use index funds? But then wouldn't that bias them to support the companies that are the major movers in that index? Indexes are often heavily weighted to a small subset after all. TBH, it seems like an idea that sounds good on the surface but has practical issues in implementation that would make it irrelevant

This is a ridiculous take. Imperfect is better than bad. Right now you have the Speaker of the House's husband buying $5million worth of Alphabet call options. That's not a good system.

That just sounds like the politicians fallacy. We must do something, this is something, we must do it!

It is absolutely possible for a new imperfect system to be worse than the imperfect system that it replaces.

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

#224

Post by _ea1k »

ldoughty wrote: post #17
_ea1k wrote: post #4

In practice, how would this work? A requirement that they only use index funds? But then wouldn't that bias them to support the companies that are the major movers in that index? Indexes are often heavily weighted to a small subset after all. TBH, it seems like an idea that sounds good on the surface but has practical issues in implementation that would make it irrelevant

Blind trust would be the most logical solution. You can put $X into the trust, but you never know which companies that money is invested in. When you ask for $Y to be paid out, the manager of the fund sells what they see fit to fulfill the request without the client's involvement/input

Does this also work for interests in privately held companies, including the ones that said congress person may have had before being elected? Or that they may start while in office?

Or are we saying that a person in congress is not allowed to start a business?

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

#225

Post by _ea1k »

BurningFrog wrote: post #64
_ea1k wrote: post #4

In practice, how would this work? A requirement that they only use index funds? But then wouldn't that bias them to support the companies that are the major movers in that index? Indexes are often heavily weighted to a small subset after all. TBH, it seems like an idea that sounds good on the surface but has practical issues in implementation that would make it irrelevant

An incentive to make index funds go up is hard to distinguish from an incentive to make the US economy healthy.

It is when it comes at the expense of small business and new competitors, which are less likely to be in those indexes.

Want to compete with legacy auto? Want to compete with Google? Hmm, lets think of all the new regulations that you might have to meet. There are perverse incentives even in that system.

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

#226

Post by tivert »

mcpackieh wrote: post #175
pc86 wrote: post #166

Earlier quoted context omitted.

Nothing they said even remotely suggests they're against this type of background check, just that checking up on your wife's credit and social circle says nothing about whether you are a "bad apple" yourself.

It's a confusing comment because in one paragraph they say the practice doesn't weed out bad apples, but then in the subsequent paragraph they concede that it probably does. The only way to square these is if cops affiliated with organized crime aren't classified as bad apples, but that makes zero sense.

> The only way to square these is if cops affiliated with organized crime aren't classified as bad apples, but that makes zero sense.

I see how it was confusing, but what I was thinking was the nature of what is considered a "bad apple" has changed over time. I think police forces have been trying to prevent things like organized crime infiltration and corruption for a long time, while things like excessive use of force and racial bias have only started to be considered serious problem by them much more recently. Acting surprised about background checks seems like it's exclusively referring to the latter, while the process itself (e.g. getting friends' SSNs) seems mostly target at the former.

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

#227

Post by KingLancelot »

mikeyouse wrote: post #150
KingLancelot wrote: post #8

There is 0% reason Nancy Pelosi should be allowed to be one of the best traders in history, it’s nothing but corruption. Either lawmakers should not be allowed to own stock, or insider trading shouldn’t be a crime, though the latter option is a lot more abusable.

Have you considered that the meme about Pelosi being "the best trader in history" might be just a complete lie? I don't even disagree with the proposals to restrict trading in congress but it's kind of wild how credulously everyone is repeating these things..

[dead]

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

#228

Post by katbyte »

ghaff wrote: post #165
datavirtue wrote: post #136

Earlier quoted context omitted.

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

That basically devolves all the power to full-time congressional staffs because the representatives themselves would be even less educated on issues before them than they are today. (Though this is already close to being the case in some states that only have part-time legislators who are paid next to nothing.)

> representatives themselves would be even less educated on issues before them than they are today.

i dare say politicians are far from even the smallest bit educated on any issue as it is not what gets them votes, and even an amateur in any field or profession is likely more aware and educated then them. how many times do we hear about laws the pass about technology that clearly have no idea how said technology works?

perhapses having expects, scientists, and data be how we make choices would result in better outcomes then simply who is best at winning a popularity contest.

i recall a study done with high school class leaders where instead of voting they did something else and it resulted in better, more capable leadership, but i can't find it at the moment

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

#229

Post by roflyear »

tpxl wrote: post #124
roflyear wrote: post #72

Earlier quoted context omitted.

Honestly, congress salaries (not considering insider trading!!!) are really low. They're lower than many software dev salaries, and they generally have to have two homes (someplace to sleep in DC at least + their home in their district). I think if we raised salaries your sentiment could work, but good luck with that.

I'm sorry, 170k$ is a low salary?

It's a low salary for their responsibility, yeah. It is a good salary for the average person.

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

#230

Post by carlmr »

HWR_14 wrote: post #209
gjsman-1000 wrote: post #157

Earlier quoted context omitted.

For me, I'm not sure why there is a "Ms. Nancy Pelosi," and a "Nancy Pelosi," that both have trade activity. (Nancy Pelosi is interesting. She entered Congress worth about ~3-4 million. Now she is worth $100 million, give or take $20 million depending on the estimate. Interesting. I'm not saying it's Insider Trading, but the probability...)

Wow, Nancy Pelosi is interesting. She entered Congress 36 years ago. If she put $3MM in the S&P index when she joined Congress, and never touched it, it would be worth $108.66MM today. If anything, that's a clear argument she isn't insider trading. I always assumed she was a huge inside trader making a ton of money. Meanwhile, her husband is a VC, and probably makes a good deal of money for them as well.

>and never touched it,

Didn't she touch it though? A lot of people would be multimillionaires if they only put money in and never took money out.

The question is, with what she did invest, and the money she did take out, would she still be that wealthy.

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