Another congressional perk – insider trading info
Wouldn’t it be nice to know when something was about to happen that would affect the price of a stock? You could buy up a bunch of shares and make a killing. Well, that’s illegal (insider trading) – except if you work for congress, that is. (story here from the WSJ)
Chris Miller nearly doubled his $3,500 stock investment in a renewable-energy firm in 2008. It was a perfectly legal bet, but he’s no ordinary investor.Mr. Miller is the top energy-policy adviser to Nevada Democrat and Senate Majority Leader Harry Reid, who helped pass legislation that wound up benefiting the firm.
Jim Manley, a spokesman for Mr. Reid’s office, initially defended Mr. Miller’s purchase of shares in the company, Energy Conversion Devices Inc. He said the aide had no influence over tax incentives for renewable-energy firms, and that other factors boosted the stock.
But on Sunday, Mr. Manley added: “Mr. Miller showed poor judgment and Senator Reid has made it very clear to Chris and all his staff that their actions must not only follow the law, but must meet the higher standards the public has a right to expect from elected officials and their staffs.”
Mr. Miller isn’t the only Congressional staffer making such stock bets. At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009.
The aides identified by the Journal say they didn’t profit by making trades based on any information gathered in the halls of Congress. Even if they had done so, it would be legal, because insider-trading laws don’t apply to Congress.
Nice. But insider trading laws apply to everyone else and the penalties can be substantial. While there has been proposed legislation since 2006 to prevent insider trading, congress has shown little interest in moving it forward. Why am I not surprised? After all, laws are for the little people.
Remember this in November…