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Watch this segment on 60 Minutes tonight
Source: CBSNews
The first segment is on how members of the House and Senate can use insider information to buy stock.
(CBS News) Martha Stewart went to jail for it. Hedge fund honcho Raj Rajaratnam was fined $92 million and will go to jail for years for it. But members of Congress can do the same thing -use non-public information to make stock trades -- and there's no law against it. Steve Kroft reports on how America's lawmakers can legally make tidy profits on information only they know, simply because they won't pass a law against themselves. The report will be broadcast on Sunday, Nov. 13 at 7 p.m. ET/PT.
Among the revelations in Kroft's report:
* Members of Congress have bought stock in companies while laws that could affect those companies were being debated in the House or Senate.
* At least one representative made significant stock purchases the day after he and other members of Congress attended a secret meeting in September 2008, where the Fed chair and the treasury secretary informed them of the imminent global economic meltdown. The meeting was so confidential that cell phones and other digital devices were confiscated before it began.
If senators and representatives are using non-public information to win in the market, it's all legal says Peter Schweizer, who works for the Hoover Institute, a conservative think tank. He has been examining these issues for some time and has written about them in a book, "Throw them All Out." "(Insider trading laws) apply to corporate executives, to Americans...If you are a member of Congress, those laws are deemed not to apply," he tells Kroft. "It's really the way the rules have been defined...have conveniently written them in such a way as they don't apply to themselves," says Schweizer.
CBS 60 Minutes exposed the insider trading going on within the halls of Congress.
A bill by Rep. Louise Slaughter, D-N.Y., called the Stop Trading on Congressional Knowledge Act, or STOCK (HR 1148 introduced March 17, 2011), would ban congressional insider trading. It had just nine sponsors until Tuesday, when ten more joined.
This is what the bill would do:
“…to prohibit purchase or sale of either securities, security-based swaps, or commodities for future delivery or swap by a person in possession of material nonpublic information regarding pending or prospective legislative action if the information was obtained: (1) knowingly from a Member or employee of Congress, (2) by reason of being a Member or employee of Congress, and (3) other federal employees. Amends the Code of Official Conduct of the Rules of the House of Representatives to prohibit certain House personnel from disclosing material nonpublic information relating to any pending or prospective legislative action relating to either securities of a publicly-traded company or a commodity if such personnel has reason to believe that the information will be used to buy or sell the securities or commodity based on such information.”
Last Action: Jun 1, 2011: House Judiciary: Referred to the Subcommittee on the Constitution.
The Subcommittee on the Constitution shall have jurisdiction over the following subject matters: constitutional amendments, constitutional rights, Federal civil rights, ethics in government, tort liability, including medical malpractice and product liability, legal reform generally, other appropriate matters as referred by the Chairman, and relevant oversight.
112th Congress Subcommittee on the Constitution
Mr. Franks, Chairman
Mr. Pence, Vice-Chairman
Mr. Chabot
Mr. Nadler
Mr. Forbes
Mr. Quigley
Mr. King
Mr. Conyers
Mr. Jordan
Mr. Scott
HR 1148, Stop Trading on Congressional Knowledge Act, would ban congressional insider trading. It had just nine cosponsors to begin with, now it is 92 cosponsors.
It's time for the gravy train to pull into the station and be scrapped.
Status: Dec. 6, 2011 - Hearing scheduled in the House Financial Services Committee
Bill to ban insider trading in Congress is suddenly popular: The bill has 127 co-sponsors, up from the nine from Nov. 12, the day before “60 Minutes” aired a piece highlighting investments that congressional leaders made in companies while legislative efforts were underway that may have affected stock values. The piece was based on “Throw Them All Out,” a book released last month by Hoover Institution fellow Peter Schweizer.
Cracks are beginning to show up in the inside trading structure. Lets keep this bill going.
Update:
Now 131 co-sponsors. A similar bill in 2009 had 10 co-sponsors. Maybe we'll get a vote on the bill this time.
Status: Dec. 6, 2011 - Hearing scheduled in the House Financial Services Committee
where is my post?
It's there. Right?
I submitted two post in this thread. One last night and another about an hour ago.
The last time this happened Suzi posted this note:
Misty, I went to the approval que and found two posts from you and one from Kim. I published them, but am still going to report it to John. The que is designed to catch spammers, and I didn't see anything in the posts that should have sent them there. Bear with us while we get all the bugs out of the new site.
Misty, I just looked an found two posts from you and published them. John, are ya listening? Grrrrrrrrrrr
Now, the STOCK bill has more than 180 sponsors and counting.
The new public focus on the issue is giving it unprecedented momentum, Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington adds. “Members who vote against it,” she says, “have a potential election ad against them that’s pretty easy to write – that members want to protect their privilege to trade on inside information.”
The Senate is preparing to vote on the STOCK Act, a bill to ban congressional insider trading. Watch live on C-SPAN: http://ow.ly/8Qi6n
The Senate bill passed 96 to 3.
Now the House takes up its own version.
This IS good news; however, it pains me that Congress must spend time and energy governing ITSELF!!!!
Good grief.
Who the hell were the 3?
The three senators who opposed the bill were Tom Coburn (R-Okla.), Richard Burr (R-N.C.) and Jeff Bingaman (D-N.M.). The two Republicans both argued that the measure was unnecessary and that the law already bars insider trading.
"Senator Burr voted against cloture on the bill because there are already laws in place to address this critical issue," said Burr spokesman David Ward. "Members of Congress are elected to serve the people, not make money for themselves, and any Member or staff member who breaks the already existing insider trading laws should be held responsible."
Bingaman added that the measure will pose problems for many federal workers. "I can't support a bill that places unreasonable and burdensome reporting requirements on over 300,000 federal workers," Bingaman said. "It is my hope that this legislation can be improved as the process moves forward." http://www.huffingtonpost.com/2012/02/02/stock-act-insider-trading-senate-passage_n_1251100.html
Well, I tried to answer this, but with some quotes and website link, I'm in the queue for moderator's approval...grrrr! The short answer is Coburn and Burr on the Republican side, as they state it's already law, and Democrat Bingaman who's concerned about problems it may create for federal workers.
House has passed a bill to ban members of Congress and executive branch officials from insider trading... 417-2
my post did not go through
Sorry about that. Fixed. Please email me if somehow your stuff gets stuck again! john@republicansforobama.org
I think there's some kind of hex on this post as so many responses seem to have difficulties getting through.