Streams

It's Time to Ban Insider Trading in Congress

Tuesday, October 12, 2010 - 09:42 AM

Reshma Saujani

Congressman Brian Baird (D-WA) wants to introduce a bill that would ban insider trading by Congressional members and their staffs -- but other members of Congress are less excited about his proposal.

Insider trading laws that typically apply to corporations do not apply to members and their aides who are free to trade information and purchase stock based on non-public information.

Congressman Brian Baird and Congresswoman Louise Slaughter (D-NY) introduced the Stop Trading on Congressional Knowledge Act last year to stop elected officials from trading on inside information, but the legislation never made it out of the House Financial Services and the House Judiciary Committee. The bill which has been stalled for over five years would require officials to "to make their financial transactions public within 90 days of a purchase or sale" and "prohibit lawmakers from trading in financial markets based on nonpublic information they learn on the job."

So why doesn’t Congress want to practice what they preach? Well, because Congressional members stock portfolios outperform the average household by over 12 percent.

This insider trading should be made illegal. Congressional members and their staffs should not be allowed to use non-public information for their own pecuniary benefit.

Not only should the Stop Trading on Congressional Knowledge Act be passed, but a Congressional member and their aides should have to place all of his or her personal investments of stocks and bonds into publicly traded mutual funds or into a qualified blind trust as defined in section 102 of the Ethics in Government Act of 1978.

Reshma Saujani ran an unsuccessful campaign in the Democratic primary against Rep. Carolyn Maloney in New York's 14th district, which covers Manhattan and Western Queens. A community activist and a legal scholar, she is a graduate of the University of Illinois, received her Masters in Public Policy from the Kennedy School of Government at Harvard University and her JD from Yale Law School.

Tags:

More in:

The Morning Brief

Enter your email address and we’ll send you our top 5 stories every day, plus breaking news and weather.

Comments [3]

Sickened from San Diego

I don't know why anyone is even surprised that Government at ANY level from City Council persons to Federal Gov. Is corrupt beyond belief. No referendum, bill, law, etc will ever be passed that doesn't benefit THEM over US, ever. Want CHANGE? Well to bad you aren't getting any.

Dec. 31 2010 02:37 PM
Brian from Brooklyn

There's a serious problem with referendums. You cannot accurately vote on a nuanced issue. Its a yes/no proposition on long and detailed provisions. Half the time you do not know if voting yes is the way you want to vote because you can't make it out from the way its phrased.

You also start to get the problem that California has right now with its laws. The referenda can be politically manipulated. For example, requiring a two-thirds vote in the state legislature to increase taxes on anything. Such a requirement would completely eliminate a legislature's ability to raise taxes since republicans would never support them under any circumstances. Referenda can eviscerate a legislature's ability to do its job. You end up with a stalemate, with government unable to accomplish anything, e.g. California.

Oct. 13 2010 11:59 AM
Norton from Nutley, NJ

As long as the individuals making the rules that govern the legality of these same individual's actions; nothing is going to change.

This is why we as the people need to have the ability to help make the rules; that is referendums...

Oct. 13 2010 09:28 AM

Leave a Comment

Email addresses are required but never displayed.

Sponsored

About It's A Free Blog

Congress shall make no law respecting the establishment of a blog, or prohibiting the free exercise thereof.

Supported by

WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public.  Learn more at revsonfoundation.org.

Authors

Feeds

Supported by