Posts Tagged ‘trading on non-public information’

Do Lawmakers Legally Insider Trade?

Do Lawmakers Legally Insider Trade?

Courtesy of Damien Hoffman at Wall St. Cheat Sheet 


Lawmakers possess many perks. However, legal insider trading may be the biggest fringe benefit of all.

A study* released by Professor Alan Ziobrowski at Georgia State University concluded legislators in Congress make “significant abnormal returns.” Moreover, active traders outperform corporate executives. “We have every reason to believe they are trading on information that the rest of us don’t have,” reports Ziobrowski.

How the hell is this bullshit going on? Craig Holman at consumer watchdog organization Public Citizen notes, “The Securities and Exchange Act does not apply to members of Congress, congressional staff, or even lobbyists.” Outraged?

If you are a voting citizen, your public representatives can legally trade investment vehicles based on information received at work. And much information is gleaned long before trickling down to the good ‘ole People. Thus, as you already deduced, a major conflict of interest exists when your political representative must choose between your needs and those of his/her portfolio.

This is another example of the cosmic irony in which Wall Street is overseen by Washington yet no one is overseeing DC. During my interview with Congressman Alan Grayson he explained the importance of auditing the Federal Reserve. While we’re making a list and checking it twice, let’s get lawmaker insider trading into the “Must Do Now” column.

* The study used hundreds of personal financial disclosures and more than 6000 stock transactions by members of Congress going back up to 15 years.justice

(Source: American Public Media.)

Note: Wall St. Cheat Sheet is offering a FREE 14-day, no risk trial of our Premium Newsletter - just click here. 


This issue Damien raises came up here before, back in July, I wrote:

Insider trading is illegal, but the definition of insider trading is not inclusive enough. Government employees, buying and selling on non-public information, clearly violates the spirit of insider trading laws, but till now has been overlooked.

Bill Aims to Prevent Use of Insider Financial Information by Federal Workers

With the federal government increasingly involved in the financial affairs of private companies, a pair of lawmakers has proposed prohibiting members of Congress and other federal employees from trading stocks

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Reich Takes On Alan Simpson - And We Do The Fact Checking

By Advisor Perspectives. Originally published at ValueWalk.

Robert Reich, a prominent Democrat, and Alan Simpson, a distinguished Republican, engaged in a friendly debate to discuss issues that they said were not addressed during this campaign season. But on crucial subjects, both relied on out-of-date and inaccurate reasoning.

Image source: Wikimedia CommonsAlan Simpson

The debate, which took place yesterday, was a keynote presentation at the Schwab IMPACT conference, held in San Diego. It is the largest conference in the industry, attracting approximately 2,000 advisor attendees.

Reich is a political commentator, economist, professor and author. He served in the administrations of Presidents Gerald Ford and Jimmy Carter, and was Secretary of Labor under President Bill Clinton fro...

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Kimble Charting Solutions

London- 4th attempt to breakout in 16-years, results different this time?

Courtesy of Chris Kimble.

Four months ago the world seemed scared that the Brexit vote would be negative for Europe and potentially around the world. Four months later, almost the polar opposite deserves discussion.

Below updates the FTSE -100 Index on a monthly basis over the past few decades.


FTSE Index is now testing a resistance zone for the 4th time in the past 16-years at (1), as well as testing the underside of line (3) at the same time.

Monthly MACD has created a series of ...

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Zero Hedge

Bonds Are Signaling BIG Trouble is Ahead

Courtesy of ZeroHedge. View original post here.

For anyone who wants to make money in the markets, you need to understand one thing.

Bonds are the “smart money.”

This doesn’t mean that stock investors are dumb. It means that the bond markets are much larger and much more liquid than the stock markets.

Because of this, bond markets are the FIRST to adjust to new realities.

Consider the recent market bottom.

Bonds (TLT) bottomed in November 2015. Stocks (SPY) bottomed in February 2016.

Well, right now, bonds are selling off… HARD.

Stocks are on borrowed time. Smart investors are al...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Oil Companies Shift Exploration Tactics, Curb Spending (The Wall Street Journal)

In June, oil giant BP PLC announced what it deemed an “important” new discovery in Egypt.

It turned out to be a modest natural-gas find that didn’t even rank in the top 50 discoveries since 2012.

Gundlach Says ‘Look Out’ for...

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Phil's Favorites

Now it's an avalanche


Picture via Pixabay

Courtesy of Joshua Brown, The Reformed Broker

Reuters on the last week’s fund flows:

Mutual fund investors flooded stockpickers with redemption orders during the latest week, cashing out the most money in five years, Investment Company Institute data showed on Wednesday.

The investors pulled $16.9 billion from stock mutual funds in the seven days through Oct. 19, more than in any other week since August 2011, the trade group’s data showed.

By contrast, stock exchange-traded funds took in $2.4 billion. ETFs most...

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Digital Currencies

Bitcoin Soars As China Launches Crackdown On Wealth-Management Products

Courtesy of ZeroHedge. View original post here.

After trading in a tight range for much of the summer, coiled within a $100 range around the mid-$500s, over the past several weeks bitcoin has once again started to push higher, closely tracking the decline in the Chinese Yuan as shown below.

However, the most recent burst in bitcoin activity, which sent it surging by over $20 overnight, has little to do with any moves in the official Chinese currency, which recently...

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Members' Corner


Courtesy of Nattering Naybob.


Discussion of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Rising Libor and Bond Yields
  • Negative Swap Spreads, Eurodollar Curve, Repo Effects
  • Compliance, Expectations, Liquidity, Fed Action

Last Time Out

"25-54 yr old prime earners peaking at 101083 in Nov 2007; today at 97628, for a net decline of 3.5M prime earning jobs during this "recovery". No real jobs, just McJobs for McPay."

"Above note, 55yrs+ in Nov 2007 at 26376, now at 34353, for a net increase of 8 million employed. Not for sheer enjoyment and mostly out of economic necessity. The above attests to no real jobs, just McJobs for McPay and work till you die?" - 08...

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Chart School

Tech Hold Breakout,.but S&P Wedge Bound

Courtesy of Declan.

It was a mixed day for indices. Large Caps remain bound by wedge support/resistance, but Tech broke upside yesterday from similar wedges and held those breakout today.

There was little change for the S&P over the last couple of days. The one technical change was the MACD trigger 'buy' as other technicals stayed on the bearish side.

Meanwhile, the Nasdaq cleared wedge resistance yesterday, and was able to hang on to the breakout despite today's loss. It too enjoyed a MACD trigger 'buy', but had an On-Bal...

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Swing trading portfolio - week of October 24th,2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

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