Insider Trading Is Legal For Members Of Congress – And They Refuse To Pass A Law That Would Change That
by ilene - October 21st, 2010 3:21 am
Insider Trading Is Legal For Members Of Congress – And They Refuse To Pass A Law That Would Change That
Courtesy of Michael Snyder at The American Dream
Is insider trading wrong? Most Americans would say that it is. In fact, some very wealthy and very prominent Americans (including Martha Stewart) have gone to prison for it. It just is not right for those with inside information that is not generally available to the public to make huge profits in the stock market by making key trades based on that information.
But there is one group, members of the U.S. Congress, that can do all the insider trading they want and get away with it. That is because insider trading is perfectly legal for members of Congress. Yes, you read that correctly. So how would that work? Well, for example, a member of Congress may know that a law that is about to be proposed would have a very positive effect on a particular company and could buy up a ton of stock in that company a few days before that law is introduced. Isn’t that wrong? Of course. Is there any law against it? Not at all.
You would think that some of the more ethical members of Congress would want to close this glaring loophole, but it just isn’t happening. Legislation has been introduced from time to time that would end this practice, but it has gotten very, very little support. The Wall Street Journal recently published an article about this issue which described the current situation this way….
"A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006."
But even though insider trading is legal for members of…