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Insider Trading Is Perfectly Legal – But Only For Members Of The U.S. Congress

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Did you know that insider trading is perfectly legal in the United States?  Well, not for 99.9% of the population.  It is actually only a very small percentage of the population that can legally indulge in insider trading – the members of the United States Congress.  In fact, a law that would ban insider trading by members of Congress has been stalled for years on Capitol Hill.  So why wouldn’t lawmakers in Washington D.C. want to apply the same rules to themselves that apply to the rest of us?  After all, how are we supposed to respect the integrity of those “serving” in Congress when they are playing by an entirely different set of rules?  The American people aren’t stupid.  They can see what is going on.  The truth is that there is a reason why approval ratings for Congress are at an all-time low.

The sad thing is that this issue has gotten very little attention in the mainstream media.  Nobody seems really that upset about it.  But it is a travesty that our lawmakers can legally make trades in the open market based on inside information that they have gained by being in positions of authority.  As the Wall Street Journal recently explained, they can generally make all the money they want off of insider information without any fear of prosecution because “insider-trading laws generally do not apply to lawmakers, leaving them free to trade on nonpublic information.”

But members of the U.S. Congress are generally in a greater position to influence the fortunes of individual companies than almost anyone else.  For example, certain members of the U.S. Congress may know that certain legislation is going to be introduced that would have a dramatic impact on the economic fortunes of a particular industry or corporation.  What would stop those members of Congress from making very profitable trades in the marketplace based on that information?

Nothing.  Nothing at all.

So, is there any evidence that members of Congress have been involved in this sort of activity?

Well, there is at least one study that seems to indicate that members of the U.S. Congress have been much more successful in the stock market than members of the general public….

A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.

Of course Congress could stop all of this by simply passing a law that bans insider trading by our lawmakers.

But they refuse to do it.

Instead, it is likely that our “leaders” will continue to make millions of dollars by betting against the U.S. economy and very few people will even raise an objection.

In the upcoming Wall Street sequel, Gordon Gekko makes a statement that seems very appropriate for the world in which we now live….

“Someone reminded me I once said ‘Greed is good’ – now it seems it’s legal”

  • Angry Voter

    Of course, it’s part of the deal they cut with the anational banking cabal back in the 30s.

  • hungry4food
    May 22nd, 2010 at 5:00 pm

    The Governments of the world are just printing their own operating money while the transform the economies into one world fashion to deal with what they see as a worldwide problem , over population .
    Bill Gates spells it out here , people are the largest contributor of CO-2 , the progressives biggest fear of contributing to climate change .

  • Shia Lebeuff had better not ruin this movie.

  • Typical voter

    We the people need to call a Constitution Convention to level the playing field and impose four new limits on the federal government.

    1) No revenues may be raised directly from US Citizens or their employers. This would place a permanent prohibition against the federal government from taxing individual wages, or assets.

    2) A prohibition against any form of post service taxpayer funded compensation for persons serving in any federal elected position.

    3) A prohibition against allowing any individual to serve more than two terms in any single elected office and no more than sixteen years in all elected offices combined.

    4) The criminalization of “paid” lobbying. No individual or business may lobby or solicit members of Congress on behalf of any other individual or business for any form of compensation or favor.

  • Chris

    Is “Typical voter” fake? His demands contain several spelling and grammar issues, such as “Constitution Convention” (which should probably be “constitutional convention”) and “four” (instead of “for”). His demands numbered 1 through 4 are not even whole sentences, missing verbs or improperly using verbs. So is this perhaps a Russian communist that is trying to undermine our democracy by suggesting a coup d’état?? No one but lawmakers in the several states can call a constitutional convention, just so you know. So “we” is not possible whoever you are (I highly doubt you are a legislator).
    I agree with number 4, by the way. But number 1 is total nuts and impossible. I mean where is the United States supposed to receive the money to fund defense, education, law enforcement, retirement and social safety-net programs, high ways, etc.? Since you said you don’t want assets to be taxed, customs duties would be outlawed as well. You said something about direct taxes and then mentioned wages. Just for clarification, taxes on wages are indirect taxes; so would you want to outlaw both direct and indirect taxes? That leaves absolutely nothing to be taxed. Wait, aliens? That effectively causes trade with other nations to stop. Really, a prohibition on taxation would be like pushing a knife down someone’s throat, death inevitable. And that wouldn’t be nice if the United States ceased because then Florida will become French again, California to Texas will be Mexican and the whole East Coast will be under the rule of the British queen, spare for some angry Native Americans that will take the Mid-West back.
    I tend to reject number 2 and 3 on procedural grounds (means I don’t know how that would work out).
    Think twice about what you wish, because you might just get it…

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