DVR Alert: Insider trading is perfectly legal for Congresscritters - 60 Minutes tonight

[Bozita]

November 11, 2011 1:12 PM
Congress insiders: Above the law?
77 Comments
Watch the Segment »

(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.

more...
http://www.cbsnews.com/8301-18560_162-57323221/congress-insiders-above-the-law/?tag=contentMain;cbsCarousel

[Electric Monk]

1. k&r

[JohnyCanuck]

2. K&R n/t

[Fumesucker]

3. Seems like that might be a good thing to put on Facebook..

I don't have an account though..

[russspeakeasy]

28. Somebody, PLEASE.

[Warpy]

4. I once read a startling statistic

It said that on average, a savvy investor can make about 2% per year increasing his net worth. A particularly savvy professional trader can realize about 6% per year.

Members of Congress average 12% per year, savvy or not.

[meow2u3]

5. This scandal calls for a national referendum, aka "People's Veto" of legalized white-collar crime

Since Congress won't pass laws exempting themselves from laws that apply to everybody else, we'll have to do it for them.

[alp227]

6. The problem is that the 60 Minutes source is a Breitbart associate

From Media Matters: "Pelosi Smear Reportedly Based On Book By Breitbart Editor" quoting the SF Chronicle "Pelosi's investments questioned in CBS report": "Pelosi's office said "60 Minutes" told her staff that the report was based on a book by conservative writer Peter Schweizer, a fellow at the Hoover Institution at Stanford University, who earlier had accused the Pelosis of hypocrisy for hiring non-union labor at their Napa vineyard." Additionally, Schweizer edits the Breitbart blog BigPeace.com and is a research fellow at Stanford University's Hoover Institution, whose fellows also include Thomas Sowell, Victor Davis Hanson, and Gary Becker.

(That RW talking point about Pelosi's vineyard is garbage as Pelosi paid her workers more than unionized workers' average, see this KGO ABC7 report "Pelosi's Napa Business Scrutinized")

[Dover]

7. Greed is a nonpartisan sport.

There is plenty of dirt to dish on both sides of the aisle. Greed is a sustainable commodity - they'll never run out it.

[Ilsa]

13. That was my impression also from the report.

They talked about Hastert's real estate deal and other manipulations.

[WhaTHellsgoingonhere]

18. Fmr. Rep Baird, author of bill, is a Democrat

[alp227]

21. Brian Baird from Washington

http://www.politico.com/news/stories/1010/43400.html

[slipslidingaway]

22. Only one Repub cosponsor, the rest are Dems. They also talked about political intelligence firms ...

http://sunlightfoundation.com/blog/taxonomy/term/political-intelligence/

"On the intersection of K Street and Wall Street lies the burgeoning “political intelligence” industry, where lobbyists, advisors and other DC insiders use their campaign contributions, connections and clout not to shape legislation, but to make investment decisions.

...The political intelligence industry relies on remaining in the shadows. The website for one firm that specializes in political intelligence notes,

Our political intelligence operation differs from standard 'lobbying' in that the OSINT Group is not looking to influence legislation on behalf of clients, but rather provide unique 'monitoring' of information through our personal relationships between lawmakers, staffers, and lobbyists working the K Street - Pennsylvania Avenue corridor. Providing this service for clients who do not want their interest in an issue publicly known is an activity that does not need to be reported under the Lobbying Disclosure Act (LDA), thus providing an additional layer of confidentiality for our clients.

If the STOCK Act passes, the “additional layer of confidentiality” will disappear, helping to ensure that insider information is not driving investment decisions for a few, leaving the rest of us in the dark."

[Electric Monk]

8. kick nt

[slipslidingaway]

9. Thanks, on now. n/t

[Dover]

10. OH MY GOD! A new sign needs to go over the door to Congress - "Incest is best"

The level of corruption runs sooooooooooooooooooooooooooo deep, is sooooooooooooooooooooooo insideous,
and soooooooooooooooooooooooooooo tied up in corporations/finance, I don't see how to save our government.
They have shown up at the trough of crony captialism.

[nc4bo]

15. It IS a nightmare of almost incomprehensible proportions.

These people are perfectly content to keep things just the way they are.

Occupy Everywhere!

[Kaleko]

27. Finally, the masks are coming off.

That's the positive side of the nightmare.

We can't change what we don't acknowledge.

Occupy the Vampire Squid!

[rdking647]

11. can we just vote them all out????

[Dover]

23. And then what?

Power corrupts. WE are all going to have to change this corrosive tendency toward greed before we can hope to change the system. Otherwise it will continue to show up in any system.

[Ilsa]

12. This needs to change.

The possible manipulation of legislation for personal profit is appalling.

The use of insider information for personal profit should be equally illegal.

They really live by another setoff rules. No shared sacrifice financially, either. Their bennies are saved.

[slipslidingaway]

14. They mentioned this bill, HR 1148 to prohibit members of Congress...

from trading on knowledge that is not in the public domain.

Cosponsors have now grown to 9 since first being introduced.

http://www.govtrack.us/congress/bill.xpd?bill=h112-1148

"To prohibit commodities and securities trading based on nonpublic information relating to Congress, to require additional reporting by Members and employees of Congress of securities transactions, and for other purposes."


http://insidertrading.procon.org/view.resource.php?resourceID=002391

"May 16, 2007

Reps. Baird and Slaughter Reintroduce STOCK Act in 110th Congress

"In an effort to strengthen ethical standards and conduct in the U.S. House of Representatives, Congresswoman Louise Slaughter (NY-28), Chair of the House Rules Committee, and Congressman Brian Baird (WA-03) today re-introduced legislation to stop insider trading on Capitol Hill.

The original version of the Stop Trading on Congressional Knowledge Act (STOCK Act) was introduced last year by Reps. Baird and Slaughter. The new version introduced today has been strengthened to apply to all employees of the executive branch, in addition to Congressional staffers and Members of Congress."


http://sunlightfoundation.com/blog/taxonomy/term/political-intelligence/

"On the intersection of K Street and Wall Street lies the burgeoning “political intelligence” industry, where lobbyists, advisors and other DC insiders use their campaign contributions, connections and clout not to shape legislation, but to make investment decisions. The Stop Trading on Congressional Knowledge (STOCK) Act, H.R. 1148, introduced by Representatives Walz and Slaughter would shed some light on political intelligence activities by requiring firms that specialize in gathering nonpublic information from Hill sources to register with the House and Senate, as lobbying firms are required to do. The bill also creates rules to tamp down the occurrence of insider trading by members of Congress.

It’s no wonder that savvy investors at hedge funds look to Washington insiders to help them decide to buy or sell stocks. Will a bankruptcy bill help or hurt credit card companies? Will offshore oil drilling be allowed? Will legislation to address antitrust claims be introduced? Is the pharmaceutical industry going to face new regulations? What Congress does matters very much to the business world, and early, nonpublic information about the way Congress will impact any business or industry can lead to huge profits for investors.

The political intelligence industry relies on remaining in the shadows. The website for one firm that specializes in political intelligence notes,

Our political intelligence operation differs from standard 'lobbying' in that the OSINT Group is not looking to influence legislation on behalf of clients, but rather provide unique 'monitoring' of information through our personal relationships between lawmakers, staffers, and lobbyists working the K Street - Pennsylvania Avenue corridor. Providing this service for clients who do not want their interest in an issue publicly known is an activity that does not need to be reported under the Lobbying Disclosure Act (LDA), thus providing an additional layer of confidentiality for our clients..."

[slipslidingaway]

16. First bill H.R. 5015 introduced in 2006 and strengthened in 2007 under the new bill...

http://www.govtrack.us/congress/bill.xpd?bill=h109-5015

[truedelphi]

31. Thank you for this post. n/t

[slipslidingaway]

32. You're welcome :))) n/t

[malaise]

17. Watching

Interesting

[sixmile]

19. Executive Order

Use it, Mr. President.

[Fumesucker]

20. You funny..

:rofl:

[Autumn]

24. K/R

Watching this made me sick.

[JohnyCanuck]

25. K&R n/t

[Gold Metal Flake]

26. At some point we will have crested the 50% point on the way to total fascism.

That point may be behind us.

[truedelphi]

33. Oh it is definitely behind us.

Weasels have been ripping the flesh of the Middle Class for so long, some deem it normal activity.

But it is definitely fascism, and Zappa would be writing a slammin' tune or two about it if he were still around.

[Name removed]

29. Deleted message

Message removed by moderator. Click here to review the message board rules.

[JudyM]

30. Also abhorrent is the fact of congressfolks sharing insider info with hedge fund mgrs

which was also mentioned in the 60 Minutes piece... meaning that they and their clients then also have the benefit. Are they exempt from prosecution, as well, for trading on this insider info? Certainly they shouldn't be, and at a very minimum there must be a reporting requirement for congress. Plus it should still be a crime for congressfolks to share this insider info, even if they are allowed to trade on it!

We desperately need a new law that requires congress to live by the laws the rest of us live by. This is just... a gross lack of ethics. How I wish the Occupy movement had some legs.

[butterfly77]

34. K&R...