A senator could vote for an infrastructure bill, then buy stock in concrete. Or they could sit on the Armed Services Committee and trade in defense contractors stock.
Lawmakers could vote for infrastructure bill, then buy stock in a concrete firm.
The example was about someone who votes for an infrastructure bill and then buys a stock. Votes are public, so you could buy the stock at the same time they do.
The problem there is that automated traders have the same idea - and are a shit ton faster than you. So by the time you’ve so much as heard of it, the price is already up 25%
No they don’t. They can buy the stock before the vote, knowing which way the vote is gonna go.
Senators do communicate with each other on these things, even exchange votes (eg: I’ll vote for this if you vote for that). That’s before we get into the matter of party whips pressing members to vote certain ways. None of that is public record.
The example was someone who bought after voting. So at least that doesn’t seem to present a problem.
If someone knows a bill is coming up that is likely to pass, they too can buy the stock before the vote.
If nobody knows whether it will pass besides the legislator, then yeah that’s totally insider trading. Which is already illegal.
But frankly that’s a pretty rare situation. Legislators usually telegraph well in advance how they are going to vote for upcoming bills. And when the outcome is a surprise, it usually surprises the legislators too.
Correct. It’s the enforcement of the law that needs to change.
Specifically, enforcement needs to be automated, rather than relying on someone in the political game manually pulling the trigger. Because that someone at the moment has every politics reason not to, thus enforcement is the exception and not the norm
The article says it is illegal for them to trade on nonpublic information. Isn’t that the definition of insider trading?
In 2012, President Barack Obama signed the STOCK Act, banning members of Congress from trading with nonpublic information, meaning details they glean in their work that are not available to the general public.
Not saying it doesn’t still happen, but it is illegal.
Problem is, we don’t get any forewarning about how they’re gonna vote.
The example was about someone who votes for an infrastructure bill and then buys a stock. Votes are public, so you could buy the stock at the same time they do.
The problem there is that automated traders have the same idea - and are a shit ton faster than you. So by the time you’ve so much as heard of it, the price is already up 25%
Maybe, but then legislators would have the same problem buying that stock.
No they don’t. They can buy the stock before the vote, knowing which way the vote is gonna go.
Senators do communicate with each other on these things, even exchange votes (eg: I’ll vote for this if you vote for that). That’s before we get into the matter of party whips pressing members to vote certain ways. None of that is public record.
Well that would seemingly be against the “STOCK” act. I’m sure the SEC would have something to say about that…
lol :(
The example was someone who bought after voting. So at least that doesn’t seem to present a problem.
If someone knows a bill is coming up that is likely to pass, they too can buy the stock before the vote.
If nobody knows whether it will pass besides the legislator, then yeah that’s totally insider trading. Which is already illegal.
But frankly that’s a pretty rare situation. Legislators usually telegraph well in advance how they are going to vote for upcoming bills. And when the outcome is a surprise, it usually surprises the legislators too.
Correct. The problem is that it’s not enforced on senator’s as they don’t want to indict their fellow congressperson
Sure, but if that’s true then banning it with another law won’t change anything.
Correct. It’s the enforcement of the law that needs to change.
Specifically, enforcement needs to be automated, rather than relying on someone in the political game manually pulling the trigger. Because that someone at the moment has every politics reason not to, thus enforcement is the exception and not the norm
Insider trading is not illegal for legislators. They specifically made it legal for themselves.
The article says it is illegal for them to trade on nonpublic information. Isn’t that the definition of insider trading?
Not saying it doesn’t still happen, but it is illegal.
Insider trading is absolutely illegal for legislators. In fact, Chris Collins (NY-27) is currently serving time for insider trading.
You’re confusing the series of events.