Politicians in Congress are explicitly allowed to insider trade based on information they hear about. This is why congressmen's stock portfolios are far more profitable than an average person's.
It makes sense to insulate Congressman from insider trading charges. They are exposed to so much inside information that the executive could bring charges against them on a whim. Which would have significant separation of powers concerns.
Of course, the answer to that is to require all Congressmen to put their assets in a blind trust.
>It makes sense to insulate Congressman from insider trading charges. They are exposed to so much inside information that the executive could bring charges against them on a whim. Which would have significant separation of powers concerns.
How about disallowing them to trade altogether in the first place for as long as they hold office?
It makes sense if an idiot were to come up with a solution in 5 seconds.
The answer is NOT to give them free reign to do it. It's to prevent them from being allowed to choose stock investments entirely. They get enough perks, they don't need free reign over the market.
I agree that public disclosure of their trades is viable, because if they decide to trade based on information they have, the public (whom they _serve_!) should also get the same opportunity.
Wait, Wait. Hold a second. I am not sure I read that correctly.
Are you telling me that until 2012, for every confidential hearing that American congressman could attend, every budget proposal or allocation they had to vote on, every bill (say on the environment, or regarding corporate or financial regulation) they had to pass, or every declaration of war they had to approve, they were allowed to choose the outcome and personally profit from it?
The only study on the performance on Congressional stock portfolios is from 2004 [1]. Do you know of any post-STOCK studies?
[1]: Ziobrowski, A.J., Cheng, P.X., Boyd, J.W., and Ziobrowski, B.J. (2004) “Abnormal Returns from the Common Stock Investments of Members of the United States Senate.” Journal of Financial and Quantitative Analysis, Vol. 39, No. 4, pp. 661-676. (http://www.walkerd.people.cofc.edu/400/Sobel/P-04.%20Ziobrow...)
"Congress Quickly And Quietly Rolls Back Insider Trading Rules For Itself"
"It was such a national risk that Congress did the whole thing quietly, with no debate. The bill was introduced in the Senate on Thursday and quickly voted on late that night when no one was paying attention. Friday afternoon (the best time to sneak through news), the House picked it up by unanimous consent. The House ignored its own promise to give Congress three days to read a bill before holding a vote, because this kind of thing is too important to let anyone read the bill before Congress had to pass it."
I already explained this in my reply to bsbechtel's comment (https://news.ycombinator.com/item?id=10045388). The amendment makes retrieving disclosure reports more difficult, but does not repeal the STOCK Act's explicit prohibition on insider trading by politicians.
I'm pretty sure the key provisions of the STOCK Act were repealed the same weekend as the Boston Marathon Bombings. See the amendment section of the Wikipedia article you linked to.
The amendment makes it significantly more difficult to detect insider trading (since financial disclosure reports are not available online), but I wouldn't describe it as a repeal of the law's "key provisions". See http://www.npr.org/sections/itsallpolitics/2013/04/16/177496... :
"Still, two major elements of the law remain. Insider trading is illegal, even for members of Congress and the executive branch. And for those who are covered by the now-narrower law, disclosures of large stock trades are required within 45 days."
Of course, the answer to that is to require all Congressmen to put their assets in a blind trust.