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by throwawaymath 2908 days ago
Despite widespread belief to the contrary, members of Congress are not allowed to trade on information for which they are bound by either a confidentiality agreement or a fiduciary duty.

Information asymmetry does not constitute insider trading. Trading on information which you have that the broader public does not have is also not insider trading. Trading on exclusive information which you learned through professional exposure, and which does not come with confidentiality or fiduciary requirements, is not insider trading.
2 comments
JumpCrisscross 2908 days ago
> members of Congress are not allowed to trade on information for which they are bound by either a confidentiality agreement or a fiduciary duty

Prior to 2012, Congress was actually explicitly permitted to insider trade. That was fixed by the STOCK Act [1]. It doesn't make it easy to pull up records, but it does close the loophole.

[1] https://www.npr.org/sections/itsallpolitics/2013/04/16/17749...

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throwawaymath 2908 days ago
Yes, but I'm talking about the myth that gets perpetuated post-2012.
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ModernMech 2908 days ago
That's not really what congresspeople do. They have financial interests and then write and pass laws to make those interests more valuable. It's not insider trading, but its some next-level shit. And the best part is its out and in the open. We all see it happening right in front of us.
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throwawaymath 2908 days ago
What you're describing is not the grey area I'm talking about that people frequently confuse with illegal insider trading. I'm referring to the way that people believe Congress is explicitly allowed to get away with things ordinary people are not. Post-2012, they are not, but their work still exposes them to information they can legally use depending on the circumstances. That does not constitute insider trading, even for a relatively overzealous SEC.
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