Insider trading is illegal. Children (adult or otherwise) of individuals in possession of material non-public information about a company are not allowed to trade stocks based on that information.
The way I see it, congressional trading rules are a natural extension of insider trading rules. Children/spouses should be prevented from trading not because they are children/spouses, but if/because they’ve been made aware of inside information.
What part of the constitution would prevent such rules from being implemented?
If that's the case why is a new law needed in the first place? The adult children are independent of their parents and can be prosecuted under current law.
For the same reason a new law is required for elected officials. If an elected official is currently exempt from insider trading rules, and if the rationale is that the official doesn't actually hold "inside" information, and if it's necessary to change that, then it follows that the "tipping" clause must also be updated.
This could also depend on how a new law is written. If the law is explicit that information gained as an elected official is material/non-public, then existing tipping clauses may already account for this.
However, if this is not explicitly accounted for, it becomes an easily exploited loophole.
I'm still curious though - why is this potentially a constitutional issue?
> Ossoff's bill also would apply the ban to any *dependent children* in addition to the spouses of lawmakers, whereas Hawley's bill would not.
I mean this sort of makes sense. In order for an adult child to be a dependent they have to be pretty much invalid, and not responsible for their own actions.
I can see that working as a part of a private contract, I'm just not sure it's constitutional for the government to prevent one person from doing something based on their relationship to another person. Especially spouses, but perhaps even children.
So as a government official with appointment authority, should I be allowed to hire my wife to work for my agency in a role they may or may not be qualified for?
It’s pretty easy to see how this stuff goes off the rails.
I think that's different. This isn't about appointing someone to a job, it's about preventing one person from trade with another strictly because of their marriage.
Say if I was a Senator, and I had the ability to kill some legislation that would financially hurt Facebook using my committee post. I call my wife before the hearing and tell her to buy stock, is that ethical?
It's not ethical, but we're talking about the constitution, and fines or imprisonment. Should your wife go to jail if she buys stock while you're a senator? Would that be constitutional? I sincerely doubt it.
It’s been tested in court. Employment isn’t a right.
When I was subject to public officers law, my kids were unable to play the lottery, engage in any sales or lobbying activity without written permission from agency counsel.
I know of one case where a senior leader was referred for civil penalty (fine up to $20k) because he took a meeting with a prospective contractor that his kid worked for.
There’s other areas like this as well. The actions of a spouse or child can affect a security clearance or be disqualification for employment as a police officer.
If you read the link, it specifically says dependent children, which seems fair. I don't see how how the constitution protects your stock trading rights if you are likely to be privy to insider information.
If you work in the financial industry, there are already draconian rules on oversight for all trades made by you, your spouse, your dependents, and even roommates. Why shouldn't this oversight extend to members of congress?
I'm not qualified to say if it's constitutional, but it would seem that it's widely accepted as constitutional if existing insider trading law applies to similar situations.
Can you explain the reasoning more? And why making laws for Congress would raise a novel issue?
College students who are paid for by their parents can also be claimed as dependents on tax returns. I have no idea whether that is the criteria in Hawley’s bill, but it would be reasonable. If you want to trade stocks, don’t take senator dad’s money.
The way I see it, congressional trading rules are a natural extension of insider trading rules. Children/spouses should be prevented from trading not because they are children/spouses, but if/because they’ve been made aware of inside information.
What part of the constitution would prevent such rules from being implemented?