[RspecMAuthortah]

Not a sympathizer of these idiots who clearly thought that would get away. But what really astonishes me is how SEC is consistently after these retail small players when members of congress and its different committees are brazenly involved in insider trading and no one bats an eye. Hell even the Fed itself and its members were involved in trades that could only be explained by insider knowledge.

My sense is SEC wants to send the message it is OK if big players do it but small players beware.

[swyx]

well, for one, members of congress are legally allowed to insider trade.

pretty convenient laws when you make the laws.

[CharlesW]

> well, for one, members of congress are legally allowed to insider trade.

Are they?

Highlight link: https://en.wikipedia.org/wiki/STOCK_Act#:~:text=The%20law%20....

[JumpCrisscross]

Spoiler: members of Congress are not allowed to trade on inside information. We haven't yet seen a prosecution, however.

[dnsco]

Why go after congress members making millions when you can go after software engineers making thousands?

[JumpCrisscross]

> even the Fed itself and its members were involved in trades that could only be explained by insider knowledge

What's your source for this? We've seen questionably-timed broad-market transactions that yielded a few points. (The officials were fired and the Fed revised its rules.) But nothing that looks like insider trading.

The simple answer may be more mundane. Anyone who has spent time on Wall Street or in rule making knows how effective the SEC's systems are at catching insider trades ex post facto. The only seeming way around it is to avoid letting your trades get too profitable. At which point the risk-reward ratio becomes unattractive for anyone with much to lose.

[paulpauper]

Because it's not as obvious regarding congress. Person A gets tip, hands to B and makes trade, is a direct link and can be proven in court. Also, Congress has 532 people, so by statistical certainty we should expect some to beat the market.

[throw10920]

> Also, Congress has 532 people, so by statistical certainty we should expect some to beat the market.

Congress has many individuals that consistently beat the market by significant margins over a prolonged period of time, far past the point of reasonable arguments that you can make based on statistics.

[JumpCrisscross]

"We find weak evidence of informed trading for the pre-Congress period, suggesting that informed traders are not being selected into office. When combined with our finding that the portfolios of members serving on powerful committees outperform the market during their second term in office, this provides additional evidence that serving on influential committees is the mechanism by which members of Congress earn abnormal returns."

http://busecon.wvu.edu/phd_economics/pdf/16-25.pdf

[paulpauper]

Congress may outperform in the aggregate, but this is not enough to prove that they illegally traded. There are other possible explanations.

[geoduck14]

What explanations do you suggest?

[ctvo]

Being new congress members have given them ample free time to learn financial theories and market strategies from MIT OpenCourseware

[carimura]

Sure but many are beating the market by making trades on companies that those members are supposed to regulate.

[paulpauper]

what is one such example of a trade. I can only find examples of congresspeople making stock trades, not trades based off of specific pieces of insider information in a manner similar to this SEC report. Do you mean trades initiated before legislation?

[harry8]

Sure but Pelosi, Feinstein etc etc are so very very clever they'd have become multi-millionaires by them & their partners investing in the market if they didn't regulate those companies. /s

[joering2]

Case of Pelosi comes so often but she is a very weak example. Came from $300,000,000 family fortune "her" stock picks (she obviously doesn't pick herself but has financial firm representing and making moves on her behalf) did merely $6,000,000 in last 10 years, according to her tax statements. I don't get why her "inside trading" and her fridge full of ice-cream triggers so many people; people who clearly haven't done a basic research.

[harry8]

Because her husband is the person making their trades? That seems pretty far from "weak" to me.

https://www.businessinsider.com/nancy-pelosi-discloses-stock...

[Bedon292]

They have to disclose when family members make the trades, as shown by the article you posted. So its not really clever when it still gets disclosed. And something like having a spouse do the trades certainly isn't either. That's easy for the SEC to check too.

But what evidence is there that any of that is trading on non public information? I just lists off some of the most popular companies out there to invest in. The trades include AmEx, Apple, PayPal, Disney, Slack, Tesla, Alphabet, Facebook, and Netflix. I would be surprised if they didn't trade in many of those companies.

[mdoms]

Unless she is investing 100% of her fortune into stock picking those two numbers are completely unrelated and don't inform the discussion one iota.