Congress Quickly And Quietly Rolls Back Insider Trading Rules For Itself

from the can't-mess-with-the-profits dept

In November of 2011, the TV show 60 Minutes did a big expose on insider trading within Congress. While everyone else is subject to basic insider trading rules, it turned out that members of Congress were exempt from the rules. And, as you would imagine, many in Congress have access to market-moving, non-public information. And they made use of it. To make lots and lots of money. Of course, after that report came out and got lots of attention, Congress had to act, and within months they had passed the STOCK Act with overwhelming support in Congress to make insider trading laws that apply to everyone else finally apply to Congress and Congressional staffers as well. As that link notes:

The lopsided votes showed lawmakers desperate to regain public trust in an election year, when the public approval rating of Congress has sunk below 15 percent.

Of course, here we are in 2013 and, lo and behold, it is no longer an election year. And apparently some of the details of the ban on insider trading were beginning to chafe Congressional staffers, who found it hard to pad their income with some friendly trades on insider knowledge.

So… with very little fanfare, Congress quietly rolled back a big part of the law late last week. Specifically the part that required staffers to post disclosures about their financial transactions, so that the public could make sure there was no insider trading going on. Congress tried to cover up this fairly significant change because they, themselves, claimed that it would pose a “national risk” to have this information public. A national risk to their bank accounts.

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.

And, of course, yesterday, President Obama signed it into law. Because the best way to rebuild trust in Congress, apparently, is to roll back the fact that people there need to obey the same laws as everyone else. That won’t lead the public to think that Congress is corrupt. No, not at all.

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Comments on “Congress Quickly And Quietly Rolls Back Insider Trading Rules For Itself”

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111 Comments
egghead (profile) says:

Re: Re:

“Americans no longer trust their government, and, in my opinion, won’t settle until the House is cleaned of the roaches now infesting it.”

The sad part is that there are plenty more roaches ready and willing to take their place and are just as corrupt. If only we could go back to having citizen congressmen that come together for a short time and go back to their jobs; thereby allowing others to take their place. This is the sort of crap that happens when you let a government body pass laws that affect themselves without input from the public. Congress should never be allowed to pass or amend a law resulting in an exemption for themselves or specifically targeted at themselves. Congressmen should be regarded as any other citizen.

Anonymous Coward says:

Re: Re: Re: Re:

It should also be noted that (and I am merely more clearly expressing what the OP already says), as a legislator, you are an insider because the laws that you maybe planning to pass or the legal proposals that you may have access to that the public doesn’t yet can affect industries, companies, and stocks and that can affect how you invest your money. If you know that a new proposal may help industry A and another regulation may hurt industry B you may invest accordingly. If the public is not yet aware of these proposals then that’s inside information and you are engaging in insider trading.

Anonymous Coward says:

Re: Re: Re:

The really bizarre thing is that they are all answerable to their electorates and those idiots keep voting for them. Average citizens vastly outnumber special interest groups but prefer to keep voting for the same types of people and then complaining about what they do rather than doing anything about it. Like teachers who can’t control their classes the problem isn’t that they sometimes misbehave its that when they do no one in charge takes any responsibility.

dallas mccoy says:

Re: congress criminals

Congress worries very little about trust in government. That is, unless it goes to the point to where it looks like some HUTAs are about to get their heads out of their asses. Then they will throw out a little tidbit. Destruction of all manind will be the only thing tyhat will change any of the criminal actions of the criminal government.

Ryan Good says:

I am going to make sure as many people know about this as possible. This sort of corruption fills me with so much rage. Then to think about congress getting away with it and not having to answer for this sort of non-sense at all makes me rage cup runneth over.

Every pundit in the US, both right and left should be grilling our elected officials over this one.

Christina Marie says:

Re: Response to: Ryan Good on Apr 16th, 2013 @ 11:44am

No. The pundits are there to channel our anger so we won’t act upon it. Some companies use this very effective tactic as well. For example, UPS: They allow their hourly workers who don’t meet with the public to yell and complain (and swear) as much as they like as long as they don’t harass anyone. It keeps them from going postal.

Anonymous Coward says:

These People Have Hard Jobs

The least we could do is let them make a little money. It is not like there is a victim. Even if there is, its too boring to talk about. Plus, this is what the corporation “The United States of America” is all about. Making that $$$$.

If “We the People” want a voice in “These United States” then we need to dissolve the corporation that our government has been outsourced to. They apparently can’t protect us from “terrorist” attacks while they steal, bend the rules and remove peoples rights.

It is time to start prosecuting white collar crime like it is copyright infringement or hacking.

Anonymous Coward says:

What? They didn’t slip in gun control, anti-abortion restrictions, immigration, gay marriage / civil union rights, medical marijuanna, birth control, or any of the other hot topics meant to distract the public from what’s REALLY going on?

And then they wonder why people don’t vote. We have a one nation party. I’m sure this serves the corporate-types leaking the information, sort of a merry-go-round among the 1%.

“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…”

And there goes the Faux Tea Party / libertarian idealists if they don’t want to admit thier hero’s are in the same boat with everyone else. If they weren’t corporate-backed, these kind of shennanigan’s should create tidal waves. I’ll be interested to hear how it’ll spun, if it makes the news at all.

Ellie (profile) says:

Re: Social issues only, no fiscal or foreign policy

This is becoming impossible for me to ignore, that
“gun control, anti-abortion restrictions, immigration, gay marriage / civil union rights, medical marijuana, birth control, or any of the other hot topics [are] meant to distract the public from what’s REALLY going on”.
Seems that way to me too. Sadly, it also seems that regulations, which should help, are being used to serve other, quite separate agendas.

out_of_the_blue says:

OUR SERVANTS should always have to prove innocence,

should be jailed on accusation, denied counsel, and quickly tried by a jury of The People. — And that’s fully Constitutional: they’ve agreed to be SERVANTS. The penalty here would be only removal from office; it’s NOT yet to criminal level, but could be after investigation. — You don’t retain full civil rights when serve in the military: why should those who explicitly wish to rule us retain full rights? — The problem is that being elected confers super-rights.

Simple and fully valid solution is to pull down the Rich and powerful: they’re ALWAYS crooks.

crade (profile) says:

Re: OUR SERVANTS should always have to prove innocence,

Sheesh are you ever inconsistent.. Do you get paid per trolled thread or something?

You can’t possibly honestly stand behind the sentiment behind your statement here. It’s ridiculous. Of course elected officials should have to convince people of their innocence or risk people not voting for them. It’s not a right to be an elected official, you don’t need a trial to get rid of the ones who walk, talk and act corrupt. If you did, you would never have a prayer of getting rid of any corruption unless they decided they wanted to let you.

Moneky with Attitude says:

Re: Re: OUR SERVANTS should always have to prove innocence,

Define Rich… Now welcome to the slippery slope (sorry i cant stand those statements).
Are some ppl rich? Yes
Are some ppl crooked? Yes
but the 2 together are not always true… Some of the greatest richest ppl give it all away or very large portions to make new science, new medicine, help the homeless, help educate (my personal one), and to feed the hungry… Who gets to decide what rich is? if all rich are bad, why do so many non-rich play the lotto? if being rich is bad why do so many ppl make a company?

vastrightwing (profile) says:

Here we go again

Repeal the Glass?Steagall Act, bankrupt the nation with incestuous insiders running the country. Next on the agenda, repeal the insider trading laws so these same banker/congressmen can continue raiding our tax dollars. Oh and sprinkle special exemptions for certain large investment firms to trade commodities unlike us. Oh and allow high frequency trading (AKA front running), but throw anyone else in jail who tries to do the same thing. Yes, no surprise here.

Anonymous Coward says:

now who is still of the opinion that what Congress does is for the good of the people and in the peoples best interests? who now can see that every law that is passed is done so it has maximum detrimental impact on the people and minimal impact (if any at all!) on the rich and powerful! who also now believes the ‘revolving door’ syndrome that exists between Congress and the industries that pay a fortune every year to ensure that what they want is what they get? there isn’t a single politician that is in office for any reason other than to increase the size of his/her bank account and they dont mind how many or the size of the lies they have to tell to get it!!

Anonymous Coward says:

Re: Who cares

Its not like other countries are much better for the most part everyone is corrupt we just get to see our corruption. I like being able to see the problem it gives me something to aim to fix. Without that I can only complain without knowing what’s going on. If your going to trash talk a country that isn’t yours then name your country so we can compare.

Uriel-238 (profile) says:

Re: Who cares

America is a shithole. Get what you can now before your country goes the way of Cyprus. Your government is the most corrupt organization in the world, one that regularly assassinates people, including Americans, to promote its policies. Enjoy your shithole.

Wow. Do you say this to the citizens of North Korea and the People’s Republic of the Congo? How about Greece? Enjoy your shithole?

We don’t like living in a place where civics include institutionalized corruption. It just happens to be our home.

Feel free to come in with your imperial swag and build us roads and teach us literacy, if you really think it’ll help.

Ellie (profile) says:

Source says differently, even worse!

Firedoglake sourced it from The Hill, which says that the more stringent disclosure and reporting requirements will still apply to the president, vice president, members of Congress, candidates for Congress, and some nominees. This is the ridiculous part (via Obama signs STOCK stepback):

[The law] would have required roughly 28,000 senior government officials to post their financial information online, and had come under harsh criticism from federal government employee unions.

There are 28,000 senior government officials EXCLUDING all the members of Congress?! Or considered senior enough such that disclosure of financial information on a publicly available online database was:

…found to be problematic and even dangerous for high-ranking government workers… it could needlessly threaten the safety of government employees abroad, as well as make it difficult to attract and retain talent in the public sector.

Obama shouldn’t have signed it into law if it were going to endanger government employees posted overseas! But he did, to get a big flashy spotlight of attention back when he wanted to be popular. Then he gets most of it repealed quickly, over a weekend, with complicity of both parties. We aren’t idiots! That makes me feel MORE distrustful of government, rather than less.

Anonymous Coward says:

This article has been linked at a popular website which allows people to comment on the article. (I don’t know what the rules are here for inserting a link to that website).

This has created a firestorm (to put it mildly) regarding the truthfulness of both the title and contents of this article.

According to the postings at the other site, Congress exempted a lot of high level government employees/appointees from reporting financial information, but members of Congress, the President, and Vice President are not included in this revision to the law… which means Congress didn’t actually exempt themselves from anything.

The postings at the other site include the PDFs of the changes and it does appear that Congress is still on the hook for financial reporting and Insider Trading restrictions.

Uriel-238 (profile) says:

American Dream? Fuck That.

Once upon a time in America there was such a thing as the American Dream. Not something we’d ever achieved, but that we were working towards.

When most people hear “American Dream” they imagine a good middle class living, but those were the symptoms.

Basically the American Dream was the hope that some day ours would be a true meritocratic economy: an honest day’s work for an honest day’s pay.

Nowadays it’s an illusion, while big corporations evade taxes with a double Irish with a Dutch sandwich, and people with money to invest can put it all in Halliburton just before a big war.

Now it looks like they’re not even trying. There is no interest in balancing the income disparity or the wealth disparity. If you’re born a Romney, you’re as good as nobility, and you are considered to have as much divine right (in this case divine right by money) as if you were born a Tudor.

America is dead.

Michael Morris (user link) says:

Congress and insider trading

Are you kidding me?
The president has gone too far once again. This Congress and our president continue to violate the Constitution and show American citizens the total disdain they have for us.
The actions of both our President and Congress over the last two decades has been deplorable at best.
Do they really think they are too big to fail?
The straw that broke the camels back fell on the camel a long time ago. Now the straw is burying the camel.

bridget says:

This is a complete lie!!The main concern about the bill — which there was no point in his vetoing, even if he’d wanted to, since it was passed quickly and by unanimous consent — is that those who’re required to file financial disclosure forms won’t have to post them online, as the original STOCK Act mandated. That, however, doesn’t make them any more difficult to access than previously but, of course, it doesn’t make it easier, either.

Ilene Richman says:

put them in jail if they use insider trading

Rules in this country apply to everyone even Royalty like Congress, Senate, President, Supreme Court, associates who assist legislators. If they breach insider trading rules, they should be tried and go to jail. It is about time to put them in jail as they did to Martha Stewart for an insignificant trade she made. Everyone must follow the rules of law, including legislators, their assistants and associates and all in government. If breached, make an example and send them to jail.

Kilgore Trout says:

Ha. Ha. Ha.

1776

Once upon a time there was a land
of bold and brave
Whose founding Fathers firm inground do stand
within their graves.

There was such a wondrous land to stay,
The Land of Free
As long as one obey as sheeple prey
The Powers That Be.

There was but once a God, Who was revered
as manners state
— Now it is but commonsense inversed,
Worshiping State.

ObeJuan says:

somebody didn't get the memo!

Bad move on their part (congress), with all the signs now pointing to the masses getting really, really, really upset with our government (daily protests, bombings, shootings, fires, ricin being mailed to politicians, etc), this was a bonehead move, sure to provoke more distain and loathing by a population that has already been through too much to deal with (90+ million unemployed, 100+ million who have lost their retirement investments, etc). I have no sympathy for any politician who gets caught in the crossfire of our nations ire.

Uriel-238 (profile) says:

Re: somebody didn't get the memo!

When the 99% comes out again and the media wonders why they’re bombing shopping malls*, they’ll point to OWS and say Those who make peaceful revolution impossible will make violent revolution inevitable.

Though it was said by (attributed to) JFK, I think it would sound just lovely in French. Non?

* Disclaimer to everyone, especially the NSA, I’m not, with a big emphasis on NOT, suggesting or endorsing that anyone actually bomb a shopping mall.

capital building, though…

dallas mccoy says:

techdirt's commenters.

I have seen more comments pretaining to actuality in a few minutes while reading Techdirts replies, than i have in ever sen before. The do good, but they still do not go to the real reason why this is happening. Enslavement is the intent, and with a world of HUTA (head up the ass) it will be achieved. Total enslavement leads to total destruction.

Pup Chuck says:

Congressmen & Senators

We Need term limits– 12 tears for senators & 8 years for representatives– If they can’t complete what they wanted to do in that time frame, they should quit anyway.
In addition all federal compensation and fringe benefits, stops upon termination, Reelection failure and or term limits.

These 40 years of service gravey trainers have to go

LibertyBell777 (profile) says:

PLEASE PEOPLE - DO YOUR RESEARCH BEFORE SPREADING LIES

This is a complete lie and has been circling the internet and social media like a wirlwind. S 617 overview from Congress.gov says:

S 617 ?Nullifies the effectiveness of the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) with respect to mandatory public, on-line financial disclosure reporting by congressional staff (except Members of Congress and congressional candidates) and executive branch officers and employees (except the President, the Vice President, and officers at levels I and II of the Executive Schedule who require nomination by the President and confirmation by the Senate).

Applies the financial disclosure reporting requirements and restrictions of the STOCK Act ONLY to Members of Congress, congressional candidates, the President, the Vice President, and executive branch officers at levels I and II of the Executive Schedule who require nomination by the President and confirmation by the Senate.

Extends the deadline until January 1, 2014 for:

?the Secretary, the Sergeant at Arms, and the Clerk to develop systems to enable the electronic filing of financial disclosure reports as well as their on-line public availability;
?the Director of the Office of Government Ethics to develop such systems for financial disclosure forms filed by covered executive branch officials.
Repeals: (1) the prohibition against requiring a login to search or sort the data contained in the publicly available financial disclosure systems, and (2) the requirement that a login protocol with the name of the user be utilized by a person downloading data contained in the reports.

http://beta.congress.gov/bill/113th-congress/senate-bill/716

Brian Mulich says:

Do as they Say... Not as "they" do!

I want to run for Congress if it means I can make millions from insider trading.
I want the most perfect health care money can buy.
I want to work for a few years and get retirement, pension, and all the bennies Congress gets.
I want to show up and argue my views and make people live how I want them to live.
And lastly…..I want to be able to make broken promises to get elected while actualy just jet setting the globe in luxery while the government is sound asleep, the people are in trouble and the future is in deep sh*t.

Mike_Strange (user link) says:

OUR CONGRESS IS CORRUPT

OBAMA PAST A BILL TO STOP INSIDER TRADING IN CONGRESS AND IN JUST A FEW MONTHS WENT BACKWARDS ON IT — I CONSIDER OUR CONGRESS USELESS TRASH — ANYONE OF THESE CONGRESSMAN THAT MAKES MONEY ON INSIDER TRADING WHILE MILLIONS IN THIS COUNTRY ARE LOSING THEIR HOMES AND STARVING SHOULD BE SHOT IN FRONT OF THE WHITE HOUSE — THE ARE PURE USELESS PIECES OF SHIT

Teresa Burns says:

Insider Trading by Congress

The country is lacking in jobs, real health care and steeped in poverty. Our Congress and Senate continue the practice of wealth by stealth. How low will you go before we are mired in muck by your greed? In the words of Rodney Dangerfield you get and deserve not respect. That is why most American are switching the party affiliation to independent. We will be shopping for a party that will represent the American people ?US and not your own pockets.

Anonymous Coward says:

congressional insider trading

At what point are Americans going to stand up and take back
their country from the scumballs in Washington. More embarrassing than Congress being able to do things like insider trading while citizens are being sent to prison for the same offense, ie Martha Stewart, are the Americans that turn their heads and won’t be bothered because they are bought off cheaply with sports and beer. Reminds you of what we did to the Indians when we came to this country. You also have to wonder how paid off are the Federal and Supreme Courts that allow law after law to be passed that definitely violate numerous constitutional laws.

Uriel-238 (profile) says:

Re: congressional insider trading

So when are you going to stand up and take things back? And exactly how would that manifest?

A lot of people are pissed off, but no one wants to be the guy disappeared for sedition.

Only when people are so desperate that they don’t care anymore, only when the consequences of capture seem tolerable in comparison to their own state of life will people turn against the government.

And we still have no reason to expect the new boss won’t be the same as the old boss.

Thomas Spol (profile) says:

congressional insider trading

Let’ find out who these wonderful members of congress are and make sure they do not return to office for another term. In other words let’s vote everyone of them out of office.

Just lookup the voting record of your congressional representatives. If they voted in favor, send them a note telling them how you feel about it. Let them know you will be doing everything possible to get them voted out of office.

Pat says:

Ultravires congress

Insider trading in 1787 would have been treason under the patriotic philosophy of constitutional creation, and rise to the level of bad behavior in office whether done by staffer or any other agent for Rep or Senator; staffers as employees have no exception as privilege against laws enforceable fo nongovernment. Unthinkable to allow congress to be made a form of private enterprise government.

Congress should be seeking consent by internet voting in order to vote, by voice, or as recorded now that two way internet communication is possible. The people have the capacity to have limited and enforceable powers of congress now, not the privileged royal and autonomous congress that it has evolved into. reign them into their original Constitutional form and function.

Freddley says:

Congress

The reason we don’t trust them is they are constantly trying (and succeeding!) in doing things to enrich themselves and insulate themselves from the laws they impose on everyone else. It is done in secret of course making people think that if they are doing the things that are discovered by the press what else are they up to that hasn’t been discovered yet? We need to completely revamp Congress starting with term limits, at least a 5 year waiting period before a ex member of Congress can go to work as a lobbyist or have any other business relationship with the Government, change their pension and healthcare to be the same as any ordinary government employee, make any change to their salary and benefits open to public debate and approval and finally make public ALL legislation including a list of any and all “earmarks” or other add ons. We need the Congress to be subject to the checks and balances designed into the Constitution by the wise founding fathers who recognized that people in power without oversight will usually become corrupt. Since Congress is to represent the people let’s make them be like us not as millionaires in a private club.

Freddley says:

Congress

The reason we don’t trust them is they are constantly trying (and succeeding!) in doing things to enrich themselves and insulate themselves from the laws they impose on everyone else. It is done in secret of course making people think that if they are doing the things that are discovered by the press what else are they up to that hasn’t been discovered yet? We need to completely revamp Congress starting with term limits, at least a 5 year waiting period before a ex member of Congress can go to work as a lobbyist or have any other business relationship with the Government, change their pension and healthcare to be the same as any ordinary government employee, make any change to their salary and benefits open to public debate and approval and finally make public ALL legislation including a list of any and all “earmarks” or other add ons. We need the Congress to be subject to the checks and balances designed into the Constitution by the wise founding fathers who recognized that people in power without oversight will usually become corrupt. Since Congress is to represent the people let’s make them be like us not as millionaires in a private club.

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