Congressional Committee Thinks It Shouldn't Have To Answer The SEC's Questions About Insider Trading

from the we're-electable,-not-accountable dept

"Laws are for other people."
- Too many legislators to count
It's common knowledge that insider trading is illegal. In fact, we have an entire government agency in place to regulate trading and to investigate insider trading allegations. Executives have been sentenced to months (sometimes even years) in plush, well-appointed hellholes for participating in insider trading.

Members of Congress, however, were exempt from insider trading rules until 2012. An 2011 expose by 60 Minutes let millions of Americans know that members of Congress had plenty of access to market-changing information and were acting on it.

In a rare (ha!) show of self-preservation, a united House full of Congresspersons facing reelection battles passed the STOCK Act, which basically made Congress and its staffers play by the same trading rules as every other American.

In 2013, with Congressional members safely re-elected, the House decided to roll back its previous legislative effort in order to get back into the insider trading business. It tore out the stipulation demanding disclosure of trading activity -- the one thing citizens could use to verify adherence to the "no insider trading" rule -- stating that these disclosures were a "security risk." This sailed through with unanimous consent late on a Thursday afternoon (the end of the Congressional work week) and was signed by the President the following Monday.

Now, Congress is again claiming it doesn't need to submit to laws that govern US citizens and, again, it's doing this to avoid any transparency or accountability being applied to its trading activities.
The U.S. House Ways and Means Committee and a top staff member say the panel and its employees are "absolutely immune" from having to comply with subpoenas from a federal regulator in an insider-trading probe.

The committee yesterday responded to U.S. District Court Judge Paul Gardephe's order to explain why it hadn't complied with the U.S. Securities and Exchange Commission's requests for documents, phone records and testimony of aide Brian Sutter for more than a year.
The SEC is investigating a suspicious spike in health insurer trading volumes and prices ahead of a report that announced government payments to insurers would be increased, rather than decreased. This investigation claims that a Green Taureg LLC lobbyist sent the information to a Height Securities LLC analyst ahead of the official government announcement and that House Ways and Means staff director Brian Sutter may have been the originating source.

The Committee's legal rep has responded by claiming Congress is above the law or, if not above, very definitely adjacent to it, but certainly not within in and subject to federal subpoenas.
Kerry W. Kircher, the top lawyer for the House, said the SEC's request should be dismissed because the information it seeks concerns legislative activities protected by the Constitution, which can't be reviewed by federal judges.
Kircher also stated that his client does not and will not (EVER) have time for the SEC's "apply the insider trading rules to everyone" bullshit.
Sutter's connection to the investigation is "tangential" Kircher said, and would also interfere with his work because his schedule is "heavily, and nearly permanently, booked."
So, if anyone thought an SEC insider trading probe would bring more accountability to the House, those thoughts may now be dismissed to make room for more cynicism. There's a slim possibility the SEC may extract damning evidence, but it will have to fight its way through a House full of people with no conceivable reason to be compliant. Insider trading was a great Congressional job perk and its uncontested run helped pad the wallets of future lobbyists, board members and consultants. No one really wants to completely end it, but they'd certainly like people to stop talking about it.

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  • icon
    Violynne (profile), 8 Jul 2014 @ 6:45am

    When a governing body writes and passes law and excludes themselves from such a law, this is not a democracy.

    It's a dictatorship.

    reply to this | link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 8 Jul 2014 @ 7:04am

    The real purpose of Laws

    ... is to control the serfs for the benefit of the lords. And ours are the best in the world at doing so. No law shall ever be passed which is to the detriment of the lords, nor to the true benefit of the serfs.

    //damn, I'm moving from Skeptical to Cynical rapidly!

    reply to this | link to this | view in chronology ]

  • icon
    Geno0wl (profile), 8 Jul 2014 @ 7:56am

    This has been one of the least active congresses in history. Have to do something to fill the time in the day other than think of more way to blame the opposite party for all your woes.

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 8 Jul 2014 @ 7:58am

    Everyone should use this one...

    "Your Honor, I cannot respond to this subpoena. My schedule is 'heavily, and nearly permanently, booked.'"

    reply to this | link to this | view in chronology ]

    • icon
      Vidiot (profile), 8 Jul 2014 @ 8:26am

      Re: Everyone should use this one...

      I can help Mr. Sutter fix that problem!

      His schedule at Lewisburg Federal Penitentiary is guaranteed to be be really, really light.

      You're welcome!

      reply to this | link to this | view in chronology ]

      • identicon
        Michael, 8 Jul 2014 @ 8:32am

        Re: Re: Everyone should use this one...

        Prisoner schedules are pretty filled up, actually:

        7AM wake up
        7:15AM prisoner count
        7:30AM cell inspection
        7:45AM get raped in shower
        8AM breakfast

        reply to this | link to this | view in chronology ]

  • icon
    art guerrilla (profile), 8 Jul 2014 @ 8:06am

    here is why they are ALL scumbags...

    ...with few to ZERO exceptions, NOT ONE kongresskritter is going to make a stink about this, are they ? ? ?

    NOT ONE, even the few who are 'good guys' on this or that particular issue are going to 'embarrass' their fellow scumbags, are they ? ? ?

    tells you all you need to know about 'our' (sic) failed gummint...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Jul 2014 @ 8:54am

    Other source of the data

    It sure is a good thing that there aren't any other agencies recording every electronic transaction and hanging onto it for as long as they want. They then could go back and find the evidence that one party may be trying to hide and blackmail them into doing what they would not normally do...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Jul 2014 @ 8:56am

    No wonder members of Congress don't have time to read the bills they're voting on. They're too busy passing along insider trading information to hedge fund managers.

    reply to this | link to this | view in chronology ]

  • icon
    Padpaw (profile), 8 Jul 2014 @ 9:40am

    treating your constituents like serfs while you act like nobility is not going to end well

    reply to this | link to this | view in chronology ]

  • identicon
    TestPilotDummy, 8 Jul 2014 @ 10:10am

    The Expansion of FT Leavenworth ACT

    Obama has dreamers, but I too have a DREAM...

    The Expansion of FT Leavenworth ACT

    text: Shall the Federal Prison at Ft Leavenworth, Kansas be massively expanded to hold new blocks of known oath breakers?

    impact: will cost big, will essentially level off though, an estimate of how many blocks needed can be determined by PAST DEEDS of officials who broke their oaths. Part of the Labor can be the inmates themselves.

    reply to this | link to this | view in chronology ]

    • identicon
      Digger, 8 Jul 2014 @ 10:14am

      Re: The Expansion of FT Leavenworth ACT

      We don't need a lot of extra prison blocks because most of the oath breakers have committed acts of treason, and since they all claim "we're at war" - guess what the penalty is for treason during war?

      Yup - they basically just signed themselves up for execution.

      Now to perform citizens arrests, file the charges and watch them fall (legally).

      No one is above the law, no one.

      reply to this | link to this | view in chronology ]

  • identicon
    James Fleishman, 8 Jul 2014 @ 10:50am

    Meanwhile guys like me go to prison on BS conspiracy charges

    I am watching this wondering why it is just a civil case. Oh, I know, because the Feds pursuit is insider trading is a jokeThe Feds came after me hard and fast on trumped-up, criminal conspiracy charges along with a parallel civil suit from the SEC who were so lame they actually sent the papers to my neighbor!

    I spent years fighting and went to prison for it. Little guys like me get stomped on in the name of "fair markets". Not one trade was linked to me at my trial and the Feds just got folks to lie on the stand in exchange for probation.

    There is no justice here. Just folks like Preet Bharara making a name for themselves. He and the Feds are running a PR campaign that separated me from my family for years. Of course they are not going to go after congressmen with any real conviction. He will need their help come election time. So when real crimes are committed all we see is ineptitude of the SEC and nothing from the DOJ.

    If you want to know the truth about our "justice" system you can read about it here

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 8 Jul 2014 @ 1:01pm

    That must have been an unpleasant day for them, one of the perks of working for the government is being completely immune from it's laws, to have someone show up who apparently didn't get that memo, and was actually trying to enforce the laws against them... well, that couldn't have been fun at all.

    Of course, and it might just be my cynicism popping up, but I'd say the odds of the SEC actually doing a real investigation, one that could actually end up with people being publicly charged for insider trading, is likely zero to zilch. More likely it's just a show and dance, to show that they're 'serious about cracking down on insider trading', and involving the House is just to add that extra bit of 'realism'.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 8 Jul 2014 @ 4:53pm

    To paraphrase Lisa Simpson...
    DC was founded on a fetid swamp and not much has changed since then.

    reply to this | link to this | view in chronology ]

  • identicon
    robert spano, 9 Jul 2014 @ 9:54am

    what we need is more info on this

    Just ask the NSA - they have everything.

    reply to this | link to this | view in chronology ]

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