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.