Congress profits on insider stock trading with immunity

May 26, 2011 06:33


[L]awmakers and their staff members largely have immunity from laws barring trading on insider knowledge that have sent many a private corporate chieftain to prison.

By Valerie RichardsonThe Washington Times

EXCERPTS:

An extensive study released Wednesday in the journal Business and Politics found that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually, suggesting that lawmakers are taking advantage of inside information to fatten their stock portfolios.

“We find strong evidence that members of the House have some type of non-public information which they use for personal gain,” according to four academics who authored the study, “Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives.”

“This is a matter of equality under the law,” Mr. Walz said at the time. “The same standards we have established for Wall Street should apply to Congress. The potential for abuse is obvious and troubling, and there is simply no good reason Congress should get to play by a separate set of rules in the stock market.”

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