Tag: Insider trading

Insiders

Are you angry at Congress? Get angrier, my friends:

Peter Schweizer is a fellow at the Hoover Institution, a conservative think tank at Stanford University. A year ago he began working on a book about soft corruption in Washington with a team of eight student researchers, who reviewed financial disclosure records. It became a jumping off point for our own story, and we have independently verified the material we’ve used.

Schweizer says he wanted to know why some congressmen and senators managed to accumulate significant wealth beyond their salaries, and proved particularly adept at buying and selling stocks.

You know where this is going, don’t you? Congressmen of both parties have engaged in massive insider trading — swapping health stocks during the healthcare debate, shorting banks stocks when they were warned of the pending financial meltdown, buying up land right before a road is scheduled to be built.

The thing is, as Stephen Bainbridge and Walter Olson have noted, this is all perfectly legal. Congress is not bound by insider trading laws nor are they obligated to put their funds in blind trusts. They can even be given IPOs.

And former House Speaker Nancy Pelosi and her husband have participated in at least eight IPOs. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House. Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House.

Efforts to fix this have gone nowhere fast, with both parties. But it gets worse:

In the past few years a whole new totally unregulated, $100 million dollar industry has grown up in Washington called political intelligence. It employs former congressmen and former staffers to scour the halls of the Capitol gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it.

I said it before and I’ll say it again: if OWS really opposes corruption and corporatism, they should occupy Washington. Let’s see how much sympathy the Democrats have for the movement when it’s taking dumps in their yard.