Curbing Insider Trading In Congress
Image Source: Politico
By: Michael Argenta
February 13, 2022
On January 26, 2012, the STOCK Act was introduced in Congress. Later that year, former President Barack Obama signed it into law. This law aimed to prohibit the use of non-public information for personal profit, including insider trading of stocks by government officials. However, in 2020, when Congress was briefed on the potential effects of COVID-19, many members sold and purchased stock.
While every member of Congress was not involved in this scandal, it certainly raised questions. When the stock market crashed on February 20, 2020, most Congress members were safe while regular citizens worried about the future of their investments. This initiated an investigation into transactions on and before March 30, 2020, to see if the STOCK Act was violated. However, once concluded, no charges were brought and the investigation was closed.
This matter is far from over. There is a heavy push in Congress to ban stock trading among members. Speaker of the House, Nancy Pelosi, recently said that progress is being made to stop insider trading in Congress: but also wants to put the same pressure on the Supreme Court. Currently, the Supreme Court has no monitoring systems to curb insider trading within. Previously, Pelosi was widely against this issue as a beneficiary of stock through her husband, Paul. Now, she has changed course.
As an ongoing issue, this will be very interesting to follow. If a ban or better auditing of government officials is enacted, this will be in the best interest of all. A January poll showed that general members of both political parties are highly in favor of this idea because of its fairness. No one should be allowed to profit off of secret knowledge. Especially not those elected to positions of power.