Gillibrand: Insider trading exemption "not right"
On the heels of a report by CBS' "60 Minutes" about federal lawmakers' exemption to insider-trading laws, Sen. Kirsten Gillibrand, D-N.Y., said on CBS' "The Early Show" Wednesday that a bill she's introducing to end the exemption would help restore Americans' confidence in Congress.
"The American people don't have a lot of trust in Congress," Gillibrand told "Early Show" anchor Chris Wragge. "They look to Congress, and they know it's broken, and so a measure like this can begin to restore that trust, and I think all of us, it's incumbent upon us to make the kinds of changes that the American people would expect we would make so that we live by the same exact rules that everyone else does."
"60 Minutes": Congress: Trading stock on inside information?
Video: Watch the full "60 Minutes" segment
Video: What counts as "inside information"?
Gillibrand isn't alone in trying to outlaw the exemption, which allows members of Congress to financially gain from non-public information they come across in their official duties. Sen. Scott Brown, R-Mass., introduced a similar bill, called the Stop Trading on Congressional Knowledge, or STOCK, Act, Tuesday.
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(Watch at left a report from Cordes)
Brown's bill would require lawmakers to report transactions of at least $1,000 in bonds, commodities or stocks within 90 days. One difference between the two bills is that Gillibrand's would empower the Securities and Exchange Commission to prosecute lawmakers for insider-trading cases as well as make insider trading against the rules of the House and Senate.
"It's not right for someone who gets access to inside information to be able to profit from that," Gillibrand told Wragge, "and members of Congress have access to a lot of information about different laws that are being written, who will be regulated, who will get certain government contracts, and they should not be able to profit from the position that they hold as a public servant."
House Speaker John Boehner argues there are already guidelines for congressional investments, making a bill like this unnecessary, Cordes reports.
"I have not made any decisions on day-to-day trading activities in my account and haven't for years," Boehner told reporters.
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While some lawmakers trade for their own accounts, others delegate trading to a spouse, stockbroker or financial adviser. A few legislators keep their money in blind trusts and don't know how it's invested.
Jonathan Gillibrand, husband of New York Democratic Sen. Kirsten Gillibrand, made more than 250 transactions in options in his E*Trade account in 2008, when his wife was in the House, according to disclosures.
Almost all the trades were in put options, which convey the right to sell a stock or other instrument at a given price until a given date. At least 34 times, Mr. Gillibrand bought puts on stocks of home builders, including Beazer Homes USA Inc., Hovnanian Enterprises Inc., Meritage Homes Corp. and Ryland Group Inc. These were bets the builder stocks would fall; if they did, the puts' value would rise.
Mr. Gillibrand also bought call options on ProShares UltraShort Real Estate. Although call options are bullish bets, this trade, too, was a bet against the property market, because the ProShares fund is designed to rise $2 for each $1 fall in real-estate stocks. His profit or loss couldn't be determined.
Sen. Gillibrand, in an April 22 news release on White House financial-regulatory proposals, praised the effort to "rein in excessive risk and leverage in the pursuit of short-term profits."
"The senator was referring to activity by some institutions that were leveraging in excess of 20 to one, using taxpayer money on extremely risky short-term bets rather than long-term strategies that benefit the broader economy," said spokesman Matt Canter. Any comparison of those remarks with her husband's trading "is wrong," he said, adding that the senator "was not involved in his trading." Her office declined to make Mr. Gillibrand available for comment.
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Look at the timing and amounts of those trades...
Vote em out! all of them!
Here is a quote from the WSJ
While some lawmakers trade for their own accounts, others delegate trading to a spouse, stockbroker or financial adviser. A few legislators keep their money in blind trusts and don't know how it's invested.
Jonathan Gillibrand, husband of New York Democratic Sen. Kirsten Gillibrand, made more than 250 transactions in options in his E*Trade account in 2008, when his wife was in the House, according to disclosures.
Almost all the trades were in put options, which convey the right to sell a stock or other instrument at a given price until a given date. At least 34 times, Mr. Gillibrand bought puts on stocks of home builders, including Beazer Homes USA Inc., Hovnanian Enterprises Inc., Meritage Homes Corp. and Ryland Group Inc. These were bets the builder stocks would fall; if they did, the puts' value would rise.
Mr. Gillibrand also bought call options on ProShares UltraShort Real Estate. Although call options are bullish bets, this trade, too, was a bet against the property market, because the ProShares fund is designed to rise $2 for each $1 fall in real-estate stocks. His profit or loss couldn't be determined.
Sen. Gillibrand, in an April 22 news release on White House financial-regulatory proposals, praised the effort to "rein in excessive risk and leverage in the pursuit of short-term profits."
"The senator was referring to activity by some institutions that were leveraging in excess of 20 to one, using taxpayer money on extremely risky short-term bets rather than long-term strategies that benefit the broader economy," said spokesman Matt Canter. Any comparison of those remarks with her husband's trading "is wrong," he said, adding that the senator "was not involved in his trading." Her office declined to make Mr. Gillibrand available for comment.
...Sound familiar? Did anyone note that it is a CRIME?
definition and law are 2 different things.
http://www.cbsnews.com/1770-5_162-0.html?query=swipe+fees&tag=srch&searchtype=cbsSearch
Justices, 5-4, Reject Corporate Spending Limit
By ADAM LIPTAK
January 21, 2010
WASHINGTON — Overruling two important precedents about the First Amendment rights of corporations, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations (which includes international corporations) in candidate elections. Will the Supreme Court's campaign finance decision damage democracy?
The 5-to-4 decision was a vindication, the majority said, of the First
Amendment's most basic free speech principle — that the government has no business regulating political speech. The dissenters said that
allowing corporate money to flood the political marketplace would
corrupt democracy.
{ECONOMYSTIC EXTRAORDINAIRE EDITORIAL}
This was the beginning of the END. The Supreme Court ruled that corporations can contribute as much money as they want to any political party, campaign or contender. This started the ball rolling. Even if, as is the revulsion we are witnessing, this could be changed it would literally take an act of congress; however, why would they do that. This ruling put the foxes in charge of the henhouse. In economics we call it an agency problem. Again, this would take legal action to rectify. Do you see THE problem with that?