(a) elected officials could hold only cash, bonds, and index funds, specifically bonds and index funds that are open the general public and have at least $XX assets, to prevent engineering an index fund available only one one or a few people.
(b) pay them better to make up for the loss of gravy. Sure, the pay raise would not be sufficient to make up for the lost income, but it should be high enough that none of them could complain they can't live on the salary. Paying the senate majority leader under $200K / year is not enough, considering they often have living expenses in Washington and their home state. Lower ranking members get paid less. Pay the leader $1M/year and everyone else $500K/year and then prohibit anything but vanilla investments.
Unfortunately -- correct me if I'm wrong -- the calendar day selected isn't the day stocks were traded, but rather reported, which can be up to 45 days after a trade? [1] E.g. today's date (Apr 10) shows trades that happened on March 9, 20, and 25.
So very cool for transparency, but of zero utility for anyone trying to either duplicate a trading strategy, or trying to suss out in advance what senators know that we don't. :(
If historical data is available, an aggregated result of this could be compared to the S&P index. To see if their trades actually outperform and therefore if they a better traders than average, and if so, this might mean they have better info.
In 2011, "60 Minutes" reported that members of Congress could legally trade stock based on non-public information from Capitol Hill. video [0], write-up [1]
The Senate is part of Congress but The House doesn't disclose trades. The Stock Act of 2012 prohibits insider trading for the Senate and provides that trades are disclosed, which is why the data is available for that branch.
The STOCK Act (or Ethics in Government Act, actually) only requires reporting within 30-45 days of purchase/sale, so your fund will lag behind whatever market-moving events they're trading on.
I think the site is definitely a good start. I would like to see accumulated data and charting. Which stocks have been bought and sold by week or month, etc.
A question to people who might pay more attention to the functioning of Congress than me: Is much of their day-to-day business actually secret? If Congress is about to pass a bill which will benefit company X, can't we all go on to the House or Senate web sites and read the drafts of those bills and have the same "insider information" that they do? Are we just mad that they're paying more attention to what they themselves are doing and how it will benefit certain companies' stocks than normal people who have better things to do with their lives than track what Congress is debating from day to day?
> can't we all go on to the House or Senate web sites and read the drafts of those bills and have the same "insider information" that they do?
The published drafts are days behind what's being circulated; you can see this every time there's an emergency bill, it's often voted on almost simultaneously with the final text being released. Sometimes, there's a reading of the bill, if people push the right procedural buttons.
Regardless, insider trading on delayed information isn't nearly as good as insider trading on current information (probably? I don't have experience with insider trading :)
Congressmembers have access to the information earlier than the public. For example, Senator A may be reading a private draft of Bill B, which he expects will benefit the stock price of Company C, so he buys shares of C now at $50, unveils the legislation in a week which pushes the price up to $75, and passes the legislation the next week pushing the price up to $100. So the insider-trading Congressman gets a $50/share profit, while someone who was diligently watching the hill would only be able to act from the public release of the legislation and capture a $25/share profit.
Most of the actual negotiations do happen behind closed doors, and there are likely many times during their term when a congressperson would know of market-moving macroeconomic news before it's been publicly disclosed.
> It shall be unlawful for any person to obtain or use a report:
for any unlawful purpose;
for any commercial purpose, other than by news and communications media for dissemination to the general public;
Welp, looks like trying to actually trade on this information is illegal.
I wonder if it makes sense to forbid members of congress from owning anything other than a narrow class of investments (for example homes and index funds, though I'm surely missing many).
This sounds like the old "cut their pay!" argument. The rejoinder to that argument is that it should be practical for people who aren't already wealthy to hold office, and a low salary would hurt that.
This is different because the hit to potential earnings from restriction to a basic generic portfolio seems small (maybe not relative to the upside from insider trading, but to what members of congress would make as average citizens). Heck, it's still possible to trade in index funds off insider information. But the advantage seems smaller.
No need to limit asset classes, this is the problem blind trusts are designed to solve. It's the tool that anyone who wants to avoid the appearance of impropriety uses.
I wonder if openness of this information can lead to a senator just front running the watchers by creating 'vibes' when none exist. so they can buy a moderately in-news stock and declare it immediately. then sell it after the run up. or vice-versa with shorts.
in fact they can disclose favorable news immediately and wait for 30days to disclose unloading the position till the fervor has died off.
Yes this is something that needs to be looked at more. How much does their wealth grow from the time they enter to the time they exit congress. Some politicians seem to get very wealthy while in congress.
“You can’t get rich in politics unless you’re a crook.”
The more resources we spend fighting “insider trading” the more valuable people who have found loopholes or ways not to get caught. It’s a never ending losing game. I’d rather make all trades public than ban “insider” trading.
God damn, there is no way this is anything other than just brazenly obvious insider trading. Completely unethical. Our representatives are complete and utter scumbags.
Needless to say, this should be illegal. I honestly wish we could retroactively imprison them for doing this.
The current state of the U.S. is so damn embarrassing and shameful. I literally cringe when I imagine internationals seeing what we do here.
That was a biotech stock. They are very volatile. If he held long term he would've done much better. If you search for FDA catalyst dates, you can find dates when drugs are going to be approved or denied, etc. It's like a coin flip.
Plenty of traders speculate in stocks. These sorts of trades should be reviewed but aren’t really that suspicious. I wouldn’t call this “suspected insider trading” without actual evidence.
I'd like to see someone dig up all the most egregious examples of suspected insider trading here and post it in the relevant voter guides for each member's reelection.
Ok this is really awesome. Now if you would just go ahead and create an API for this, so I can set my TD Ameritrade to trigger trades off of this information, that would be great.../s
The general public doesn't have great trading strategies, but Senators may be more well informed. I wonder how a bot based off of their trades would do.
I suspect they're sophisticated enough to turn something like an "index fund of what the people in charge buy" into a profit by making sure the timing of the reporting makes it more profitable for them.
Since the reporting isn't instantaneous, they of course also have insider knowledge of their own trades and that those trades would influence markets and when. They could screw around with the timing of trades to give misleading stories, like selling off a bunch of stuff just before they file a report and then buying it after their action tanks the price.
But a virtual index fund that tracked their purchases and sales to make a record of how well Senators do in the stock market compared to an index fund (which I believe are also run by well informed people)? That might shame them into changing the rules if it looks bad. Of course, I don't know enough to say they aren't behaving themselves.
Some cases that look suspicious might, when taken as a whole with their other trades, average out and make clear that they lose money even when they have insider knowledge that they will lose money. Somehow I doubt that, but if it's truly a blind trust or an independent fund it should be true and would increase faith in our elected officials to see hard data for.
I'd like something like this in Australia, targeting real estate speculation which is probably our largest single source of corruption at all governmental levels.
The US polity though seems too deeply corroded for transparency to be more than a minor (albeit positive) tweak.
This would be much more useful if you could tell which senator was actually making the trading decsions, vs having trades made on their behalf in a blind trust. The situations are very different in terms of potential abuse of inside information
[+] [-] tasty_freeze|5 years ago|reply
(a) elected officials could hold only cash, bonds, and index funds, specifically bonds and index funds that are open the general public and have at least $XX assets, to prevent engineering an index fund available only one one or a few people.
(b) pay them better to make up for the loss of gravy. Sure, the pay raise would not be sufficient to make up for the lost income, but it should be high enough that none of them could complain they can't live on the salary. Paying the senate majority leader under $200K / year is not enough, considering they often have living expenses in Washington and their home state. Lower ranking members get paid less. Pay the leader $1M/year and everyone else $500K/year and then prohibit anything but vanilla investments.
[+] [-] crazygringo|5 years ago|reply
Unfortunately -- correct me if I'm wrong -- the calendar day selected isn't the day stocks were traded, but rather reported, which can be up to 45 days after a trade? [1] E.g. today's date (Apr 10) shows trades that happened on March 9, 20, and 25.
So very cool for transparency, but of zero utility for anyone trying to either duplicate a trading strategy, or trying to suss out in advance what senators know that we don't. :(
[1] https://en.wikipedia.org/wiki/STOCK_Act
[+] [-] stephenmc|5 years ago|reply
[+] [-] Gys|5 years ago|reply
[+] [-] throw2945015|5 years ago|reply
In 2011, "60 Minutes" reported that members of Congress could legally trade stock based on non-public information from Capitol Hill. video [0], write-up [1]
[0] https://www.youtube.com/watch?v=2zh30lm7aSQ
[1] https://www.cbsnews.com/news/congress-trading-stock-on-insid...
[+] [-] noitsnot|5 years ago|reply
https://en.wikipedia.org/wiki/STOCK_Act
[+] [-] mulmen|5 years ago|reply
[+] [-] A4ET8a8uTh0|5 years ago|reply
[+] [-] mattkrause|5 years ago|reply
[+] [-] noitsnot|5 years ago|reply
[+] [-] Cyberdog|5 years ago|reply
[+] [-] toast0|5 years ago|reply
The published drafts are days behind what's being circulated; you can see this every time there's an emergency bill, it's often voted on almost simultaneously with the final text being released. Sometimes, there's a reading of the bill, if people push the right procedural buttons.
Regardless, insider trading on delayed information isn't nearly as good as insider trading on current information (probably? I don't have experience with insider trading :)
[+] [-] kingbirdy|5 years ago|reply
[+] [-] rrrrrrrrrrrryan|5 years ago|reply
[+] [-] bognition|5 years ago|reply
Welp, looks like trying to actually trade on this information is illegal.
Feels like a double standard.
[+] [-] toyg|5 years ago|reply
[+] [-] papeda|5 years ago|reply
This sounds like the old "cut their pay!" argument. The rejoinder to that argument is that it should be practical for people who aren't already wealthy to hold office, and a low salary would hurt that.
This is different because the hit to potential earnings from restriction to a basic generic portfolio seems small (maybe not relative to the upside from insider trading, but to what members of congress would make as average citizens). Heck, it's still possible to trade in index funds off insider information. But the advantage seems smaller.
[+] [-] bmm6o|5 years ago|reply
[+] [-] DesiLurker|5 years ago|reply
in fact they can disclose favorable news immediately and wait for 30days to disclose unloading the position till the fervor has died off.
[+] [-] kyleblarson|5 years ago|reply
[+] [-] erentz|5 years ago|reply
“You can’t get rich in politics unless you’re a crook.”
[+] [-] nightski|5 years ago|reply
[+] [-] blast|5 years ago|reply
[+] [-] seibelj|5 years ago|reply
The more resources we spend fighting “insider trading” the more valuable people who have found loopholes or ways not to get caught. It’s a never ending losing game. I’d rather make all trades public than ban “insider” trading.
[+] [-] nicota|5 years ago|reply
https://efdsearch.senate.gov/search/view/paper/82AAE77A-D129... (you have to agree to the terms first)
Unless I misunderstood something, looks like Mark Begich bought KERX stock on 01/28/2013 for 1001$-15000$, sold at 01/30/2013 for 15001$-50000$.
KERX closing price on 01/28/2013 was 6.06, and 8.49 2 days later... Verified by looking at charts in https://www.barchart.com/stocks/quotes/KERX/interactive-char...
[+] [-] fragsworth|5 years ago|reply
Needless to say, this should be illegal. I honestly wish we could retroactively imprison them for doing this.
The current state of the U.S. is so damn embarrassing and shameful. I literally cringe when I imagine internationals seeing what we do here.
[+] [-] icedchai|5 years ago|reply
[+] [-] CapriciousCptl|5 years ago|reply
[+] [-] intrepidhero|5 years ago|reply
[+] [-] tcarambat1010|5 years ago|reply
Thanks for everyone's support and appreciation.
[+] [-] cco|5 years ago|reply
[+] [-] heyoni|5 years ago|reply
[+] [-] croshan|5 years ago|reply
[+] [-] neltnerb|5 years ago|reply
Since the reporting isn't instantaneous, they of course also have insider knowledge of their own trades and that those trades would influence markets and when. They could screw around with the timing of trades to give misleading stories, like selling off a bunch of stuff just before they file a report and then buying it after their action tanks the price.
But a virtual index fund that tracked their purchases and sales to make a record of how well Senators do in the stock market compared to an index fund (which I believe are also run by well informed people)? That might shame them into changing the rules if it looks bad. Of course, I don't know enough to say they aren't behaving themselves.
Some cases that look suspicious might, when taken as a whole with their other trades, average out and make clear that they lose money even when they have insider knowledge that they will lose money. Somehow I doubt that, but if it's truly a blind trust or an independent fund it should be true and would increase faith in our elected officials to see hard data for.
[+] [-] foobarian|5 years ago|reply
[+] [-] crispinb|5 years ago|reply
The US polity though seems too deeply corroded for transparency to be more than a minor (albeit positive) tweak.
[+] [-] surfmike|5 years ago|reply
https://en.m.wikipedia.org/wiki/STOCK_Act
[+] [-] ghufran_syed|5 years ago|reply