[zombitack]

Can't they still be prosecuted by the SEC for insider trading? /s

[andrewla]

The SEC can pursue civil action for insider trading, but insider trading is also a criminal offense prosecuted by the various Attorneys General and investigate by law enforcement.

I'm not aware of any successful prosecutions for insider trading for members of Congress; the article does mention the FBI's investigations in the wake of COVID-19 that ended with prosecutors declining to make any charges.

[lukas099]

I know you said /s, but are members of Congress legally "insiders" for companies? I'd think the simplest solution would be to write a law stating that they are, for any company they are writing laws about, considering writing laws about, etc.

[zombitack]

I think they're insiders if they know something's about to happen the general public isn't privy to that will affect the market. I don't think you need to be part of a company to be an insider. For instance, you could be part of a regulatory board knowing you were about to open up restrictions on something that would enable a company to make money in a sector it was previously outlawed from and it would be only natural to invest in that company before the regulatory change went public.

[andrewla]

Anyone who uses material non-public information to trade stocks is guilty of insider trading under current interpretations. If a member of Congress does so then they are also guilty. The question becomes whether you can prove this and whether a jury will convict on it; to date law enforcement has generally declined to prosecute these cases (as mentioned at the end of the article about COVID trading)

The SEC also requires that "insiders" make certain filings well in advance of trading stocks, but that is a separate issue.