Thursday, October 14, 2010

Should Congress Be Subject to Insider Trading Rules?

Via The Atlantic (T/Y Securities Docket).
[...] Despite WSJ's effort, it doesn't appear to have identified a mountain of evidence that Congressional staffers have been taking advantage of their insider knowledge. He said he would be fine with legislation to prevent it, but doesn't see a scandal here.
Moreover, today, more than ever, Washington is heavily involved with the private sector. In the latest legislative session alone we've seen aggressive regulation of the health care industry, the credit card industry, and banks. We've seen firms like Fannie Mae and GM bailed out, which would almost certainly have failed otherwise. Let's say a staffer were to have learned of an amendment to the health care reform bill that would adversely affect pharmaceuticals. Should she be allowed to sell short shares in Pfizer before the public learns about this amendment? Of course not. So there should be a law against it.
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