6 ms·

Just require them to announce their trades publicly 24 hours in advance. And let them manage their own finances. All these shenanigan's would disappear.

somethoughts 6y ago
Yes - in addition - just have documentation sites like unusual whales which track the trades, holdings and profits of politicians - create infographics prior to every election and distribute them to existing voter information/polling prediction sites like real clear politics. Politicians already long on certain stocks can also profit from legislation that they are passing. Being privy to insider info which leads to continuing to stay long a stock is an advantage that wouldn't be detected by just sharing recent trades. In addition to trying to eradicate insider trading - just shedding light on existing holdings by US office holders will have a huge cleansing effect that will go a long way to showing potential biases/conflicts of interest.
- mikepurvis 6y ago
  I would love to believe that would make a difference, but in a hyperpartisan world where many vote based on a handful of ideological allegiances, how many would seriously be moved to change sides over something as small as a little corruption? Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party? In any case, the Trump movement's whole response to this kind of thing was a combination of denial and "lol everyone does it", and it seems like that was enough for many in that camp.
  - rocqua 6y ago
    There are still voters on the fence / differences in voter turn-out that mean politicians worry about scandal. The main effect is that these politicians will probably be replaced by different ones from the same party. Moreover, other politicians, hoping not to be replaced, might stop doing blatant insider trading.
  - somethoughts 6y ago
    Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party? >> For sure there are many factors that influence someone's vote. I think you're right - its more likely to cause leadership rotation within the parties where the rest of the factors are more similar (i.e. stance on gun rights, etc.). The challenge today is that incumbent politicians within their own party tend to have great name recognition among voters - but are more likely to be in the pockets of corporations. This would enable challengers within the party to potentially have an issue they can highlight. "lol everyone does it" >> And perhaps articles prove in a data science-y way that perhaps this is true - many politicians are doing it.
lend000 6y ago
Why should they be held under less scrutiny than CEO's? They typically have to clear their stock sales with the SEC months in advance.
- somethoughts 6y ago
  That's true too! Finance sites like Marketwatch and Yahoo have insider transaction logs for each company when you search their ticker symbol [1]. There should be a tab to view "US office holder and their immediate relatives" transaction log page as well listed for each ticker. [1] https://finance.yahoo.com/quote/AAPL/insider-transactions/ https://finance.yahoo.com/quote/AAPL/insider-transactions/
- cameronh90 6y ago
  Also as a regular fintech worker, I have to get internal approval from my employer for anything I do. Why can government representatives trade willy nilly without any oversight?
  - BurningFrog 6y ago
    If you wrote the rules for yourself, they would probably be more lenient :)
  - icedchai 6y ago
    Do you actually "have to"? How would they know if you don't? Basically, is it an honor system?
    - FabHK 6y ago
      When I was in that situation, I had to disclose all brokerage accounts to my employer, and authorise the brokers to send copies of the account statements to the employer's compliance department.
    - psychlops 6y ago
      20 years ago it used to be the honor system. Now all the records are connected, many make it a requirement of employment to move all accounts into the firm.
throwawaygh 6y ago
Why not just prohibit members of Congress of owning stock? They are some of the most powerful people in the world. Why is it so much to ask that a Senator or especially Representative serving in the most powerful legislative body in the world just take a cash position for 2-6 years?
- diebeforei485 6y ago
  I agree. Their wealth should be in a blind trust (unless they run the company or farm or whatever).
  - frankfrankfrank 6y ago
    I am not at all opposed to this strategy either, but as you seem to imply, it would really need to be hardened against other corruption and schemes like that the blind trust has to be run by the same government office. It is why I like the fact that they just have to announce their stock trades ahead of time, it still allows them autonomy, but also there is no sense in front running them if they are not trading on insider knowledge. Their performance should essentially be in line with the market, not like Mr. Gottheimer that seems to have tripled his net worth in FY2020.
- klyrs 6y ago
  I fully agree, and I'd like to extend it to their families as well. But... you ask "why not" and the simple reason is that only they could enact such a law. And even when the laws are in place -- Trump ran roughshod over the foreign emoluments clause, and there were zero consequences. Why would the richest and most powerful Democrats set such a precedent, only to have it turned around when they're in power and stand to profit?
  - somethoughts 6y ago
    Yes - it definitely seems like it should be more or a "let's hope we can see both" type thing rather than an "either or type" thing. I think publicizing existing holdings is huge in that it can be done based on existing data sets as unusualwhale has shown and it is something that "we the people" can do, today - perhaps just by sharing this article. Eradicating politicians doing insider trading is a much longer slog that we are mostly just hoping "those with the power" will enact against their own self interests.
m463 6y ago
If I was a foreign government, I would just monitor these announcements and impoverish the US politicians.
- gowld 6y ago
  Good. That will discourage them from manipulating the market. No need for foreign government -- the whole world can do it.
- BurningFrog 6y ago
  If I was a foreign government, I would want to enrich US politicians, so they became favorable to my causes.
toss1 6y ago
Or perhaps better yet, simply make all trades public in real-time. Trades could be scrutinized for insider trading by both the SEC and independent traders/firms, just as there are independent services scrutinizing the crypto blockchains. Insider trading could then even plausibly be legalized by eliminating the advantage of insider trading (it'd have to be based on a lot of study of the data). If we (or other funds) can setup triggers to act on the trades of insiders as soon as they hit the wire, the market will move against them, and we can also share arguably the same advantage by doing so.
gibolt 6y ago
That doesn't work. If they are aware of a huge non-public deal, the market may react based on their trade, but not nearly as much as when the deal goes public.
- psychlops 6y ago
  It would help. There are already funds that track the money of politicians and invest accordingly. If they submitted a large options trade, the funds would front run them and take away much of the profit.
ed_balls 6y ago
Their children or other family would do the deals.
pessimizer 6y ago
https://en.wikipedia.org/wiki/STOCK_Act#Amendment https://en.wikipedia.org/wiki/STOCK_Act#Amendment When the public was angry, Congress passed the STOCK act. After the news cycle was over, they repealed disclosure unanimously.
- djrogers 6y ago
  Disclosure still applies for Congress (and POTUS/VP), it was repealed for 28k other gov't employees. Also, it's mandated 45 days after trades - not in advance as many here are calling for.
  - pessimizer 6y ago
    Not being specific enough made my comment misleading. "The amendment also eliminated the requirement for the creation of searchable, sortable database of information in reports, and the requirement that reports be done in electronic format, rather than on paper."
jokethrowaway 6y ago
There is always a way to circumvent security systems. The only practical solution is having less centralisation of power, so no-one can easily manipulate the market. It's not just Nancy Pelosi, most people in her position would do that. The position of power corrupts people.

somethoughts 6y ago

Yes - in addition - just have documentation sites like unusual whales which track the trades, holdings and profits of politicians - create infographics prior to every election and distribute them to existing voter information/polling prediction sites like real clear politics. Politicians already long on certain stocks can also profit from legislation that they are passing. Being privy to insider info which leads to continuing to stay long a stock is an advantage that wouldn't be detected by just sharing recent trades. In addition to trying to eradicate insider trading - just shedding light on existing holdings by US office holders will have a huge cleansing effect that will go a long way to showing potential biases/conflicts of interest.

mikepurvis 6y ago
I would love to believe that would make a difference, but in a hyperpartisan world where many vote based on a handful of ideological allegiances, how many would seriously be moved to change sides over something as small as a little corruption? Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party? In any case, the Trump movement's whole response to this kind of thing was a combination of denial and "lol everyone does it", and it seems like that was enough for many in that camp.
- rocqua 6y ago
  There are still voters on the fence / differences in voter turn-out that mean politicians worry about scandal. The main effect is that these politicians will probably be replaced by different ones from the same party. Moreover, other politicians, hoping not to be replaced, might stop doing blatant insider trading.
- somethoughts 6y ago
  Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party? >> For sure there are many factors that influence someone's vote. I think you're right - its more likely to cause leadership rotation within the parties where the rest of the factors are more similar (i.e. stance on gun rights, etc.). The challenge today is that incumbent politicians within their own party tend to have great name recognition among voters - but are more likely to be in the pockets of corporations. This would enable challengers within the party to potentially have an issue they can highlight. "lol everyone does it" >> And perhaps articles prove in a data science-y way that perhaps this is true - many politicians are doing it.

lend000 6y ago

Why should they be held under less scrutiny than CEO's? They typically have to clear their stock sales with the SEC months in advance.

somethoughts 6y ago
That's true too! Finance sites like Marketwatch and Yahoo have insider transaction logs for each company when you search their ticker symbol [1]. There should be a tab to view "US office holder and their immediate relatives" transaction log page as well listed for each ticker. [1] https://finance.yahoo.com/quote/AAPL/insider-transactions/ https://finance.yahoo.com/quote/AAPL/insider-transactions/
cameronh90 6y ago
Also as a regular fintech worker, I have to get internal approval from my employer for anything I do. Why can government representatives trade willy nilly without any oversight?
- BurningFrog 6y ago
  If you wrote the rules for yourself, they would probably be more lenient :)
- icedchai 6y ago
  Do you actually "have to"? How would they know if you don't? Basically, is it an honor system?
  - FabHK 6y ago
    When I was in that situation, I had to disclose all brokerage accounts to my employer, and authorise the brokers to send copies of the account statements to the employer's compliance department.
  - psychlops 6y ago
    20 years ago it used to be the honor system. Now all the records are connected, many make it a requirement of employment to move all accounts into the firm.

throwawaygh 6y ago

Why not just prohibit members of Congress of owning stock? They are some of the most powerful people in the world. Why is it so much to ask that a Senator or especially Representative serving in the most powerful legislative body in the world just take a cash position for 2-6 years?

diebeforei485 6y ago
I agree. Their wealth should be in a blind trust (unless they run the company or farm or whatever).
- frankfrankfrank 6y ago
  I am not at all opposed to this strategy either, but as you seem to imply, it would really need to be hardened against other corruption and schemes like that the blind trust has to be run by the same government office. It is why I like the fact that they just have to announce their stock trades ahead of time, it still allows them autonomy, but also there is no sense in front running them if they are not trading on insider knowledge. Their performance should essentially be in line with the market, not like Mr. Gottheimer that seems to have tripled his net worth in FY2020.
klyrs 6y ago
I fully agree, and I'd like to extend it to their families as well. But... you ask "why not" and the simple reason is that only they could enact such a law. And even when the laws are in place -- Trump ran roughshod over the foreign emoluments clause, and there were zero consequences. Why would the richest and most powerful Democrats set such a precedent, only to have it turned around when they're in power and stand to profit?
- somethoughts 6y ago
  Yes - it definitely seems like it should be more or a "let's hope we can see both" type thing rather than an "either or type" thing. I think publicizing existing holdings is huge in that it can be done based on existing data sets as unusualwhale has shown and it is something that "we the people" can do, today - perhaps just by sharing this article. Eradicating politicians doing insider trading is a much longer slog that we are mostly just hoping "those with the power" will enact against their own self interests.

m463 6y ago

If I was a foreign government, I would just monitor these announcements and impoverish the US politicians.

gowld 6y ago
Good. That will discourage them from manipulating the market. No need for foreign government -- the whole world can do it.
BurningFrog 6y ago
If I was a foreign government, I would want to enrich US politicians, so they became favorable to my causes.

toss1 6y ago

Or perhaps better yet, simply make all trades public in real-time. Trades could be scrutinized for insider trading by both the SEC and independent traders/firms, just as there are independent services scrutinizing the crypto blockchains. Insider trading could then even plausibly be legalized by eliminating the advantage of insider trading (it'd have to be based on a lot of study of the data). If we (or other funds) can setup triggers to act on the trades of insiders as soon as they hit the wire, the market will move against them, and we can also share arguably the same advantage by doing so.

gibolt 6y ago

That doesn't work. If they are aware of a huge non-public deal, the market may react based on their trade, but not nearly as much as when the deal goes public.

psychlops 6y ago
It would help. There are already funds that track the money of politicians and invest accordingly. If they submitted a large options trade, the funds would front run them and take away much of the profit.

ed_balls 6y ago

Their children or other family would do the deals.

pessimizer 6y ago

https://en.wikipedia.org/wiki/STOCK_Act#Amendment https://en.wikipedia.org/wiki/STOCK_Act#Amendment When the public was angry, Congress passed the STOCK act. After the news cycle was over, they repealed disclosure unanimously.

djrogers 6y ago
Disclosure still applies for Congress (and POTUS/VP), it was repealed for 28k other gov't employees. Also, it's mandated 45 days after trades - not in advance as many here are calling for.
- pessimizer 6y ago
  Not being specific enough made my comment misleading. "The amendment also eliminated the requirement for the creation of searchable, sortable database of information in reports, and the requirement that reports be done in electronic format, rather than on paper."

jokethrowaway 6y ago

There is always a way to circumvent security systems. The only practical solution is having less centralisation of power, so no-one can easily manipulate the market. It's not just Nancy Pelosi, most people in her position would do that. The position of power corrupts people.