21 ms·

All controversial trades by Senators in the 2020 Congressional insider trading

246 points by chetangoti 5y ago

ta1234567890 5y ago
And nothing will ever come of this
- boublepop 5y ago
  That’s what people said before every single change that ever happened. One thing is for sure, apathy never lead to any change.
- mkhpalm 5y ago
  I like to remind people that its not really illegal if you can't get caught.
- blamazon 5y ago
  2 of the 4 senators in this analysis were voted out of office in 2020. I voted for their replacements because of this bullshit.
williesleg 5y ago
So smart and lucky!
tolbish 5y ago
Historically, what are actual pragmatic ways to bring lawmakers to justice when those lawmakers themselves have made it impossible to improve things by voting?
- rjtavares 5y ago
  I highly recommend Mike Duncan's "Revolutions" podcast, starting with season 3 (the French Revolution). It is really interesting to see how sometimes the even the threat of revolution brings change.
  - jdikatz 5y ago
    Agreed. Currently devouring the Russian revolution series: concrete decisions on reforms are made based on elite opinion of conditions on the ground, and arguments to sway those opinions can turn on seemingly minor events / personalities
- baybal2 5y ago
  > when those lawmakers themselves have made it impossible to improve things by voting? If things can get to this point despite full availability of functioning voting booths, you need to seek the problem with voters themselves. 2020 elections in US were historic because they set a record for the most voted candidate, and the second most voted one at the same time. You know all well who that second most popular candidate was, who didn't make it past the finish line by a shoestring.
  - tolbish 5y ago
    That implies that voting is a fair system and corruption like gerrymandering has no effect.
    - tedunangst 5y ago
      Correct, gerrymandering has no effect on senate races.
      - tolbish 5y ago
        That's not true at all. A lot of Americans vote based on former politicians' recommendations (e.g. endorsements from the president, respresentatives, or other elected officials), or they just vote straight down the party line. In addition to elections themselves, gerrymandering effects the demographic makeup of your region.
        tedunangst 5y ago
        So how should we redraw state lines so that presidential endorsements don't affect gerrymandered senate races?
        tolbish 5y ago
        State lines? No. But there are many ongoing efforts to fight gerrymandering if you are interested. However, that is one piece. I'm not sure how effective that would be in the short/medium term.
- dahfizz 5y ago
  Tarring and feathering used to serve us pretty well.
- craftinator 5y ago
  The French peasantry came up with a method that was effective.
  - tclancy 5y ago
    No one ever credits the Irishman behind it all. Gil O’Tyne.
    - detritus 5y ago
      I actually copied 'Gil O’Tyne' to Google it, then as soon as I pasted it in the search box, realised what a fool I'd been. . And yes, I appreciate that I could have just right-clicked the selection to Google it direct, but my brain doesn't work that way. - ed And I'd write it "Gil O'Teen' which whilst a bit more obvious, is a bit more Irish-looking, rather than the confusing ScotsIrish-Northumbrian name you came up with! :) </reddit>
- creato 5y ago
  Insider trading was already made illegal once: https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act We could just vote for politicians like those that passed that law the first time around. Defeatism in politics is really annoying. The last several (and ongoing) serious attempts at extra-political change in this country are likely the polar opposite of what you want. Be careful what you wish for.
  - tolbish 5y ago
    That's a bit of a nonsensical argument. You fear extra-political change because you assume the worst. And whatever it is you're afraid of, there is more alternatives than that to make change. Aside from that, you suggested voting...which is exactly what was attempted to make insider trading illegal in the first place.
    - creato 5y ago
      > Aside from that, you suggested voting...which is exactly what was attempted to make insider trading illegal in the first place. ... And succeeded. That was the whole point.
- adolph 5y ago
  The better route would be to eliminate the methods that allow injustice. For example, instead of delegating decision authority to a politician retain all decisions as a popular vote in a basket of decisions put to voters at a certain tempo, say weekly. Voting for a politician has too high latency between voter decision and effective decision.
bko 5y ago
I've looked at these data before and I wasn't convinced [0]. Primarily because the amounts were relatively small and even with insider info, it's not easy to forecast stock prices. For instance, take David A Perdue > David Perdue sold 44 times ($3.49 MM) in the 33 days following the closed senate meeting. Interestingly James Inhofe only transacted 8 times but the combined value of shares he sold was a whopping $4.12MM. According to his spreadsheet, Perdue had one sale worth 3MM of CLDX on 1/23/2020 at $86.82 and on 3/23/2021 (?) the spreadsheet states it was $29.49. Today the stock is $98.96, so if he had not sold he'd be up 13%. There's no indication that he bought the stock back. The rest of the trades were a few thousand, which are tiny for someone worth $15MM. You can play all sorts of games when you look at individual trades. I don't think politicians are above reproach, but I think it's incredibly difficult to get some information and be able to execute and time the market. If you told me on January 2020 that there would be a global pandemic for the next 1.5 years, I would never guessed the stock market would be up 15% in 2020! [0] https://mleverything.substack.com/p/analyzing-us-senators-stock-picks-e8106bbbe8e https://mleverything.substack.com/p/analyzing-us-senators-st...
- akiselev 5y ago
  The crime isn't "beating the market," it's "insider trading" because it's supposed to be a level playing field for the good of the system and the people in it. It seems self defeating to decide the fairness of an unfair advantage by whether or not it panned out - which we don't even know. The cohort is so small that there's a fair chance that the (vast, even) majority of Congressmen are really bad at trading, just due to random variation. Who's to say that without that insider information, the politicians wouldn't be homeless? The control group - say, all the people who can but have no chance at entering politics ever - tends to be very, very bad at investing and does worse than the market.
  - gabereiser 5y ago
    Right. It’s not whether he was successful or not, it’s whether he used knowledge not disclosed to the public to make his decisions.
  - bko 5y ago
tedunangst 5y ago
The "nothing ever changes" people are aware Perdue is now a former senator, right?
- deleted 5y ago
  [deleted]
- BuyMyBitcoins 5y ago
  I dare say the underlying issue hasn’t been addressed and Perdue’s loss is due to a confluence of other factors. Most senators get re-elected in each election cycle.
bedhead 5y ago
"Controversial" has no meaning in this context and I dislike the framing. Insider trading is defined as both material and non-public. The notion that a senate briefing about COVID by some random person about their personal opinion on what might happen doesn't even come close to qualifying as material. Nowhere close, not even in the universe of material. People might not like it, but not only were these stock sales 100% legal, they weren't even controversial.
- hartator 5y ago
  The thing they will decide policies that will influence markets. So it’s material and non-public if they make trades before an announcement.
  - kortilla 5y ago
    Nope. That’s not enough. This happens many times a year with company buyouts where many shares are accumulated first, then a buyout is announced, which boosts the share price further.
    - hartator 5y ago
      > This happens many times a year with company buyouts where many shares are accumulated first, then a buyout is announced, which boosts the share price further. That doesn't make it more ethical.
      - kortilla 5y ago
        I don’t think you’ve thought that through. This is how it works for everyone who promotes something they have a vested interest in. Professors who promote their own research programs. Surgeons who come up with new techniques, etc. There is nothing wrong with coming out and saying, “we really like this company so we bought 5% of the shares and intend to take it fully private at $X/share” if the rest of the share holders are interested.
- ProjectArcturis 5y ago
ipaddr 5y ago
It is crazy they allow sitting senators to buy and sell personal stock and then we ask them to make laws that affect stock prices. Force all assets into a blind trust while they are sitting.
- sergiomattei 5y ago
  If you assume the position that politicians are inherently evil, having them do their lucrative activities publicly is better than having things happen under the shadows. The problem is public scrutiny. We don't scrutinize this behavior enough. Where is the outrage?
  - akiselev 5y ago
    Is it? The last four years seemed like impunity under constant scrutiny.
    - dragonwriter 5y ago
      > The last four years seemed like impunity under constant scrutiny. Are you referring to the scandal ridden Administration where many officials went down in disgrace before the Administration itself was defeated?
      - akiselev 5y ago
        That's one way to look at it. My take is that the corruption became so brazen and insidious that the political class had to make some symbolic sacrifices. It's as if we had 100 "[visible] units of corruption" per year before the last administration, with 1 or 2 lost to enforcement or scapegoating and afterwards, we had 200 "units" per year with 10 lost to enforcement or scapegoating. Sure, it went from 1-2% to 5% which is enough to drown out everything else in 24/7 cable newsrooms but in absolute terms, the cost/damage/perception of corruption doubled. (Speaking in abstract terms to illustrate an opinion, not real data)
  - rapind 5y ago
    Why would we assume they are “evil”? We disincentivize bad behaviour (in terms of societal impact) all the time. For example, automotive laws don’t assume all vehicle owners are “evil”.
lgats 5y ago
feed of senate stock disclosures https://sec.report/Senate-Stock-Disclosures https://sec.report/Senate-Stock-Disclosures
boopmaster 5y ago
I know I personally advised friends and colleagues to dump hard somewhere around Feb 22nd, as the spread appeared to be unstoppable. I’ve played pandemic board game, am familiar with the infect cities phase of play. Further, if we held our elected officials to their word there would be considerably more turnover.
- wbc 5y ago
  when did you tell them to buy back?

246 points by chetangoti 5y ago

ta1234567890 5y ago

And nothing will ever come of this

boublepop 5y ago
That’s what people said before every single change that ever happened. One thing is for sure, apathy never lead to any change.
mkhpalm 5y ago
I like to remind people that its not really illegal if you can't get caught.
blamazon 5y ago
2 of the 4 senators in this analysis were voted out of office in 2020. I voted for their replacements because of this bullshit.

williesleg 5y ago

So smart and lucky!

tolbish 5y ago

Historically, what are actual pragmatic ways to bring lawmakers to justice when those lawmakers themselves have made it impossible to improve things by voting?

rjtavares 5y ago
I highly recommend Mike Duncan's "Revolutions" podcast, starting with season 3 (the French Revolution). It is really interesting to see how sometimes the even the threat of revolution brings change.
- jdikatz 5y ago
  Agreed. Currently devouring the Russian revolution series: concrete decisions on reforms are made based on elite opinion of conditions on the ground, and arguments to sway those opinions can turn on seemingly minor events / personalities
baybal2 5y ago
> when those lawmakers themselves have made it impossible to improve things by voting? If things can get to this point despite full availability of functioning voting booths, you need to seek the problem with voters themselves. 2020 elections in US were historic because they set a record for the most voted candidate, and the second most voted one at the same time. You know all well who that second most popular candidate was, who didn't make it past the finish line by a shoestring.
- tolbish 5y ago
  That implies that voting is a fair system and corruption like gerrymandering has no effect.
  - tedunangst 5y ago
    Correct, gerrymandering has no effect on senate races.
    - tolbish 5y ago
      That's not true at all. A lot of Americans vote based on former politicians' recommendations (e.g. endorsements from the president, respresentatives, or other elected officials), or they just vote straight down the party line. In addition to elections themselves, gerrymandering effects the demographic makeup of your region.
      - tedunangst 5y ago
        So how should we redraw state lines so that presidential endorsements don't affect gerrymandered senate races?
        tolbish 5y ago
        State lines? No. But there are many ongoing efforts to fight gerrymandering if you are interested. However, that is one piece. I'm not sure how effective that would be in the short/medium term.
dahfizz 5y ago
Tarring and feathering used to serve us pretty well.
craftinator 5y ago
The French peasantry came up with a method that was effective.
- tclancy 5y ago
  No one ever credits the Irishman behind it all. Gil O’Tyne.
  - detritus 5y ago
    I actually copied 'Gil O’Tyne' to Google it, then as soon as I pasted it in the search box, realised what a fool I'd been. . And yes, I appreciate that I could have just right-clicked the selection to Google it direct, but my brain doesn't work that way. - ed And I'd write it "Gil O'Teen' which whilst a bit more obvious, is a bit more Irish-looking, rather than the confusing ScotsIrish-Northumbrian name you came up with! :) </reddit>
creato 5y ago
Insider trading was already made illegal once: https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act We could just vote for politicians like those that passed that law the first time around. Defeatism in politics is really annoying. The last several (and ongoing) serious attempts at extra-political change in this country are likely the polar opposite of what you want. Be careful what you wish for.
- tolbish 5y ago
  That's a bit of a nonsensical argument. You fear extra-political change because you assume the worst. And whatever it is you're afraid of, there is more alternatives than that to make change. Aside from that, you suggested voting...which is exactly what was attempted to make insider trading illegal in the first place.
  - creato 5y ago
    > Aside from that, you suggested voting...which is exactly what was attempted to make insider trading illegal in the first place. ... And succeeded. That was the whole point.
adolph 5y ago
The better route would be to eliminate the methods that allow injustice. For example, instead of delegating decision authority to a politician retain all decisions as a popular vote in a basket of decisions put to voters at a certain tempo, say weekly. Voting for a politician has too high latency between voter decision and effective decision.

bko 5y ago

I've looked at these data before and I wasn't convinced [0]. Primarily because the amounts were relatively small and even with insider info, it's not easy to forecast stock prices. For instance, take David A Perdue > David Perdue sold 44 times ($3.49 MM) in the 33 days following the closed senate meeting. Interestingly James Inhofe only transacted 8 times but the combined value of shares he sold was a whopping $4.12MM. According to his spreadsheet, Perdue had one sale worth 3MM of CLDX on 1/23/2020 at $86.82 and on 3/23/2021 (?) the spreadsheet states it was $29.49. Today the stock is $98.96, so if he had not sold he'd be up 13%. There's no indication that he bought the stock back. The rest of the trades were a few thousand, which are tiny for someone worth $15MM. You can play all sorts of games when you look at individual trades. I don't think politicians are above reproach, but I think it's incredibly difficult to get some information and be able to execute and time the market. If you told me on January 2020 that there would be a global pandemic for the next 1.5 years, I would never guessed the stock market would be up 15% in 2020! [0] https://mleverything.substack.com/p/analyzing-us-senators-stock-picks-e8106bbbe8e https://mleverything.substack.com/p/analyzing-us-senators-st...

akiselev 5y ago
The crime isn't "beating the market," it's "insider trading" because it's supposed to be a level playing field for the good of the system and the people in it. It seems self defeating to decide the fairness of an unfair advantage by whether or not it panned out - which we don't even know. The cohort is so small that there's a fair chance that the (vast, even) majority of Congressmen are really bad at trading, just due to random variation. Who's to say that without that insider information, the politicians wouldn't be homeless? The control group - say, all the people who can but have no chance at entering politics ever - tends to be very, very bad at investing and does worse than the market.
- gabereiser 5y ago
  Right. It’s not whether he was successful or not, it’s whether he used knowledge not disclosed to the public to make his decisions.
- bko 5y ago

tedunangst 5y ago

The "nothing ever changes" people are aware Perdue is now a former senator, right?

deleted 5y ago
[deleted]
BuyMyBitcoins 5y ago
I dare say the underlying issue hasn’t been addressed and Perdue’s loss is due to a confluence of other factors. Most senators get re-elected in each election cycle.

bedhead 5y ago

"Controversial" has no meaning in this context and I dislike the framing. Insider trading is defined as both material and non-public. The notion that a senate briefing about COVID by some random person about their personal opinion on what might happen doesn't even come close to qualifying as material. Nowhere close, not even in the universe of material. People might not like it, but not only were these stock sales 100% legal, they weren't even controversial.

hartator 5y ago
The thing they will decide policies that will influence markets. So it’s material and non-public if they make trades before an announcement.
- kortilla 5y ago
  Nope. That’s not enough. This happens many times a year with company buyouts where many shares are accumulated first, then a buyout is announced, which boosts the share price further.
  - hartator 5y ago
    > This happens many times a year with company buyouts where many shares are accumulated first, then a buyout is announced, which boosts the share price further. That doesn't make it more ethical.
    - kortilla 5y ago
      I don’t think you’ve thought that through. This is how it works for everyone who promotes something they have a vested interest in. Professors who promote their own research programs. Surgeons who come up with new techniques, etc. There is nothing wrong with coming out and saying, “we really like this company so we bought 5% of the shares and intend to take it fully private at $X/share” if the rest of the share holders are interested.
ProjectArcturis 5y ago

ipaddr 5y ago

It is crazy they allow sitting senators to buy and sell personal stock and then we ask them to make laws that affect stock prices. Force all assets into a blind trust while they are sitting.

sergiomattei 5y ago
If you assume the position that politicians are inherently evil, having them do their lucrative activities publicly is better than having things happen under the shadows. The problem is public scrutiny. We don't scrutinize this behavior enough. Where is the outrage?
- akiselev 5y ago
  Is it? The last four years seemed like impunity under constant scrutiny.
  - dragonwriter 5y ago
    > The last four years seemed like impunity under constant scrutiny. Are you referring to the scandal ridden Administration where many officials went down in disgrace before the Administration itself was defeated?
    - akiselev 5y ago
      That's one way to look at it. My take is that the corruption became so brazen and insidious that the political class had to make some symbolic sacrifices. It's as if we had 100 "[visible] units of corruption" per year before the last administration, with 1 or 2 lost to enforcement or scapegoating and afterwards, we had 200 "units" per year with 10 lost to enforcement or scapegoating. Sure, it went from 1-2% to 5% which is enough to drown out everything else in 24/7 cable newsrooms but in absolute terms, the cost/damage/perception of corruption doubled. (Speaking in abstract terms to illustrate an opinion, not real data)
- rapind 5y ago
  Why would we assume they are “evil”? We disincentivize bad behaviour (in terms of societal impact) all the time. For example, automotive laws don’t assume all vehicle owners are “evil”.

lgats 5y ago

feed of senate stock disclosures https://sec.report/Senate-Stock-Disclosures https://sec.report/Senate-Stock-Disclosures

boopmaster 5y ago

I know I personally advised friends and colleagues to dump hard somewhere around Feb 22nd, as the spread appeared to be unstoppable. I’ve played pandemic board game, am familiar with the infect cities phase of play. Further, if we held our elected officials to their word there would be considerably more turnover.

wbc 5y ago
when did you tell them to buy back?