6 ms·

They do have to report their positions. Not sure if that's a "restriction" per se, but that is something that insiders have to do as well, and it's something re

They do have to report their positions. Not sure if that's a "restriction" per se, but that is something that insiders have to do as well, and it's something retail traders do not have to do. If they are using insider information so effectively, anyone is free to copy their moves, no? EDIT: That they only report 45 days after the fact is indeed a significant difference from company insiders and severely limits how well someone could profit by following along.

rootusrootus 5y ago
How quickly do they have to report their investment activity? If it's not immediate, then no, anyone is not free to copy their moves.
pfortuny 5y ago
Their moves are known ex post facto.
voisin 5y ago
Not sure about congress but for corporate insiders and major investors the reporting is quarterly so likely not as useful if trading on inside info (which tends to disseminate faster).
hef19898 5y ago
Having worked for a couple of publicly US-listed companies, when you have access to material data you had to adhere to strictly defined trade windows, among a load of other things. Being in Supply Chain, with obvious access to forecasts and inventories, I always fall under insider trading rules. Why law makers would be exempt is beyond me.
- nradov 5y ago
  Law makers are exempt because they made themselves exempt, simple as that.
  - hef19898 5y ago
    Of course they are. I guess that's one of the few cases on which all law makers can agree. Doesn't mean they should be exempt.
  - dsizzle 5y ago
    Not simply "exempt", unless you're referring specifically to the trade window part. There is in fact a law making it illegal to trade on insider information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act Arguably it did not go far enough. I just don't think Congress has much in the way of insider information most of the time. Antitrust litigation would be one example where they do, but what else? Company insiders by contrast almost by definition have insider information.
    - hef19898 5y ago
      One could make the case that the ability to influence the market itself is even more powerful than just knowing some inside data. And we are not even talking about things like defense contracts.
      - mcv 5y ago
        They should recuse themselves from any vote involving an industry that they have a more than trivial amount of stock in. Do you expect someone to restrict Big Tech when they have Facebook and Google stock?
        hef19898 5y ago
        Absolutely not, we are talking about politicians here. I like the idea of divesting into index funds during time in parliament / service.
      - dsizzle 5y ago
        If some Congressperson went short the market and then tanked the market though some statement that would indeed be very bad! Has anything like that ever happened? That would presumably nuke that person's reputation with costs far greater than whatever financial gains could be had. If they're long the market and then boosting the market... I mean, isn't that what we want? You'd have to go further than a blind trust even and ban owning equities at all.
ceejayoz 5y ago
They should have to report their positions well in advance. If I want to buy/sell Boeing stock and I'm a Senator, I should have to publicly file that intention three months in advance, and not be able to undo it. Those filings should immediately be public in a data feed. I'd expect to see a "Congressional stock purchases index fund" arise, and it'd be fascinating to see how it performed. Stuff like https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock-gilead-sciences/index.html https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock... - "oops, forgot to disclose my stock moves for over a year!" - should be punishable by loss of trading ability and confiscation of the assets (not just profits) involved.
- dsizzle 5y ago
  True, in advance would be better. The "Congressional stock purchases index fund" would underperform though https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso... > Academic research revealed that senators' stock purchases underperformed the benchmark during six-month intervals by 17 basis points between 2012 and March 2020
  - ceejayoz 5y ago
    All sorts of trading strategies you could try out on a full, in-advance data feed, though. Only follow the trades of those in leadership, give special attention to transactions involving defense contractors by members of the Committee on Armed Services, etc. I don't doubt that Congress has its share of confident morons to skew the numbers downwards, but you might be able to identify people who somehow manage to make better moves.
- PaulDavisThe1st 5y ago
  Nice idea, but for this to work, you'd also have require that previously announced intended trades MUST be followed through within a given window. Without out, this is way to game stocks without spending anything at all.
  - 5y ago
mschuster91 5y ago
> They do have to report their positions Yeah... 45 days after the trade (per https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso...). Not to mention that both dominant parties don't take their responsibilities seriously (https://www.businessinsider.com/congress-staff-violated-stock-act-conflicts-of-interest-possible-2021-12 https://www.businessinsider.com/congress-staff-violated-stoc...), and that information can be filed on paper so sleuths have a much harder time digging through the data to spot suspicious trades (https://www.opensecrets.org/news/2013/04/action-alert-stock-act-reversal-signed/ https://www.opensecrets.org/news/2013/04/action-alert-stock-...). An effective law would require all elected representatives to identify themselves and their close relatives (i.e. parents, siblings and children) as such to their banks and brokers, with the banks and brokers having to maintain an instant feed exposing all trades executed on the accounts of these people.
Mountain_Skies 5y ago
As a software developer at a law firm, I had to have all of my stock trades pre-approved by the firm just in case there was a conflict, regardless of if I had any actual access to or knowledge of material relevant to the company stock's being traded. Since I invest mostly in indexes, it wasn't much of an issue for me but I had a coworker who had several of his trades blocked without explanation other than there was a conflict. Funny how software developers with no actual access to insider information, just the potential for access, are more restricted than members of Congress who have actual access to such information.
- andybp85 5y ago
  similar situation here, I'm a dev for a major business news company. her comments are brazen at best.
- mistrial9 5y ago
  this rings true for me -- restrictions are placed on those that cannot defend themselves.. all of financial reporting is heading in the wrong direction, due in no small part to the operators of the system, not Mr and Miss Main Street
  - NoGravitas 5y ago
    > Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.

rootusrootus 5y ago

How quickly do they have to report their investment activity? If it's not immediate, then no, anyone is not free to copy their moves.

pfortuny 5y ago

Their moves are known ex post facto.

voisin 5y ago

Not sure about congress but for corporate insiders and major investors the reporting is quarterly so likely not as useful if trading on inside info (which tends to disseminate faster).

hef19898 5y ago

Having worked for a couple of publicly US-listed companies, when you have access to material data you had to adhere to strictly defined trade windows, among a load of other things. Being in Supply Chain, with obvious access to forecasts and inventories, I always fall under insider trading rules. Why law makers would be exempt is beyond me.

nradov 5y ago
Law makers are exempt because they made themselves exempt, simple as that.
- hef19898 5y ago
  Of course they are. I guess that's one of the few cases on which all law makers can agree. Doesn't mean they should be exempt.
- dsizzle 5y ago
  Not simply "exempt", unless you're referring specifically to the trade window part. There is in fact a law making it illegal to trade on insider information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act Arguably it did not go far enough. I just don't think Congress has much in the way of insider information most of the time. Antitrust litigation would be one example where they do, but what else? Company insiders by contrast almost by definition have insider information.
  - hef19898 5y ago
    One could make the case that the ability to influence the market itself is even more powerful than just knowing some inside data. And we are not even talking about things like defense contracts.
    - mcv 5y ago
      They should recuse themselves from any vote involving an industry that they have a more than trivial amount of stock in. Do you expect someone to restrict Big Tech when they have Facebook and Google stock?
      - hef19898 5y ago
        Absolutely not, we are talking about politicians here. I like the idea of divesting into index funds during time in parliament / service.
    - dsizzle 5y ago
      If some Congressperson went short the market and then tanked the market though some statement that would indeed be very bad! Has anything like that ever happened? That would presumably nuke that person's reputation with costs far greater than whatever financial gains could be had. If they're long the market and then boosting the market... I mean, isn't that what we want? You'd have to go further than a blind trust even and ban owning equities at all.

ceejayoz 5y ago

They should have to report their positions well in advance. If I want to buy/sell Boeing stock and I'm a Senator, I should have to publicly file that intention three months in advance, and not be able to undo it. Those filings should immediately be public in a data feed. I'd expect to see a "Congressional stock purchases index fund" arise, and it'd be fascinating to see how it performed. Stuff like https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock-gilead-sciences/index.html https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock... - "oops, forgot to disclose my stock moves for over a year!" - should be punishable by loss of trading ability and confiscation of the assets (not just profits) involved.

dsizzle 5y ago
True, in advance would be better. The "Congressional stock purchases index fund" would underperform though https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso... > Academic research revealed that senators' stock purchases underperformed the benchmark during six-month intervals by 17 basis points between 2012 and March 2020
- ceejayoz 5y ago
  All sorts of trading strategies you could try out on a full, in-advance data feed, though. Only follow the trades of those in leadership, give special attention to transactions involving defense contractors by members of the Committee on Armed Services, etc. I don't doubt that Congress has its share of confident morons to skew the numbers downwards, but you might be able to identify people who somehow manage to make better moves.
PaulDavisThe1st 5y ago
Nice idea, but for this to work, you'd also have require that previously announced intended trades MUST be followed through within a given window. Without out, this is way to game stocks without spending anything at all.
- 5y ago

mschuster91 5y ago

> They do have to report their positions Yeah... 45 days after the trade (per https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso...). Not to mention that both dominant parties don't take their responsibilities seriously (https://www.businessinsider.com/congress-staff-violated-stock-act-conflicts-of-interest-possible-2021-12 https://www.businessinsider.com/congress-staff-violated-stoc...), and that information can be filed on paper so sleuths have a much harder time digging through the data to spot suspicious trades (https://www.opensecrets.org/news/2013/04/action-alert-stock-act-reversal-signed/ https://www.opensecrets.org/news/2013/04/action-alert-stock-...). An effective law would require all elected representatives to identify themselves and their close relatives (i.e. parents, siblings and children) as such to their banks and brokers, with the banks and brokers having to maintain an instant feed exposing all trades executed on the accounts of these people.

Mountain_Skies 5y ago

As a software developer at a law firm, I had to have all of my stock trades pre-approved by the firm just in case there was a conflict, regardless of if I had any actual access to or knowledge of material relevant to the company stock's being traded. Since I invest mostly in indexes, it wasn't much of an issue for me but I had a coworker who had several of his trades blocked without explanation other than there was a conflict. Funny how software developers with no actual access to insider information, just the potential for access, are more restricted than members of Congress who have actual access to such information.

andybp85 5y ago
similar situation here, I'm a dev for a major business news company. her comments are brazen at best.
mistrial9 5y ago
this rings true for me -- restrictions are placed on those that cannot defend themselves.. all of financial reporting is heading in the wrong direction, due in no small part to the operators of the system, not Mr and Miss Main Street
- NoGravitas 5y ago
  > Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.