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> That same day, while the stock market remained lofty, Dr. Auchincloss reported selling $15,001 to $50,000 of a stock mutual fund. Days later he sold two more

> That same day, while the stock market remained lofty, Dr. Auchincloss reported selling $15,001 to $50,000 of a stock mutual fund. Days later he sold two more mutual funds and a stock > Dr. Auchincloss disclosed six sales of mutual funds that day, totaling between $111,006 and $315,000 in value. And > The rate cuts hadn’t immediately calmed investors. Stock trading was halted for 15 minutes on the morning of March 16 when the S&P 500 fell 7%, triggering a so-called circuit breaker. The index staggered to the closing bell, down 12%. > That same day, Ms. Chao, the transportation secretary, made three purchases in stock funds that track the S&P 500 and the U.S. stock market broadly, totaling between $600,003 and $1.2 million, according to her financial disclosures. Every time I click on one of these articles, I expect to find some individual stock trading related to specific companies on the receiving end of government action. However, when it ends up being vague examples of officials buying and selling broad-market or S&P index funds, it's much harder to see where the "insider trading" angle comes from. Especially when we have examples of officials trading in March, a full month after the viral panic had already spread through even public forums like Twitter. The line needs to be drawn somewhere, and I'm not convinced that forbidding public officials from buying and selling generic index and mutual funds is really that big of a concern, IMO. Now if someone can find evidence of government officials buying something like Moderna stock ahead of the FDA approval, then by all means let's prosecute with stiff consequences.

selectodude 4y ago
If you know about an imminent bill that, say, is going to inject fiscal stimulus to the tune of 10 percent of GDP and will reverse those stock market declines and then some, that's a pretty big reason to trade.
- googlryas 4y ago
  Wouldn't you leverage up e.g. with options though, instead of just buying stock?
fnikacevic 4y ago
It's not strictly about actual unethical behavior. It's also about not ever creating the appearance of unethical behavior which erodes trust in government institutions. It's half of any ethics course on the job. My friend who is a lowly public servant is not allowed to hold anything besides index/mutual funds already and has to report any trades of those before they happen. This is for an individual with no tangible insider info. Elected officials with significant insider info need to be held to a much higher standard.
- akira2501 4y ago
  The USPS made this abundantly clear if you worked there in the 1990s: "The appearance of impropriety is just as bad as impropriety itself."
  - deleted 4y ago
    [deleted]
- hammock 4y ago
  https://www.luc.edu/media/lucedu/law/students/publications/llj/pdfs/moore_appearance.pdf https://www.luc.edu/media/lucedu/law/students/publications/l...
karmelapple 4y ago
Some Congress members didn't even want the STOCK bill of 2012 to pass, including Senator Burr: https://www.forbes.com/sites/jackkelly/2020/03/20/senators-accused-of-insider-trading-dumping-stocks-after-coronavirus-briefings/?sh=25b6d3ac4a45 https://www.forbes.com/sites/jackkelly/2020/03/20/senators-a... (Other Congresspeople didn't support it, and also appear guilty of doing something with privileged knowledge, but I'd like to just focus on one person of note) Senator Burr was accused of behaving badly: https://www.politico.com/news/2020/03/21/coronavirus-trading-house-senate-140260 https://www.politico.com/news/2020/03/21/coronavirus-trading... And as of this year, unsealed FBI docs show he sold a bunch of stock: https://www.cnbc.com/2022/09/06/unsealed-fbi-docs-reveal-a-flurry-of-calls-amid-burrs-stock-trades.html https://www.cnbc.com/2022/09/06/unsealed-fbi-docs-reveal-a-f... As far as I can tell, it did indeed involve individual stock purchases. As the article says: > According to the FBI, “As a result of Senator Burr’s sales on February 13, 2020, his portfolio went from approximately 83% in equities to approximately 3% in equities.” So... as far as I can tell, this absolutely has happened. And although Senator Burr and other officials didn't officially get charged, I would very much like to stop this behavior. When you get elected, you simply give up the ability to own and trade certain things, because you just have too much knowledge and power. Serving your fellow country people should be the bonus reward beyond a salary, not some stock trades.
insanitybit 4y ago
I mostly agree, but we only know a fraction of what the officials know. We wouldn't be able to tie purchases/sales to classified information for decades. The simplest solution is to have government officials engage in scheduled, double blind funds. They commit X dollars per month for N months, and they can only change the schedule with due notice of N months. This is, to my knowledge, largely how executives handle the stock that they own, they have scheduled pre-arranged buys/sales, though with the government it has to be a bit broader (there's no such thing as blackout periods etc, they always have insider information). I do believe that officials should be allowed to engage in the market given those restrictions. You need options like this to avoid abuse (a system that works well enough will keep most from trying to get around it) and you need options like this because otherwise you make politics a game for the rich (even more than it already is).

selectodude 4y ago

If you know about an imminent bill that, say, is going to inject fiscal stimulus to the tune of 10 percent of GDP and will reverse those stock market declines and then some, that's a pretty big reason to trade.

googlryas 4y ago
Wouldn't you leverage up e.g. with options though, instead of just buying stock?

fnikacevic 4y ago

It's not strictly about actual unethical behavior. It's also about not ever creating the appearance of unethical behavior which erodes trust in government institutions. It's half of any ethics course on the job. My friend who is a lowly public servant is not allowed to hold anything besides index/mutual funds already and has to report any trades of those before they happen. This is for an individual with no tangible insider info. Elected officials with significant insider info need to be held to a much higher standard.

akira2501 4y ago
The USPS made this abundantly clear if you worked there in the 1990s: "The appearance of impropriety is just as bad as impropriety itself."
- deleted 4y ago
  [deleted]
hammock 4y ago
https://www.luc.edu/media/lucedu/law/students/publications/llj/pdfs/moore_appearance.pdf https://www.luc.edu/media/lucedu/law/students/publications/l...

karmelapple 4y ago

Some Congress members didn't even want the STOCK bill of 2012 to pass, including Senator Burr: https://www.forbes.com/sites/jackkelly/2020/03/20/senators-accused-of-insider-trading-dumping-stocks-after-coronavirus-briefings/?sh=25b6d3ac4a45 https://www.forbes.com/sites/jackkelly/2020/03/20/senators-a... (Other Congresspeople didn't support it, and also appear guilty of doing something with privileged knowledge, but I'd like to just focus on one person of note) Senator Burr was accused of behaving badly: https://www.politico.com/news/2020/03/21/coronavirus-trading-house-senate-140260 https://www.politico.com/news/2020/03/21/coronavirus-trading... And as of this year, unsealed FBI docs show he sold a bunch of stock: https://www.cnbc.com/2022/09/06/unsealed-fbi-docs-reveal-a-flurry-of-calls-amid-burrs-stock-trades.html https://www.cnbc.com/2022/09/06/unsealed-fbi-docs-reveal-a-f... As far as I can tell, it did indeed involve individual stock purchases. As the article says: > According to the FBI, “As a result of Senator Burr’s sales on February 13, 2020, his portfolio went from approximately 83% in equities to approximately 3% in equities.” So... as far as I can tell, this absolutely has happened. And although Senator Burr and other officials didn't officially get charged, I would very much like to stop this behavior. When you get elected, you simply give up the ability to own and trade certain things, because you just have too much knowledge and power. Serving your fellow country people should be the bonus reward beyond a salary, not some stock trades.

insanitybit 4y ago

I mostly agree, but we only know a fraction of what the officials know. We wouldn't be able to tie purchases/sales to classified information for decades. The simplest solution is to have government officials engage in scheduled, double blind funds. They commit X dollars per month for N months, and they can only change the schedule with due notice of N months. This is, to my knowledge, largely how executives handle the stock that they own, they have scheduled pre-arranged buys/sales, though with the government it has to be a bit broader (there's no such thing as blackout periods etc, they always have insider information). I do believe that officials should be allowed to engage in the market given those restrictions. You need options like this to avoid abuse (a system that works well enough will keep most from trying to get around it) and you need options like this because otherwise you make politics a game for the rich (even more than it already is).