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Any effort by Congress to police itself is really just political theater for consumption by the unsuspecting voter. How to sidestep this ban? Setup an anonymo

Any effort by Congress to police itself is really just political theater for consumption by the unsuspecting voter. How to sidestep this ban? Setup an anonymous trust or holding company in Wyoming or overseas.

giantg2 2y ago
I thought there was a recent law in the past few years that required any entity holding securities to provide entity ownership data to the SEC.
- jqpabc123 2y ago
  The entity in this case won't necessarily be a typical securities "holding" company. Legally, it may be the owner of the securities. It's possible to make it very difficult to prove who ultimately controls the company.
  - giantg2 2y ago
    Sure, people can lie and commit fraud regardless of the law. The corporate transparency act requires certain reporting of "beneficial ownership".
    - jqpabc123 2y ago
      The corporate transparency act doesn't apply outside the country. Anyone in the world can legally buy US securities. Obscuring ownership and control can be done perfectly legal.
      - giantg2 2y ago
        "Anyone in the world can legally buy US securities." Assuming you aren't sanctioned. "Obscuring ownership and control can be done perfectly legal." Exception the tax fraud part...
0cf8612b2e1e 2y ago
I am curious why it would work this time. The STOCK act was written a decade ago. https://en.m.wikipedia.org/wiki/STOCK_Act https://en.m.wikipedia.org/wiki/STOCK_Act
- delecti 2y ago
  Because this will remove intent and knowledge from consideration. Under the STOCK act, you have to prove they're trading based on non-public information. Under the new bill, they just can't trade stocks, period. Any trading is immediately an offense.
  - tines 2y ago
    I don't know why anyone is talking about insider trading. I don't give a shit if the congresspeople do insider trading. What I care about is that if congresspeople can trade at all, they have a conflict of interest in doing their legislative duties. They are incentivized to pass laws that will benefit corporations and make the stock market rise. That's what is unacceptable about Congress trading. Banning trading totally is the only thing that matters.
greentxt 2y ago
Or speculate on real estate or non-covered securities of which I am sure there are many. Or buy crypto, or Art, or ...
- viraptor 2y ago
  All of those are fine. It's not to prevent them from investing, but to prevent some form of insider trading (does that name still apply for people who know about policy / funding changes ahead of time?)
  - dgfitz 2y ago
    The headline says "bipartisan deal for BAN on stock trading" doesn't it? Inside trading is already notionally illegal, isn't it? Why would this law be trying to re-make insider trading illegal?
    - viraptor 2y ago
      Because we have a good idea of many people abusing the position, just haven't caught anyone red handed. It's a bit like "why have traffic rules that differ for specific places and people if we already made killing others illegal?".
      - dgfitz 2y ago
        What I meant was, insider trading is already illegal. This is allegedly going to make trading itself illegal. What was your point about insider trading?
  - toast0 2y ago
    I wouldn't really put real estate in the group of investments that's OK, depending on details. There's plenty of stories of well-connected people frontrunning government endeavors that require lots of land. Sometimes that has positive results: civic minded person buys up land without raising eyebrows, then sells it to government for a song; sometimes it's negative: less civic minded person buys up land and then sells it to government or others for much more than they purchased it for, in large part because of official decisions they participated in. I know some states have part time legislatures, so the members often have other jobs, but a federal office is a full time job, year round, regardless of recesses. I don't think it's unreasonable to demand that office holders avoid potential conflicts of interest by avoiding any sort of investment outside of personal residences and well diversified mutual funds (and well diversified ETFs). Plus or minus rental housing owned prior to office. It's not that big of an imposition, unless your spouse is an active stock trader (for work or hobby), but in that case... Sometimes you have to make sacrifices for a spouse's career.
lukas099 2y ago
Ideally the legislation would be about the same as for company insiders, no?
orblivion 2y ago
> Any effort by Congress to police itself is really just political theater for consumption by the unsuspecting voter. I heard an interesting proposal to have a bill that grandfathers in sitting members of congress. That way they get credit for changing the system but they don't lose the benefits themselves. It's ugly but it's more likely to eventually get the job done.
- nojvek 2y ago
  Nothing stopping the next congress from reversing it. It's the same deal with supreme court. They call the shots in between the lines.
andrewla 2y ago
I'm doubtful -- this is like saying you can sidestep the law against murder by not getting caught. Obviously some of this will depend on how the legislation is drafted, but there's a difference between whether those actions shield you from prosecution or if they just make it harder to detect. Most likely those sidesteps will be seen for what they are, and when prosecutors become aware of them they will still investigate and prosecute for violating the statute. Under current law there are members of Congress that have been plainly guilty of insider trading and yet prosecutors have declined to prosecute (the article mentions this explicitly for COVID-19 insider trading). It is entirely possible that there will be a lack of prosecutorial enthusiasm, but hopefully this will have a chilling effect on some of the most flagrant cases (cough Pelosi).

giantg2 2y ago

I thought there was a recent law in the past few years that required any entity holding securities to provide entity ownership data to the SEC.

jqpabc123 2y ago
The entity in this case won't necessarily be a typical securities "holding" company. Legally, it may be the owner of the securities. It's possible to make it very difficult to prove who ultimately controls the company.
- giantg2 2y ago
  Sure, people can lie and commit fraud regardless of the law. The corporate transparency act requires certain reporting of "beneficial ownership".
  - jqpabc123 2y ago
    The corporate transparency act doesn't apply outside the country. Anyone in the world can legally buy US securities. Obscuring ownership and control can be done perfectly legal.
    - giantg2 2y ago
      "Anyone in the world can legally buy US securities." Assuming you aren't sanctioned. "Obscuring ownership and control can be done perfectly legal." Exception the tax fraud part...

0cf8612b2e1e 2y ago

I am curious why it would work this time. The STOCK act was written a decade ago. https://en.m.wikipedia.org/wiki/STOCK_Act https://en.m.wikipedia.org/wiki/STOCK_Act

delecti 2y ago
Because this will remove intent and knowledge from consideration. Under the STOCK act, you have to prove they're trading based on non-public information. Under the new bill, they just can't trade stocks, period. Any trading is immediately an offense.
- tines 2y ago
  I don't know why anyone is talking about insider trading. I don't give a shit if the congresspeople do insider trading. What I care about is that if congresspeople can trade at all, they have a conflict of interest in doing their legislative duties. They are incentivized to pass laws that will benefit corporations and make the stock market rise. That's what is unacceptable about Congress trading. Banning trading totally is the only thing that matters.

greentxt 2y ago

Or speculate on real estate or non-covered securities of which I am sure there are many. Or buy crypto, or Art, or ...

viraptor 2y ago
All of those are fine. It's not to prevent them from investing, but to prevent some form of insider trading (does that name still apply for people who know about policy / funding changes ahead of time?)
- dgfitz 2y ago
  The headline says "bipartisan deal for BAN on stock trading" doesn't it? Inside trading is already notionally illegal, isn't it? Why would this law be trying to re-make insider trading illegal?
  - viraptor 2y ago
    Because we have a good idea of many people abusing the position, just haven't caught anyone red handed. It's a bit like "why have traffic rules that differ for specific places and people if we already made killing others illegal?".
    - dgfitz 2y ago
      What I meant was, insider trading is already illegal. This is allegedly going to make trading itself illegal. What was your point about insider trading?
- toast0 2y ago
  I wouldn't really put real estate in the group of investments that's OK, depending on details. There's plenty of stories of well-connected people frontrunning government endeavors that require lots of land. Sometimes that has positive results: civic minded person buys up land without raising eyebrows, then sells it to government for a song; sometimes it's negative: less civic minded person buys up land and then sells it to government or others for much more than they purchased it for, in large part because of official decisions they participated in. I know some states have part time legislatures, so the members often have other jobs, but a federal office is a full time job, year round, regardless of recesses. I don't think it's unreasonable to demand that office holders avoid potential conflicts of interest by avoiding any sort of investment outside of personal residences and well diversified mutual funds (and well diversified ETFs). Plus or minus rental housing owned prior to office. It's not that big of an imposition, unless your spouse is an active stock trader (for work or hobby), but in that case... Sometimes you have to make sacrifices for a spouse's career.

lukas099 2y ago

Ideally the legislation would be about the same as for company insiders, no?

orblivion 2y ago

> Any effort by Congress to police itself is really just political theater for consumption by the unsuspecting voter. I heard an interesting proposal to have a bill that grandfathers in sitting members of congress. That way they get credit for changing the system but they don't lose the benefits themselves. It's ugly but it's more likely to eventually get the job done.

nojvek 2y ago
Nothing stopping the next congress from reversing it. It's the same deal with supreme court. They call the shots in between the lines.

andrewla 2y ago

I'm doubtful -- this is like saying you can sidestep the law against murder by not getting caught. Obviously some of this will depend on how the legislation is drafted, but there's a difference between whether those actions shield you from prosecution or if they just make it harder to detect. Most likely those sidesteps will be seen for what they are, and when prosecutors become aware of them they will still investigate and prosecute for violating the statute. Under current law there are members of Congress that have been plainly guilty of insider trading and yet prosecutors have declined to prosecute (the article mentions this explicitly for COVID-19 insider trading). It is entirely possible that there will be a lack of prosecutorial enthusiasm, but hopefully this will have a chilling effect on some of the most flagrant cases (cough Pelosi).