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Hawley and Democrats vote to advance congressional stock trading ban

191 points by hhs 1y ago

aurareturn 1y ago
"He made a reference to billionaires, okay?" Scott said of Hawley. "I don't know when in this country it became a negative to make money. But somehow, if you've made money, you're supposedly — I think Senator Hawley suggests — you shouldn't be serving, because you might trade stocks." "Anybody want to be poor? I don't." Scott continued. "Right? So this idea that we're going to attack people because they make money is wrong. Is absolutely wrong. We should cherish all of our different backgrounds. ... So, I think it's disgusting what is going on here." This is Republican Sen. Rick Scott by the way. Seems like he's using some form ad hominem to distract from the actual purpose. The purpose is not to prevent congress from getting rich. The purpose is to remove conflict of interest. Congress can have insider info on individual stocks. For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info. I think only allowing congress members to buy and sell index funds is fine. Not individual stocks. Or if they want to trade individual stocks, make them declare 1 month earlier and make it public.
- zdragnar 1y ago
  What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades. Sensor Scott opposes the blanket ban because insider trading is already illegal, and thus the ban makes punishable otherwise entirely legal behavior. And he's right- it isn't, and shouldn't be, illegal or considered wrong to be successful, if done the right way. There's a middle ground somewhere in there I'm sure, but given how suspiciously well some members of Congress have done, and how there's been seemingly not enough accountability of it, I'm not terribly empathetic.
  - potato3732842 1y ago
    >What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades. It speaks volumes about the relationship between the government and the people that they nailed Martha for (a bullshit follow on charge stemming from an investigation into) a small time variant of basically the same thing. Like how if the police shoot your dog it's just property but you shoot one of theirs and well you might as well shoot the officer too because it's another count of the same crime. Goddamn double standards everywhere. What ever happened to equality under the law?
  - marcusb 1y ago
    > There's a middle ground somewhere in there I'm sure The parent commenter pointed out the middle ground: > I think only allowing congress members to buy and sell index funds is fine.
    - Uvix 1y ago
      That’s not a middle ground; index funds are profitable based on the country’s success, not the trader’s. And you don’t get that same dopamine hit as gambling. They’re the smarter place for people to put their money but I wouldn’t consider them a comparable product.
      - willvarfar 1y ago
        Perhaps Congress have a way of influencing the country's success in a way that Uvix can't? If congress has to bet on the overall economy instead of e.g. spotting that riot gear providers goes up when country goes down, that would be a good thing?
      - marcusb 1y ago
        Yes, it is a middle ground. The extreme positions here are "no equity ownership, directly or indirectly" and "no trading restrictions at all." Allowing index fund purchases is squarely in the middle of that continuum. Additionally, your description of how people purchase and make money on indexes funds is incomplete at best. Really, it's just factually incorrect in that it presumes a certain purchase strategy. People do short-term, dopamine-inducing trades of index funds all the time. But, I don't think elected representatives should be able to do that, either. At the very least, successful short term trading - directly or through an advisor, of an individual security or a fund - creates the appearance of impropriety.
  - cmiles74 1y ago
    It's very difficult to get caught, and then to prove wrongdoing, under the current rules. There has already been reporting of filing irregularities. https://www.newsweek.com/stock-act-congress-violations-trading-shares-1947459 https://www.newsweek.com/stock-act-congress-violations-tradi... Making the rules simpler will make it easier to comply. Removing the incentive for insider trades strikes me as a good thing.
  - Atreiden 1y ago
    Some jobs place restriction on your ability to trade individual stocks - I discovered this when I went to work at an investment management firm. This was a policy applied to all people that worked there. I see no reason not to do the same thing for Congress. The legal space is well-traveled and the fundamental concern - namely, the perverse incentives resulting from asymmetric access to valuable information - is present in Congress the esame way as in a sizable investment firm. Index funds and mutual funds are often exempt or subject to less scrutiny, and that could be here too.
  - kasey_junk 1y ago
    I run the numbers every couple of years and I’ve never had a year that shows individual Congress people are particularly better at trading than an index over the course of their terms. The fact is, the vast majority of Congress people _own index funds_ or similar portfolio construction. When there are outliers they regress after a few years. The last time I ran the numbers the the majority of the outliers just got into Nvidia a little early. They mostly had tech heavy portfolio construction. The big outliers were people like Pelosi who were married to wealthy spouses who were doing exotic trading, but several of them did poorly as well. The fact is, Congress people have more scrutiny on their trades than the average person and more downsides. We should restrict trading by Congress people because of the image of impropriety not because it’s actually common to make a bunch of money doing it.
  - JKCalhoun 1y ago
    Only broad index funds would be the no-brainer solution.
  - deleted 1y ago
    [deleted]
- potato3732842 1y ago
  Have you ever watched CSPAN? He's doing the same stupid routine they all do. Trying to spew keywords and generate soundbytes he thinks will be useful to him and bad for the opposition. I'm pretty sure they all get taught this or something. It's so f-ing tiresome. I wish they'd just discuss things more normally.
- mikeryan 1y ago
  Also surprised it didn’t mention that Rick Scott got rich by defrauding Medicare. To the tune of 14 felony counts against his company and a 1.7B dollar fine.
- adestefan 1y ago
  Rick Scott made his money by being the CEO of a company that paid a $1.7 billion fine for Medicare fraud.[0] He’s one of the most corrupt people in Congress. [0] https://www.politifact.com/factchecks/2014/mar/03/florida-democratic-party/rick-scott-rick-scott-oversaw-largest-medicare-fra/ https://www.politifact.com/factchecks/2014/mar/03/florida-de...
- kasey_junk 1y ago
  > For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info. If a congress person gets that info from oracle or TikTok or someone with fiduciary duty to their shareholders that’s insider info (in the US) and that congress person is subject to existing insider trading laws. If they get it as part of their duties in Congress it’s not insider info, the same way any other person without the fiduciary duty. It may be an abuse of power and we may want to ban it, but it’s not insider trading. It’s an important distinction because insider trading laws (in the US) are not predicated on open access to information, rather on not stealing from people you have a duty to. It’s not a fairness doctrine it’s property rights one.
mexicocitinluez 1y ago
Love how it skips the current, most-corrupt-in-history President.
- LorenDB 1y ago
  There is precedent for exempting the sitting President. For example, Harry S Truman was exempt from the two term limit enacted during his presidency.
  - mdhb 1y ago
    Don’t feed people that kind of nonsense trying to pretend it’s the same situation. It’s fine to just call a spade a spade or in this case to call corruption corruption.
    - LorenDB 1y ago
      I'm not trying to discount corruption. I'm just saying that there is precedent for this sort of thing.
      - hypeatei 1y ago
        There is also precedent for divesting from your businesses before taking office but that hasn't happened.
    - lesuorac 1y ago
      Previous / current behavior is nearly always exempted from legislation. Same reason why salary increases for senators and etc affect the _next_ session instead of the current one. Chances are the current administration is already running awfoul of existing laws (especially the part where TrumpCoin conferred actually benefits to its holders). But given the lack of appetite from the current majority parties at enforcing the law I don't expect any changes. Can't wait for anything besides FTTP to become more widespread.
  - johnecheck 1y ago
    That's not what's happening here. It's not a one-time Trump exception, it just doesn't apply to presidents. To me, it's completely obvious that this legislation should apply to the president. All the legislators know that too. Perhaps they're afraid. Perhaps they're ambitious. Either way, I'm not a fan.
t-3 1y ago
I support the idea, but I don't think it will make much of a difference because there are bound to be too many loopholes to be effective. I think stock market reform would be more effective - ban calls and puts and other forms of speculation. Speculation invites manipulation and incentivizes unethical actions, especially when paired with power and information. The best, but least realistically possible, thing would be to fix the problems with regulatory capture in the SEC and other oversight and enforcement agencies that are supposed to be punishing politicians.
- diggan 1y ago
  Why is it one or the other? Why not both? Maybe this ban can have a small dent, and some other laws have other dents too, when added together makes at least some difference. Kind of similar to how Spain is fighting vacation rentals. Yes, each individual new law and change won't immediately fix the problem, but each enacted change makes a small difference and currently we seem to be moving in a really great direction to eventually have at least that particular problem solved.
  - t-3 1y ago
    I never suggested it was one or the other, I just don't think this approach will be effective because it's filled with obvious loopholes and the existing laws aren't enforced anyway, but I am generally of the opinion that a smaller legal code is better, because people have to be able to know it to follow or enforce it.
- cluckindan 1y ago
  Historically, speculative instruments such as options as well as short selling have been outright banned in many countries. The British options trading ban in the 1800’s lasted for over a century.
- pacoWebConsult 1y ago
  Options and futures are very good price discovery mechanisms. Forcing people to only take long positions is not a good solution. Speculation is not a problem, nor is utilizing asymmetric information in markets, since this all comes out as the price. The problem is that congress has a government enforced monopoly on a large quantity of various types of important information.
sokoloff 1y ago
> The measure, originally called the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, would prohibit members of Congress and their spouses from trading or holding individual stocks I genuinely laughed out loud at the bill's original name.
- tialaramex 1y ago
  That one is fun, but it's part of a general trend of childish naming of US laws that is not a good sign for the health of the country making them. It's a Brown M&M for the country that you're focused on sound bite names for laws, not their content. Years ago I ran into the fun hack introduced in Britain's laws during my lifetime. Modern laws provide short names for themselves, so an Act might say you can refer to this as the "1996 Goat Prevention Act" and even though it has an unwieldy long full name that shorter name works everywhere you need to name it, but some older laws don't do this, so that's annoying, and also if you've repealed the law you can't use a short name which no longer exists because the law itself was repealed and that's where the short name comes from. So, they passed a law which said when you repeal a law which gives any law a short name, those short names still work anyway. Then they passed a law which just provides convenient short names for laws people often want to refer to but don't come with short names, then they repealed that second law. Done.
  - potato3732842 1y ago
    Naming laws after people who did bad stuff you're trying to legislate away or their victims is at least a hundred years old. Only a rabid partisan would complain about a law about insider trading being named after one of the politicans most notorious for it. Personally I think they names should be more humorous and creative but I think this one is way, way better than stupid contradictory names like the PATRIOT act.
    - walls 1y ago
      There are nine members of congress who trade more profitably than her, but for some reason certain people use her as the poster child for this problem.
rayiner 1y ago
A categorical ban is way better than past efforts to subject Congress to insider trading laws. That gives way to much power to the executive branch to go after members of the legislative branch for political reasons. We should also raise congressional salaries to $1 million a year. Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
- chucksta 1y ago
  What so they have more money to invest? "I have enough money already I don't need more" said basically no one ever.
  - JKCalhoun 1y ago
    Ha ha, I said that. It's why I retired when I did. (I know, not exactly what you meant though.)
  - ben_w 1y ago
    Carrots and sticks. Now don't get me wrong, given how often legislation in the USA and the UK seems to get rubber-stamped by members of the legislative body who did not (and in some cases could not have) actually read it, I think there's something structurally wrong with at least these two governments, where the senators and MPs are more like overpaid customer support agents and less like the legal/constitutional equivalent of software engineers doing code review or maintaining system architecture, but conditional on if we actually want the elected representatives to be the people's preferred choices amongst the best legal minds available, we have to pay enough to encourage… actually, even before that, even just to get the attention of the top m=contested_seats candidates whose views allow them to comfortably be members of each of the n=num_parties. Now, I don't know what that pay rate is, and ChatGPT's guess would be better than mine, so the best I can do is link to a page that I only found because ChatGPT gave me a searchable phrase, "magic circle law firm": https://www.allaboutlaw.co.uk/school-leaver-law-careers/becoming-a-lawyer/how-much-does-a-partner-at-a-magic-circle-law-firm-earn https://www.allaboutlaw.co.uk/school-leaver-law-careers/beco... That suggests >>£1M/year in the UK. I assume the USA is more. Consider: would you take a 90% pay-cut to do your current day job but for the public good?
hypeatei 1y ago
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump Nice little carve out for the big guy.
- deleted 1y ago
  [deleted]
- thrance 1y ago
  With them already printing "Trump 2028" hats, I doubt that would be enough.
- delecti 1y ago
  The current GOP deserves no benefit of the doubt, but there's also a history of excluding the people currently in office. If anything I'm surprised it gives current congresspeople 180 days to sell, rather than being something like "nobody not currently in office" like the 22nd amendment.
imglorp 1y ago
The repeal of Citizens vs United was one major dagger in the lung of democracy. A stock ban is some nice grandstanding but if they were truly serious, they'd remove money from politics.
- bee_rider 1y ago
  It doesn’t solve every problem, but it is a nice step forward. Don’t let perfect be the enemy of good and all that.
  - cogman10 1y ago
    I actually disagree. Federal employees have more strict stock regulations and yet we still see problems with private influence on the government. The issue is our bribery laws are ridiculously weak. It's not illegal for your pals at Nestle to pay you 10x for your house or send your kids to college. Stock is fairly public knowledge and you owning shares in Nestle doesn't do nearly as much to influence the laws you write regulating Nestle. You can always dump the stock before sending the laws out of committee. The one positive of banning congressional stock trading is that at least it might make congressional people more sensitive to the broad market.
    - threetonesun 1y ago
      Make your own crypto coin, maybe do a few press conferences about it and how great it is. If you find yourself in a situation where you might be legally immune to any prosecution, maybe just outright state that buying said asset will get you favoritism.
      - cogman10 1y ago
        Crypto isn't stock. But yes, I'd support outright banning crypto, especially for Congress. WAAAAY to easy to spin up a new coin that effectively works as money laundering. That's a much worse scenario than stock currently is. It's a lot harder to create new stock.
- 1y ago
tdhz77 1y ago
Banning stocks will not do anything. Most congressman lose money when they sell. There is an incorrect notion passed by there loud people on twitter that congress people got rich while in congress. Oh contrare, they were already rich. They had be to run for office. Ban money in politics. Overturn citizen v united. https://www.harvardmagazine.com/2012/06/a-radical-fix-for-the-republic https://www.harvardmagazine.com/2012/06/a-radical-fix-for-th...
- jvanderbot 1y ago
  Do you see the danger in introducing this dichotomy? A stock ban is not bad even if you believe that it won't help. Many do believe it is a good idea, and therefore is worth a vote. But stopping it by saying we should tilt at another windmill? I don't see the benefit of that, I only see it being used as a tactic to stop good legislation in favor of the impossible great.
- JKCalhoun 1y ago
  > Ban money in politics. Overturn citizen v united. Agree. But allowing legislators to trade and vote on legislation that affects their holdings is a part of "ban money in politics".
thrance 1y ago
The title makes it appear like a bipartisan move when every republicans but one voted against the proposal. We all know where the GOP's true interests are, no need to whitewash them. A better title would have been "GOP representatives massively vote against insider trading regulations".
- JKCalhoun 1y ago
  > We all know where the GOP's true interests are… If we all did then the title would have been adequate as is.
Workaccount2 1y ago
I just want to point something out that has irked me since it happened, and continues to fuel a mythos to this day. Nancy Pelosi and the infamous insider trading of Nvidia. A few weeks before the CHIPS act passed congress in July 2022, Nancy Pelosi made a large purchase of Nvidia shares. This made headlines everywhere as obviously she was going to pass the CHIPS act, obviously Nvidia stands to benefit, so of course she loaded up knowing these things. But the media, who will readily obscure any nuance that can kill a story, only mentioned that she executed call options to purchase nvidia shares. Which to 99% of the public is technical babble that is ignored. But what actually happened? Well Pelosi, looking at her trading history, likes to buy deep ITM LEAP calls and hold them to expiry. This means in the simplest terms, that she signs a contract 1yr+ before a date, where she gives herself the option (hence the name) to purchase a set number of shares at a set price. So when Nancy purchased Nvidia shares in June 2022, she had set the contract in motion to do that at least a year prior. But even worse for the inflammatory story, because she purchased that option over a year prior, and Nvidia was down ~15% in the last year (remember 2022 was a bad year for stocks), she actually would have lost money on the trade. So here we have the foundational story that set this whole thing is motion, which is based on public ignorance of how stocks and options work, where Pelosi was vilified for a trade she lost money on, because the execution date of a contract she signed at least a year prior happened to be within a few weeks of the CHIPS act.
- chrisg23 1y ago
  If she likes to hold them to expiry like you pointed out, then isn’t it odd to not have let the nvidia options expire? I’d need to see her full trading history to make sense of whether or not she is using insider information to influence her trading patterns. Given her net worth of over 100 million dollars I am a little suspicious, but lacking details it’s hard for me to make a judgement and I assume you are correct. Or we can ban members of the government from trading stocks and investing while they hold office and then not have to have this discussion. I hate all politicians republicans democrats and Bernie’s (not picking on Mr. Sanders but I don’t know if there’s another registered independent in high level government) if they even have a sniff of engaging in fuckery, the job should be too important to show any possible signs of impartiality. That boat seems to have sailed away though minus their being an actual grassroots populist movement to overhaul government. And those keep seeming to dissipate or get co-opted when they do start to foment, like the occupy Wall Street type things that in my life seem to keep popping up, gaining traction, and then becoming something no one hardly talks about anymore.

191 points by hhs 1y ago

"He made a reference to billionaires, okay?" Scott said of Hawley. "I don't know when in this country it became a negative to make money. But somehow, if you've made money, you're supposedly — I think Senator Hawley suggests — you shouldn't be serving, because you might trade stocks." "Anybody want to be poor? I don't." Scott continued. "Right? So this idea that we're going to attack people because they make money is wrong. Is absolutely wrong. We should cherish all of our different backgrounds. ... So, I think it's disgusting what is going on here." This is Republican Sen. Rick Scott by the way. Seems like he's using some form ad hominem to distract from the actual purpose. The purpose is not to prevent congress from getting rich. The purpose is to remove conflict of interest. Congress can have insider info on individual stocks. For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info. I think only allowing congress members to buy and sell index funds is fine. Not individual stocks. Or if they want to trade individual stocks, make them declare 1 month earlier and make it public.

zdragnar 1y ago
What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades. Sensor Scott opposes the blanket ban because insider trading is already illegal, and thus the ban makes punishable otherwise entirely legal behavior. And he's right- it isn't, and shouldn't be, illegal or considered wrong to be successful, if done the right way. There's a middle ground somewhere in there I'm sure, but given how suspiciously well some members of Congress have done, and how there's been seemingly not enough accountability of it, I'm not terribly empathetic.
- potato3732842 1y ago
  >What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades. It speaks volumes about the relationship between the government and the people that they nailed Martha for (a bullshit follow on charge stemming from an investigation into) a small time variant of basically the same thing. Like how if the police shoot your dog it's just property but you shoot one of theirs and well you might as well shoot the officer too because it's another count of the same crime. Goddamn double standards everywhere. What ever happened to equality under the law?
- marcusb 1y ago
  > There's a middle ground somewhere in there I'm sure The parent commenter pointed out the middle ground: > I think only allowing congress members to buy and sell index funds is fine.
  - Uvix 1y ago
    That’s not a middle ground; index funds are profitable based on the country’s success, not the trader’s. And you don’t get that same dopamine hit as gambling. They’re the smarter place for people to put their money but I wouldn’t consider them a comparable product.
    - willvarfar 1y ago
      Perhaps Congress have a way of influencing the country's success in a way that Uvix can't? If congress has to bet on the overall economy instead of e.g. spotting that riot gear providers goes up when country goes down, that would be a good thing?
    - marcusb 1y ago
      Yes, it is a middle ground. The extreme positions here are "no equity ownership, directly or indirectly" and "no trading restrictions at all." Allowing index fund purchases is squarely in the middle of that continuum. Additionally, your description of how people purchase and make money on indexes funds is incomplete at best. Really, it's just factually incorrect in that it presumes a certain purchase strategy. People do short-term, dopamine-inducing trades of index funds all the time. But, I don't think elected representatives should be able to do that, either. At the very least, successful short term trading - directly or through an advisor, of an individual security or a fund - creates the appearance of impropriety.
- cmiles74 1y ago
  It's very difficult to get caught, and then to prove wrongdoing, under the current rules. There has already been reporting of filing irregularities. https://www.newsweek.com/stock-act-congress-violations-trading-shares-1947459 https://www.newsweek.com/stock-act-congress-violations-tradi... Making the rules simpler will make it easier to comply. Removing the incentive for insider trades strikes me as a good thing.
- Atreiden 1y ago
  Some jobs place restriction on your ability to trade individual stocks - I discovered this when I went to work at an investment management firm. This was a policy applied to all people that worked there. I see no reason not to do the same thing for Congress. The legal space is well-traveled and the fundamental concern - namely, the perverse incentives resulting from asymmetric access to valuable information - is present in Congress the esame way as in a sizable investment firm. Index funds and mutual funds are often exempt or subject to less scrutiny, and that could be here too.
- kasey_junk 1y ago
  I run the numbers every couple of years and I’ve never had a year that shows individual Congress people are particularly better at trading than an index over the course of their terms. The fact is, the vast majority of Congress people _own index funds_ or similar portfolio construction. When there are outliers they regress after a few years. The last time I ran the numbers the the majority of the outliers just got into Nvidia a little early. They mostly had tech heavy portfolio construction. The big outliers were people like Pelosi who were married to wealthy spouses who were doing exotic trading, but several of them did poorly as well. The fact is, Congress people have more scrutiny on their trades than the average person and more downsides. We should restrict trading by Congress people because of the image of impropriety not because it’s actually common to make a bunch of money doing it.
- JKCalhoun 1y ago
  Only broad index funds would be the no-brainer solution.
- deleted 1y ago
  [deleted]
potato3732842 1y ago
Have you ever watched CSPAN? He's doing the same stupid routine they all do. Trying to spew keywords and generate soundbytes he thinks will be useful to him and bad for the opposition. I'm pretty sure they all get taught this or something. It's so f-ing tiresome. I wish they'd just discuss things more normally.
mikeryan 1y ago
Also surprised it didn’t mention that Rick Scott got rich by defrauding Medicare. To the tune of 14 felony counts against his company and a 1.7B dollar fine.
adestefan 1y ago
Rick Scott made his money by being the CEO of a company that paid a $1.7 billion fine for Medicare fraud.[0] He’s one of the most corrupt people in Congress. [0] https://www.politifact.com/factchecks/2014/mar/03/florida-democratic-party/rick-scott-rick-scott-oversaw-largest-medicare-fra/ https://www.politifact.com/factchecks/2014/mar/03/florida-de...
kasey_junk 1y ago
> For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info. If a congress person gets that info from oracle or TikTok or someone with fiduciary duty to their shareholders that’s insider info (in the US) and that congress person is subject to existing insider trading laws. If they get it as part of their duties in Congress it’s not insider info, the same way any other person without the fiduciary duty. It may be an abuse of power and we may want to ban it, but it’s not insider trading. It’s an important distinction because insider trading laws (in the US) are not predicated on open access to information, rather on not stealing from people you have a duty to. It’s not a fairness doctrine it’s property rights one.

mexicocitinluez 1y ago

Love how it skips the current, most-corrupt-in-history President.

LorenDB 1y ago
There is precedent for exempting the sitting President. For example, Harry S Truman was exempt from the two term limit enacted during his presidency.
- mdhb 1y ago
  Don’t feed people that kind of nonsense trying to pretend it’s the same situation. It’s fine to just call a spade a spade or in this case to call corruption corruption.
  - LorenDB 1y ago
    I'm not trying to discount corruption. I'm just saying that there is precedent for this sort of thing.
    - hypeatei 1y ago
      There is also precedent for divesting from your businesses before taking office but that hasn't happened.
  - lesuorac 1y ago
    Previous / current behavior is nearly always exempted from legislation. Same reason why salary increases for senators and etc affect the _next_ session instead of the current one. Chances are the current administration is already running awfoul of existing laws (especially the part where TrumpCoin conferred actually benefits to its holders). But given the lack of appetite from the current majority parties at enforcing the law I don't expect any changes. Can't wait for anything besides FTTP to become more widespread.
- johnecheck 1y ago
  That's not what's happening here. It's not a one-time Trump exception, it just doesn't apply to presidents. To me, it's completely obvious that this legislation should apply to the president. All the legislators know that too. Perhaps they're afraid. Perhaps they're ambitious. Either way, I'm not a fan.

t-3 1y ago

I support the idea, but I don't think it will make much of a difference because there are bound to be too many loopholes to be effective. I think stock market reform would be more effective - ban calls and puts and other forms of speculation. Speculation invites manipulation and incentivizes unethical actions, especially when paired with power and information. The best, but least realistically possible, thing would be to fix the problems with regulatory capture in the SEC and other oversight and enforcement agencies that are supposed to be punishing politicians.

diggan 1y ago
Why is it one or the other? Why not both? Maybe this ban can have a small dent, and some other laws have other dents too, when added together makes at least some difference. Kind of similar to how Spain is fighting vacation rentals. Yes, each individual new law and change won't immediately fix the problem, but each enacted change makes a small difference and currently we seem to be moving in a really great direction to eventually have at least that particular problem solved.
- t-3 1y ago
  I never suggested it was one or the other, I just don't think this approach will be effective because it's filled with obvious loopholes and the existing laws aren't enforced anyway, but I am generally of the opinion that a smaller legal code is better, because people have to be able to know it to follow or enforce it.
cluckindan 1y ago
Historically, speculative instruments such as options as well as short selling have been outright banned in many countries. The British options trading ban in the 1800’s lasted for over a century.
pacoWebConsult 1y ago
Options and futures are very good price discovery mechanisms. Forcing people to only take long positions is not a good solution. Speculation is not a problem, nor is utilizing asymmetric information in markets, since this all comes out as the price. The problem is that congress has a government enforced monopoly on a large quantity of various types of important information.

sokoloff 1y ago

> The measure, originally called the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, would prohibit members of Congress and their spouses from trading or holding individual stocks I genuinely laughed out loud at the bill's original name.

tialaramex 1y ago
That one is fun, but it's part of a general trend of childish naming of US laws that is not a good sign for the health of the country making them. It's a Brown M&M for the country that you're focused on sound bite names for laws, not their content. Years ago I ran into the fun hack introduced in Britain's laws during my lifetime. Modern laws provide short names for themselves, so an Act might say you can refer to this as the "1996 Goat Prevention Act" and even though it has an unwieldy long full name that shorter name works everywhere you need to name it, but some older laws don't do this, so that's annoying, and also if you've repealed the law you can't use a short name which no longer exists because the law itself was repealed and that's where the short name comes from. So, they passed a law which said when you repeal a law which gives any law a short name, those short names still work anyway. Then they passed a law which just provides convenient short names for laws people often want to refer to but don't come with short names, then they repealed that second law. Done.
- potato3732842 1y ago
  Naming laws after people who did bad stuff you're trying to legislate away or their victims is at least a hundred years old. Only a rabid partisan would complain about a law about insider trading being named after one of the politicans most notorious for it. Personally I think they names should be more humorous and creative but I think this one is way, way better than stupid contradictory names like the PATRIOT act.
  - walls 1y ago
    There are nine members of congress who trade more profitably than her, but for some reason certain people use her as the poster child for this problem.

rayiner 1y ago

A categorical ban is way better than past efforts to subject Congress to insider trading laws. That gives way to much power to the executive branch to go after members of the legislative branch for political reasons. We should also raise congressional salaries to $1 million a year. Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.

chucksta 1y ago
What so they have more money to invest? "I have enough money already I don't need more" said basically no one ever.
- JKCalhoun 1y ago
  Ha ha, I said that. It's why I retired when I did. (I know, not exactly what you meant though.)
- ben_w 1y ago
  Carrots and sticks. Now don't get me wrong, given how often legislation in the USA and the UK seems to get rubber-stamped by members of the legislative body who did not (and in some cases could not have) actually read it, I think there's something structurally wrong with at least these two governments, where the senators and MPs are more like overpaid customer support agents and less like the legal/constitutional equivalent of software engineers doing code review or maintaining system architecture, but conditional on if we actually want the elected representatives to be the people's preferred choices amongst the best legal minds available, we have to pay enough to encourage… actually, even before that, even just to get the attention of the top m=contested_seats candidates whose views allow them to comfortably be members of each of the n=num_parties. Now, I don't know what that pay rate is, and ChatGPT's guess would be better than mine, so the best I can do is link to a page that I only found because ChatGPT gave me a searchable phrase, "magic circle law firm": https://www.allaboutlaw.co.uk/school-leaver-law-careers/becoming-a-lawyer/how-much-does-a-partner-at-a-magic-circle-law-firm-earn https://www.allaboutlaw.co.uk/school-leaver-law-careers/beco... That suggests >>£1M/year in the UK. I assume the USA is more. Consider: would you take a 90% pay-cut to do your current day job but for the public good?

hypeatei 1y ago

> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump Nice little carve out for the big guy.

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thrance 1y ago
With them already printing "Trump 2028" hats, I doubt that would be enough.
delecti 1y ago
The current GOP deserves no benefit of the doubt, but there's also a history of excluding the people currently in office. If anything I'm surprised it gives current congresspeople 180 days to sell, rather than being something like "nobody not currently in office" like the 22nd amendment.

imglorp 1y ago

The repeal of Citizens vs United was one major dagger in the lung of democracy. A stock ban is some nice grandstanding but if they were truly serious, they'd remove money from politics.

bee_rider 1y ago
It doesn’t solve every problem, but it is a nice step forward. Don’t let perfect be the enemy of good and all that.
- cogman10 1y ago
  I actually disagree. Federal employees have more strict stock regulations and yet we still see problems with private influence on the government. The issue is our bribery laws are ridiculously weak. It's not illegal for your pals at Nestle to pay you 10x for your house or send your kids to college. Stock is fairly public knowledge and you owning shares in Nestle doesn't do nearly as much to influence the laws you write regulating Nestle. You can always dump the stock before sending the laws out of committee. The one positive of banning congressional stock trading is that at least it might make congressional people more sensitive to the broad market.
  - threetonesun 1y ago
    Make your own crypto coin, maybe do a few press conferences about it and how great it is. If you find yourself in a situation where you might be legally immune to any prosecution, maybe just outright state that buying said asset will get you favoritism.
    - cogman10 1y ago
      Crypto isn't stock. But yes, I'd support outright banning crypto, especially for Congress. WAAAAY to easy to spin up a new coin that effectively works as money laundering. That's a much worse scenario than stock currently is. It's a lot harder to create new stock.
1y ago

tdhz77 1y ago

Banning stocks will not do anything. Most congressman lose money when they sell. There is an incorrect notion passed by there loud people on twitter that congress people got rich while in congress. Oh contrare, they were already rich. They had be to run for office. Ban money in politics. Overturn citizen v united. https://www.harvardmagazine.com/2012/06/a-radical-fix-for-the-republic https://www.harvardmagazine.com/2012/06/a-radical-fix-for-th...

jvanderbot 1y ago
Do you see the danger in introducing this dichotomy? A stock ban is not bad even if you believe that it won't help. Many do believe it is a good idea, and therefore is worth a vote. But stopping it by saying we should tilt at another windmill? I don't see the benefit of that, I only see it being used as a tactic to stop good legislation in favor of the impossible great.
JKCalhoun 1y ago
> Ban money in politics. Overturn citizen v united. Agree. But allowing legislators to trade and vote on legislation that affects their holdings is a part of "ban money in politics".

thrance 1y ago

The title makes it appear like a bipartisan move when every republicans but one voted against the proposal. We all know where the GOP's true interests are, no need to whitewash them. A better title would have been "GOP representatives massively vote against insider trading regulations".

JKCalhoun 1y ago
> We all know where the GOP's true interests are… If we all did then the title would have been adequate as is.

Workaccount2 1y ago

I just want to point something out that has irked me since it happened, and continues to fuel a mythos to this day. Nancy Pelosi and the infamous insider trading of Nvidia. A few weeks before the CHIPS act passed congress in July 2022, Nancy Pelosi made a large purchase of Nvidia shares. This made headlines everywhere as obviously she was going to pass the CHIPS act, obviously Nvidia stands to benefit, so of course she loaded up knowing these things. But the media, who will readily obscure any nuance that can kill a story, only mentioned that she executed call options to purchase nvidia shares. Which to 99% of the public is technical babble that is ignored. But what actually happened? Well Pelosi, looking at her trading history, likes to buy deep ITM LEAP calls and hold them to expiry. This means in the simplest terms, that she signs a contract 1yr+ before a date, where she gives herself the option (hence the name) to purchase a set number of shares at a set price. So when Nancy purchased Nvidia shares in June 2022, she had set the contract in motion to do that at least a year prior. But even worse for the inflammatory story, because she purchased that option over a year prior, and Nvidia was down ~15% in the last year (remember 2022 was a bad year for stocks), she actually would have lost money on the trade. So here we have the foundational story that set this whole thing is motion, which is based on public ignorance of how stocks and options work, where Pelosi was vilified for a trade she lost money on, because the execution date of a contract she signed at least a year prior happened to be within a few weeks of the CHIPS act.

chrisg23 1y ago
If she likes to hold them to expiry like you pointed out, then isn’t it odd to not have let the nvidia options expire? I’d need to see her full trading history to make sense of whether or not she is using insider information to influence her trading patterns. Given her net worth of over 100 million dollars I am a little suspicious, but lacking details it’s hard for me to make a judgement and I assume you are correct. Or we can ban members of the government from trading stocks and investing while they hold office and then not have to have this discussion. I hate all politicians republicans democrats and Bernie’s (not picking on Mr. Sanders but I don’t know if there’s another registered independent in high level government) if they even have a sniff of engaging in fuckery, the job should be too important to show any possible signs of impartiality. That boat seems to have sailed away though minus their being an actual grassroots populist movement to overhaul government. And those keep seeming to dissipate or get co-opted when they do start to foment, like the occupy Wall Street type things that in my life seem to keep popping up, gaining traction, and then becoming something no one hardly talks about anymore.