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What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades. Sensor Scott op

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

>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

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