Friday, August 7, 2009

Another Congressional Perk: Exemption from Law Against Insider Trading! has the story:

We hadn't heard the allegation that members of Congress had a leg up for insider trading and wondered if it's true.

Thomas Newkirk, a partner with the law firm Jenner and Block, told us that indeed there's some uncertainty about how insider trading rules impact members of Congress and their staff.

For example, in 2001, a financial consultant meeting with the Treasury Department learned that the department planned to kill off the 30-year bond. In turn, the consultant tipped off traders at Goldman Sachs who proceeded to use that information to make the firm lots of money. It was considered insider trading because the consultant knew he was not supposed to release the information, Newkirk said. Federal regulators settled with Goldman Sachs and the consultant for about $10.3 million in September 2003.

But with members of Congress, it's different. Unless lawmakers have some express confidentiality agreement -- whether it's in writing or in word -- they can do whatever they want with the information they obtain on Capitol Hill, Newkirk said.

So yes, it seems there is a way for members of Congress to engage in insider trading. But whether they are actually doing it is another story all together. So far, there are no specific examples of lawmakers engaging in "secret spending and insider trading," as the e-mail indicates. But for it's factual claim, we give Public Citizen a True.

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