Hedge-fund mogul Raj Rajaratnam drew 11 years in lockup last month for insider trading. Martha Stewart got five months just for lying about it to federal agents.
Members of Congress? Ha.
For them, you see, trading on nonpublic information is perfectly legal.
And, as a recent “60 Minutes” report — based on a new book, “Throw Them All Out,” by Peter Schweitzer — makes clear, lawmakers of both political parties partake of the practice with abandon.
That’s right. It turns out that using information available to only a privileged few to profit on personal investments is strictly illegal — for everyone except congressmen.
Why? Because Congress makes the laws.
Thus, if Congress is about to pass a bill that will help a firm boost its stock, lawmakers are free to buy shares in that firm before most folks even know the legislation exists. After the bill passes, they sit back and watch their investments grow. Sweet.
But the need to regulate securities trading by congressmen is as plain as rain:
* Basic fairness: After Fed Chairman Ben Bernanke briefed lawmakers on the looming financial collapse in 2008, some of them rushed out and bought or sold assets accordingly, profiting nicely when markets tanked — and average folks lost their shirts.
* Conflicts of interests and outright bribes: In 2008, then-House Speaker Nancy Pelosi and her husband were “lucky” enough to buy 5,000 low-priced IPO shares of Visa, just as a bill that would have hurt credit-card firms bubbled through the House. Within two days, the share value climbed 45%. (Oh, yeah: The bill died.)
In 2009, House Minority Leader John Boehner bought health-care stocks just days before the proposed public-option provision for ObamaCare — which could have hurt his holdings — was defeated. His stocks, needless to say, rose.
All of these acts are perfectly legal.
But they undermine confidence in government. They can skew markets — and lead to lousy laws. (Where has the Occupy Wall Street crowd been on this?)
All this has stirred up new support for laws to curb the abuse — such as barring lawmakers from using “nonpublic information” for personal financial gain.
Good. It’s long past time to end the double standard.