Posted on 12/01/2011 9:26:21 AM PST by Para-Ord.45
With the Senate Homeland Security and Governmental Affairs Committee set to begin congressional insider trading hearings today, Sen. Kirsten Gillibrand, whose husband trades stock options, has proposed a bill that would legalize, not ban, insider trading by members of Congress.
“This is just nuts,” says UCLA Law Professor Stephen Bainbridge. The controversy surrounding Sen. Gillibrand’s version of the STOCK (Stop Trading on Congressional Knowledge) Act involves a curious omission of a conjunction that CNBC.com editor John Carney calls “shocking” and a “scandal” because it would “gut the law” entirely.
In Sen. Scott Brown’s version of the bill, the law reads:
"Not later than 270 days after the date of enactment of this Act, the Commission shall, by rule, prohibit any person from buying or selling the securities or security-based swaps of any issuer while such person is in possession of material nonpublic information relating to any pending or prospective legislative action relating to such issuer, if–
(A) such information was obtained by reason of such person being a Member or employee of Congress; or
(B) such information was obtained from a Member or employee of Congress, and such person knows that the information was so obtained."
Sen. Gillibrand’s version, however, contains a critical difference:
"Not later than 270 days after the date of enactment of this Act, the Commission shall, by rule, prohibit any person from buying or selling the securities or security-based swaps of any issuer while such person is in possession of material nonpublic information relating to any pending or prospective legislative action relating to such issuer, if–
(A)(i) such information was obtained by reason of such person being a Member or employee of Congress; or
(ii) such information was obtained from a Member or employee of Congress, and such person knows that the information was so obtained;
(B) the person acted with the intent to assist another person, directly or indirectly, to use the information to enter into, or offer to buy or sell the securities of such publicly traded company based on such information."
As UCLA Law Professor Stephen Bainbridge notes, while the omission of the conjunction “And” between clause A and B appears to be a typo, Sen. Gillibrand’s insertion of clause B would mean that a member of Congress would be free to make stock trades using material, nonpublic information so long as they didn’t also help another person make a similar stock purchase.
“That would completely torpedo the bill’s purpose and intent,” says Peter Schweizer, author of the book that prompted the reform effort. Is Sen. Gillibrand’s bill a stealth attempt to keep insider trading by members of Congress legal?
Or is Gillibrand’s version of the STOCK Act simply a shoddily constructed piece of legislation?
With Washington watchers keyed in on today’s hearings, all eyes will be on Sen. Kirstin Gillibrand for answers.
While I’d like to see Pelosi, Buchus, and Kerry go down, this law can’t be retroactive. ex post facto laws are expressly forbidden by the United States Constitution and for good reason.
Good thing they didn’t “pass it in order to find out what was in it”...
She is a democrat - they believe they are above the law. putting themselves above the law should not be a surprise.
Wonder what Martha Stewart thinks of this.
It might have been Mark Twain who said “ never blame on malice what you can explain with stupidity”. In the case of Congress I am perplexed because there is so much of both qualities present.
LOL
The FEC is adamant in saying Congressmen CAN be prosecuted for insider trading under current law.
Be serious, even Mark Levin has admitted the USA is a post-constitutional country.
The law IS whatever they say it is and has been that was since FDR.
they way they hafass write things and then vote on big bills they’ve never read, we’re lucky they haven’t repealed the law of gravity and required the sun to set in the east by now.
that way * since FDR.
Tell that to all the American Citizens that have been robbed of their Second Amendment rights because of "domestic violence" court orders and laws.
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Gilliabrand must be sitting on a “BIG STOCK DEAL’ in the next 9 months for such a law to be effective in 9 months.
The TEA Party should make hay with this with Schumer and Gillibrand .
Ever wonder how so many people run for public office with so little cash reserves , and then leave as multi-millionaires ?
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