Elected Dirty Dealers
The US Congress, like legislatures elsewhere, effectively exempts itself from the normal rules of insider trading. But the real issue is not just insider trading – it's that Congress and other legislatures live by rules that are very different from those imposed on ordinary citizens.
CHICAGO – Imagine that you are an elected member of the United States House of Representatives in the middle of the debate on the health-care reform act that was passed in 2010. In a House committee meeting, you learn before anyone else that a proposed public-insurance option – a program that would compete with private insurance – will not be included. This information will have a large impact on health-care companies’ stock prices. Can you trade these companies’ shares before it is made public?
CHICAGO – Imagine that you are an elected member of the United States House of Representatives in the middle of the debate on the health-care reform act that was passed in 2010. In a House committee meeting, you learn before anyone else that a proposed public-insurance option – a program that would compete with private insurance – will not be included. This information will have a large impact on health-care companies’ stock prices. Can you trade these companies’ shares before it is made public?