Insider Trading Laws Do Not Apply to Members of Congress. No, Seriously.

Insider Trading Laws Do Not Apply to Members of Congress. No, Seriously.

By Justin Rohrlich Oct 13, 2011 5:30 pm

And not only are Senators and Congressmen immune, their aides are, too.........

http://www.minyanville.com/businessmarkets/articles/raj-rajaratnam-galleon-insider-trading-rajaratnam/10/13/2011/id/37373

Earlier today, Galleon Group founder Raj Rajaratnam was convicted and sentenced to 11 years in prison on insider trading charges involving 35 stocks, among them Google(GOOG), Advanced Micro Devices (AMD),IBM (IBM), and Goldman Sachs (GS).

However, if Rajaratnam had been a US Senator rather than a $7 billion hedge fund manager when he made the trades in question, there would be no criminal proceedings at all. Believe it or not, the Securities and Exchange Act does not apply to members of Congress, according to Craig Holman, legislative representative at government watchdog group Public Citizen.

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For this reason, Congresswoman Louise Slaughter, along with Congressmen Tim Walz and Brian Baird (who has since retired), has repeatedly introduced the “Stop Trading on Congressional Knowledge Act,” or STOCK Act that would make it illegal for members of Congress to trade stocks based on inside information.

Before he left office, Baird told a reporter that no hard evidence exists that insider trading is a widespread problem in Congress.

“But in a town that trades on information,” he said, it’s “almost a certainty.”

http://www.minyanville.com/businessmarkets/articles/raj-rajaratnam-galleon-insider-trading-rajaratnam/10/13/2011/id/37373?page=2

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