Thursday, May 26, 2011

When the rules don't apply to the rulers

Dennis Levine.
Ivan Boesky.
Raj Rajaratnam.

All charged with and convicted of insider trading.

But what about our elected representatives in Washington, D.C.? You know, the ones who sit on committees that draft and pass legislation that affects every sector of our economy. The ones who know what legislation is coming down the pipe and the likely effect it will have on various sectors of the economy, or even particular companies.

You know, those men and women who prostitute themselves for campaign contributions 24/7. The ones who takes piles of cash from PACs representing trade associations and companies.

They have investments. They buy and sell stocks and bonds and other investment vehicles at the same time they are debating legislation.

Here's a bill regulating greenhouse emissions. Here's a bill regulating offshore drilling. Here's a bill regulating fuel economy in cars. Here's a bill authorizing the building of a dam or a highway. Here's a bill raising the minimum wage. Here's a bill mandating certain health benefits in standard insurance policies. Here's a bill authorizing tax credits for certain investments.

Guess who's trading on that information? Guess who's making trades that outperform the market?

It ain't Mr. Smith.

So it's against the law for an individual to make trades based upon information he obtained that was not available to every other potential investor, but it's perfectly okay for a congressman sitting on a committee regulating a particular industry to make trades based upon legislation that is up for consideration.

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