After a “60 Minutes” feature last fall outed the practice of insider trading on Capitol Hill — that’s using non-public information to make personal stock decisions in advance of the public — congressmen and women have been forced to pass this “good government” bill, the STOCK Act. That stands for the Stop Trading on Congressional Knowledge Act.
Bob said when he read Alexander Bolton’s February 1 story on the issue, he thought it was hysterical. Bolton wasn’t trying to be funny, but when you read the quotations from senators and representatives on both sides of the aisle as they try to squirm out of the legislation, then yes, there is reason to chuckle.
This has been a secret perk for years. If a lawmaker knows that legal changes to an industry will affect a stock’s price, they can place, and have placed, trades in advance of that information going public. People on Wall Street go to jail for doing this sort of thing, but what’s worse is that without strict rules applying to politicians, they can also be bribed without consequence. Instead of paying a lawmaker $10,000 for a favor, corporate insiders can just pass along a lucrative tip.
The bill passed the Senate and today a (weaker) version is expected to pass the House. Listen to Bob and Alex discuss all the different ways the folks on Capitol Hill are trying to amend the bill. You too may find humor in a sad situation.