2011-11-14 15:37:00
Pelosi, Boehner and Bachus Trades Raise Eyebrows
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Should our elected members of Congress be able to trade (and profit) using insider information?
I suspect that the average person would answer with a resounding "no" to this question.
The fact is, members of Congress can trade using insider information with impunity. Call it a nice "perk" of being an elected member of Congress.
A recent investigative story on 60 Minutes has really shone the spotlight on the practice of congressmen trading on non-public information.
The story claimed that Nancy Pelosi, John Boehner and Spencer Bachus have all engaged in transactions over the past couple of years that would be, at best, a conflict of interest.
The allegations against Spencer Bachus, who is currently serving as the Chairman of the House Financial Services Committee, are particularly troubling.
According to Biggovernment.com, Bachus actively bet against the markets during the financial crisis of 2008.
The site claims that Bachus, who was a high ranking member of the House Financial Services Committee at the time of the crisis, used his access to "high-level private meetings and phone conversations with then-Treasury Secretary Henry Paulson" and then placed bets via options trades using this information.
According to the site, Bachus placed "at least" 40 options trades between July-November 2008. These trades reportedly included bets against:
-the Nasdaq
-General Electric
-the financial sector
Biggovernment.com claims that Bachus raked in "at least" $50,000 in profits from these trades.
So - a high ranking member of the House Financial Services Committee was allegedly actively betting AGAINST the markets during their darkest days. If that doesn't leave a bad taste in your mouth, then I don't know what will.
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Assuming that these allegations are true, should Bachus step down? Bachus reportedly ran his actions by the House Ethics Committee, and they reportedly said that there was no problem.
Should members of Congress be exempted from insider trading rules? Why should members of Congress operate with impunity while average citizens go to jail for the very same offences?
Should members of Congress be allowed to trade at all? Many financial networks ban their reporters from trading stocks - should members of Congress face a similar ban?
Filed under: Stock Market Scandals
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