Forum Post: Endangered Lawmakers Move To Back Bill Banning Congressional Insider Trading

---

And now, with NADEX ‘Prediction Market’ trading – hedge-funds can return the favor by giving politicians inside NADEX tips

http://maxkeiser.com/2011/12/23/and-now-with-nadex-prediction-market-trading-hedge-funds-can-now-return-the-favor-by-giving-politicians-inside-nadex-tips/

-December 23, 2011-

Hedge-Fund Titans Got Inside Political Tips

http://nymag.com/daily/intel/2011/12/hedge-fund-titans-got-inside-political-tips.html

The ability to trade on inside Wall St. and Washington information will increase exponentially when NADEX starts trading ‘Prediction Market’ political contracts in January. The entire political process will enter a new era of farce as vote-rigging gets ‘securitized’ and ‘financialized.’ Of course this will be seen as a triumph for ‘free markets’ and not for what it really is: hyper-kleptocracy.

---

Hedge-Fund Titans Got Inside Political Tips

http://nymag.com/daily/intel/2011/12/hedge-fund-titans-got-inside-political-tips.html

-12/20/11-

I’m surprised this Wall Street Journal story... http://online.wsj.com/article/SB10001424052970204844504577100260349084878.html ...detailing how hedge funds manage to obtain profitable inside information, hasn’t gotten more attention. The whole story seems pretty explosive. I’d like to pull out a bit at the end, about how some hedge-fund players learned that key Democratic moderates in the Senate would jettison the public option in the health care bill in 2009:

The weekend before the Dec. 8, 2009 session, Senate Majority Leader Harry Reid (D., Nev.) held Senate sessions on Saturday and Sunday, seeking a deal. Another senator, Tom Carper (D., Del.), also was trying to help. The central issue: Would the bill call for the government to create a public health insurance plan, the position supported by President Barack Obama?

To counter Republican opposition, Democrats needed votes from Messrs. Lieberman and Nelson, who said they had major concerns with a robust government-insurance plan. As negotiations neared a resolution, JNK Securities and its hedge-fund clients met a half-dozen lawmakers in the U.S. Capitol. Among those who spoke to the hedge funds were Mr. Lieberman and Mr. Carper on Dec. 8, according to their offices. The roster included Viking Global's Scott Zinober and Karsch Capital's Eric Potoker.

The broad outlines of an agreement had been circulating for days, but the lawmakers confirmed they were close to a deal that discarded the public insurance plan, a boost to private insurers. Viking, a hedge fund that manages $13.8 billion, bought six million shares of Aetna in that fourth quarter of 2009, according to regulatory filings. Karsch, which manages $2.4 billion, bought half a million Aetna shares during the same period, according to regulatory records. Shares of Aetna rose 14% in the fourth quarter.

There was always a slightly puzzling dynamic at work in the fight over the public option. It polled extremely well, but key Democrats in the Senate opposed it. Now, you could envision a justification for Democrats from red states opposing the measure on political grounds – even if the measure itself was popular, perhaps they saw more value in breaking from the liberal wing and demonstrating “moderation,” regardless of the specifics of the issue. But then you had, among the public option skeptics, blue state Democrats like Lieberman and Carper. It’s … interesting to learn that they were meeting with hedge-fund executives and telling them about their efforts to subvert the public option.

There’s a broader problem here for the liberal economic agenda. Democrats live in a milieu that is far richer, and more attuned to the needs of business, than their broader constituencies. Republicans in Congress basically never need to pay attention to labor unions or poverty advocates. But Democrats in Congress are surrounded by rich people, and are usually rich themselves. Even putting aside their need for campaign donations, Democrats have a social support network that strongly incentivizes them to adopt “moderate” pro-business stances. Even if absolutely nothing untoward occurred between the hedge funds and the senators, the corruption inherent in the relationship is profound.

---

-Insider Trading and Congress-

Live Hearing On Whether Insider Trading By Congress Should Be Illegal

http://www.zerohedge.com/news/live-hearing-whether-insider-trading-congress-should-be-illegal

-12/06/2011-

Only in a banana republic would Congress be "forced" to hold hearings on whether to ban itself from illegal (for everyone else) insider trading.

Which explains why below readers can watch precisely that, live from the house Committee on Financial Services.The legislation in question relates to bill H.R. 1148... http://financialservices.house.gov/UploadedFiles/hr1148ai.pdf ...the "Stop Trading on Congressional Knowledge Act." We wonder how long until Congress manages to scuttle this latest effort to keep the playing field between the muppets and everyone else. After all, someone has to leak critical rating agency information (such as the FT's break of a key S&P leak yesterday, or Nancy Pelosi knowing weeks in advance that Moody's... http://www.zerohedge.com/article/moodys-leaked-again-told-nancy-pelosi-will-probably-not-downgrade-us-weeks-ago-did-her-multi ...would not downgrade the US) to the media and/or trading entities.

(((Continue Reading this article Here))) http://www.zerohedge.com/news/live-hearing-whether-insider-trading-congress-should-be-illegal

---

Endangered Lawmakers Move To Back Bill Banning Congressional Insider Trading

http://thehill.com/homenews/house/195429-lawmakers-facing-tough-reelection-fights-back-bill-banning-congressional-insider-trading

By Peter Sullivan - 11/24/11

Politically vulnerable lawmakers are lining up as co-sponsors of legislation that would ban congressional insider trading.

---

Congressional Insider Trading Gone Wild

http://www.zerohedge.com/news/congressional-insider-trading-gone-wild

(TylerDurden of zerohedge) Back in May we penned, "Why A Hedge Fund Comprised Of Junior Congressional Democrats Should Outperform The Market By 9%" http://www.zerohedge.com/article/why-hedge-fund-comprised-junior-congressional-democrats-should-outperform-market-9 ...in which the simple conclusion was that insider trading is not only rampant in Congress, but completely unregulated, as it is perfectly legal for Congressional staffers to trade at their leisure on inside information: an exemption which the beta chasing 2 and 20 crowd on Wall Street would sell their first through fifth born to be granted, now that their glaring inability to generate alpha is laid out for all to see.

Tonight we were happy to see that 60 Minutes has finally brought this gross and criminal injustice to the general public, and we expect that Congress will promptly legislate itself into actually complying with laws meant for the mere mortals out there.

That said, we fully commiserate with the pathological excrement that makes up House of Representative these days: it is indeed a sad day when a Congressional member has to rely on honest work to make their millions as opposed to perfectly legal trading on inside information predicated upon laws that these very congress men and women legislate.

Something tells us all the world's banana republics are just staring at the US with sheer and utter amazement as layer after layer of the unprecedented depravity of American society is exposed for all to see.

From 60 Minutes - the part where Nancy Pelosi's face melts is 9:20 in. And speaking of Nancy Pelosi it may be time to revisit: " Moody's Leaked Again: Told Nancy Pelosi Will "Probably Not" Downgrade US Weeks Ago; Did Her Multi-Millionaire Investor Husband Know Too?" and "SEC To Investigate Trades Based On S&P Downgrade Inside Information" http://www.zerohedge.com/news/article/moodys-leaked-again-told-nancy-pelosi-will-probably-not-downgrade-us-weeks-ago-did-her-multi ...We wonder just how deep the SEC investigation has penetrated for it to have generated not even a peep 3 months later.

(Video) '60 Minutes'

http://www.cbsnews.com/video/watch/?id=7388130n

---

CNBC: Congressional Insider Trading

http://video.cnbc.com/gallery/?video=3000057623

(Wed 16 Nov 11 - 10:22 AM ET)

(VideoClip) Peter Schweitzer, author of "Throw Them All Out," discusses the ethics of the House and Senate and the problem of insider trading in the U.S. Congress. He talks about the willingness of the SEC to enforce the rules, given that they have to answer to Congress.

---

Congress Must IMMEDIATELY Pass HR 1148: The "Stop Trading On Congressional Knowledge" Act

Submitted by Tyler Durden on 11/14/2011

http://www.zerohedge.com/news/congress-must-immediately-pass-hr-682-stop-trading-congressional-knowledge-act

Update: we have learned that the current iteration of HR 682 is HR 1148... http://www.govtrack.us/congress/bill.xpd?bill=h112-1148 ...it's purpose is "To prohibit commodities and securities trading based on nonpublic information relating to Congress, to require additional reporting by Members and employees of Congress of securities transactions, and for other purposes" sponsored by Tim Waltz, and as of June 1 was... referred to the Subcommittee on the Constitution.

---