Jerri-Lynn here: I’m inherently suspicious of legislative proposals being heavily touted by the core of the current Democratic leadership, particularly Chuck Schumer – even though pushback from Nancy Pelosi’s almost certainly a welcome sign. Nonetheless, there’s no doubt that current rules are too lax. As with so much financial regulation, the devil’s in the details. And as happened in the Dodd-Frank fiasco, I fear any reform current Congresscritters can agree will be overly complex and riddled with loopholes, so when all’s said and done, one wonders, what was the point?
Yet recall, we once knew how to enact toothsome reforms. Look at New Deal legislation, particularly the securities regulatory framework. So, I’ll just say here, the situation deserves careful scrutiny.
By Jake Johnson. Originally published at Common Dreams
The momentum behind a widely popular effort to ban stock trading by members of Congress is growing, with Senate Majority Leader Chuck Schumer reportedly instructing fellow Democrats to unite behind a specific legislative proposal.
“After weeks of silence, Senate Democratic leaders have asked lawmakers to propose improvements on rules governing congressional stock trading,” Insider reports. “In a call Friday, Democratic leadership staff told legislative directors for Democratic senators about their aspirations for bringing a congressional stock-trading ban bill to the floor of the U.S. Senate.”
The development comes weeks after Sen. Jon Ossoff (D-Ga.) ignored pushback from prominent Democratic leaders—including House Speaker Nancy Pelosi (D-Calif.)—and unveiled legislation that would bar members of Congress, their spouses, and their children from buying and selling stock while in office.
“It’s working. Keep pushing,” Ossoff tweeted Sunday, highlighting the Senate Democratic leadership’s openness to the proposed ban.
Thus far, just eight Senate Democrats have officially signed on as co-sponsors of Ossoff’s bill (S.3494), which he introduced alongside Sen. Mark Kelly (D-Ariz.) last month.
“It’s time for Congress to act and ban members from trading stocks while they’re in office,” Sean Eldridge, founder and president of Stand Up America, said Sunday.
Despite broad support from the public and growing backing from rank-and-file lawmakers, some Democratic leaders remain opposed to a prohibition on stock trading. House Majority Leader Steny Hoyer (D-Md.) said last week that he’s “not sure that it’s necessary” to enact such a ban given existing rules against insider trading—rules that critics say are far too lax and seldom enforced.
Schumer, for his part, said last month that he doesn’t “own any stocks” and that banning individual trading by sitting lawmakers would be “the right thing to do.”
It’s unclear where Sen. Joe Manchin (D-W.Va.), a key swing vote who owns a stake in his son’s West Virginia coal business, stands on the proposal.
“I don’t own any stocks, and I think that’s the right thing to do.”
Majority Leader Chuck Schumer comments on the recent push to bar members of Congress from trading individual stocks. pic.twitter.com/pZ3V7EE4pm
— Forbes (@Forbes) January 11, 2022
A recent analysis of financial documents by Capitol Trades and reporting from MarketWatch found that congressional lawmakers or members of their families traded an estimated $355 million worth of stock in 2021, a year in which the coronavirus pandemic killed hundreds of thousands of people across the U.S. and pushed many into financial ruin.
While insider trading has long been commonplace on Capitol Hill, suspiciously timed transactions during the pandemic—particularly soon after Covid-19 was detected in the U.S.—brought fresh attention to lawmakers’ use of secret information to buy and sell stock.
Former Sen. David Perdue (R-Ga.), Ossoff’s Republican opponent in the 2021 U.S. Senate runoff in Georgia, was a prolific stock trader, and he was accused of using insider information to buy shares of companies that stood to benefit from the pandemic.
“Recent revelations about stock trades at the outset of the Covid-19 pandemic and economic downturn, increasingly prevalent violations of the STOCK Act’s reporting requirements, and investigations and even convictions of members of Congress pertaining to insider trading have all served to galvanize public interest and media scrutiny around real and perceived corruption in Congress,” a coalition of 14 advocacy groups wrote in a letter endorsing Ossoff’s legislation last month.
“The public needs to know that Congress recognizes the issue of insider trading as a problem that undermines its own legitimacy and erodes the trust of voters,” the coalition added. “The good news is that Congress is able to respond to this concern in a meaningful way by advancing S. 3494 and sending it to President Biden’s desk for his signature.”