This week on 60 Minutes Steve Kroft did a segment on Congress members trading stock on inside information. Kroft found many instances where members of congress legally traded stock based on non-public information from Capitol Hill. One instance was in 2008 as a piece of legislation that would hurt credit card companies was making its way through congress. Nancy Pelosi purchased 5,000 shares of Visa at $44, two days later it was trading at the price of $64 (Pelosi made an easy $10,000) and the legislation then never made it through the House. Brian Baird, a former congressman from Washington state, mentions that in the past few years a whole new totally unregulated, $100 million dollar industry has formed in Washington called political intelligence. It employs former congressmen and former staffers to scour the halls of the Capitol gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it.
Should members of Congress be allowed to trade stocks based on inside information? What regulations should be imposed? There have been failed attempts- because why would Congressmen want to pass a piece of legislation that limits their abilities in the stock market?
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