Fact Check: congress doesnt do insider training

Insider Trading and Congress: A Detailed Examination

Introduction

The claim that "Congress doesn't do insider trading" suggests that members of Congress are not involved in insider trading activities, which are illegal practices where individuals trade stocks based on non-public, material information. This assertion raises questions about the ethical standards and regulations governing Congress members' financial activities, particularly in light of ongoing legislative efforts aimed at prohibiting such practices.

What We Know

1. Current Legislative Proposals: Several bills have been introduced in the 118th Congress aimed at addressing insider trading among members of Congress. The Prohibit Insider Trading Act (H.R. 1138) seeks to prohibit members of Congress and their spouses from holding or trading certain investments, specifically individual stocks, unless they are in diversified investment funds or U.S. Treasury securities 26. Another bill, the Ban Congressional Stock Trading Act, introduced by Senators Jon Ossoff and Mark Kelly, requires members of Congress to either divest their stock holdings or place them in a blind trust 910.

2. Historical Context: Insider trading laws apply to all individuals, including members of Congress. The Securities Exchange Act of 1934 prohibits insider trading, but there have been ongoing debates about whether Congress members should face stricter regulations due to their access to sensitive information. Previous studies have indicated that members of Congress have, at times, engaged in trading activities that could be perceived as insider trading 7.

3. Public Perception and Accountability: There is significant public concern regarding the ethical implications of stock trading by Congress members, particularly when they are privy to information that could affect stock prices. This has led to calls for greater transparency and accountability within Congress 5.

Analysis

The claim that "Congress doesn't do insider trading" is complex and requires a nuanced understanding of both the legal framework and the ongoing legislative efforts.

• Legislative Efforts: The introduction of multiple bills aimed at curbing insider trading among Congress members indicates a recognition of the issue within the legislative body itself. The existence of these bills suggests that there is at least some acknowledgment that insider trading could be a concern among lawmakers 129. However, the fact that such legislation is still being proposed implies that there may not be sufficient existing regulations to prevent insider trading effectively.

• Source Reliability: The sources cited, including official congressional records and statements from lawmakers, are generally reliable as they come from government websites and reputable news outlets. However, the motivations behind the introduction of these bills should be considered. For instance, lawmakers may introduce legislation in response to public pressure rather than a genuine commitment to reform, which could reflect a conflict of interest 59.

• Research Findings: Academic research, such as that by Professor Sarah Williams, suggests that there is a need for more stringent regulations regarding congressional trading practices. Her upcoming publication in a law review indicates a scholarly interest in this area, although the specifics of her findings are not yet available 7.

• Public Sentiment: The public's perception of Congress members engaging in stock trading is often negative, particularly when it appears that they might be using privileged information for personal gain. This sentiment can influence legislative action, as lawmakers may feel pressured to act against perceived unethical behavior 5.

Conclusion

Verdict: False

The assertion that "Congress doesn't do insider trading" is false. Evidence indicates that members of Congress have engaged in trading activities that could be construed as insider trading, and ongoing legislative efforts to address this issue further underscore the complexity of the situation. The introduction of multiple bills aimed at regulating congressional trading practices suggests that there is a recognition of potential ethical concerns, indicating that insider trading is indeed a relevant issue among lawmakers.

However, it is important to note that while there are legislative proposals aimed at curbing insider trading, the existence of these proposals implies that current regulations may not be sufficient to prevent such activities effectively. Additionally, the motivations behind these legislative efforts can vary, and public pressure may play a significant role in prompting action.

Limitations in the available evidence include the lack of comprehensive data on the frequency and nature of insider trading among Congress members, as well as the potential biases in public perception and legislative motivations. As such, while the claim is deemed false, the nuances surrounding congressional trading practices warrant careful consideration.

Readers are encouraged to critically evaluate information regarding insider trading and congressional ethics, as the landscape is continually evolving and subject to interpretation.

Sources

1. S.693 - Eliminating Executive Branch Insider Trading Act. Congress.gov
2. Prohibit Insider Trading Act 118th Congress (2023-2024). Congress.gov
3. Prohibit Insider Trading Act 118th Congress (2023-2024). Congress.gov
4. H.R. 6141 (118 th ): Insider Trading Prevention Act. GovTrack.us
5. Senators, Representatives Unveil Bipartisan Legislation to End Corrupt Stock Trading Activities by Members of Congress. Merkley.senate.gov
6. H.R. 1138 (118 th ): Prohibit Insider Trading Act. GovTrack.us
7. Professor Sarah Williams’ Research on Congressional Insider Trading to be Published by Cardozo Law Review. Dickinson Law
8. Eliminating Executive Branch Insider Trading Act (2023 - S. 693). GovTrack.us
9. Sens. Ossoff, Kelly Introduce Bill Banning Stock Trading by Members of Congress. U.S. Senator for Georgia Jon Ossoff
10. Kelly, Senate Colleagues Call on SEC to Investigate Possible Trump Tariff Market Manipulation Insider Trading. Kelly.senate.gov