Yukishiro1 posted:
theredkay1 posted:
I dont quite understand the assumption that congress is exempt from this rule. It seems to be Congressmen saying 'we havent been prosecuted before, therefore we are exempt.' The law is very broad and there is no reason to think that congress is exempt just because nobody has prosecuted them in the past.
I thought there was a specific exemption for Congresspeople who got their insider information from their job.
I thought so too when the story first broke a few months ago and it surprised me....
But the actual insider trading law is very vague. It basically says you cant buy/sell based on fraud or deception. The courts have interpreted that having non-public information and acting on it constitutes fraud....you are defrauding the person on the other side of the transaction.
There is no law that exempts congress from fraud.
current head of the SEC posted:
The general legal principles described above apply to all trading within the scope of Section 10(b) and Rule 10b-5. There is no reason why trading by Members of Congress or their staff members would be considered “exempt†from the federal securities laws, including the insider trading prohibitions, though the application of these principles to such trading, particularly in the case of Members of Congress, is without direct precedent and may present some unique issues.
http://newsroom-magazine.com/2011/government-agencies/sec/sec-enforcement-chief-tells-senate-congress-not-exempt-from-insider-trading-law/
