Outsider Trading
Government organizations are having some troubles with insider trading, and itโs clear. For the last two weeks, weโve discussed the Fed insider trading scandal, which has been solved now with new policy regarding how Fed officials can trade. The US Senate also saw 2 cases of insider trading, which have been shooed to the side but itโs still in peopleโs minds. One more serious case regards federal judges. A Wall Street Journal report found that 131 federal judges violated law by hearing lawsuits regarding companies that they owned stock in, which is illegal for obvious reasons. It was revealed that these lawyers and their families were trading stocks as the lawsuits progressed further into court, which can reap you a lot of gains especially if you are trading biotech names, which face the most litigation cases and often have the most volatile moves.
Governments, naturally, want to prevent insider trading from occurring. Fortunately, insider trading is a bipartisan issue, and bipartisanship is occurring in the Capitol. Finally, right? The bill proposes judges to be required to report stock trades over 1,000 dollars within 45 days to prevent suspicious transactions. Itโs essentially placing federal judges under the same rules as the rest of the government, or the STOCK Act, which stands for โStop Trading on Congressional Knowledgeโ. Republican senators like John Cornyn and Democrats like Chris Coons are sponsoring the bill, and it also has a provision for an online database that keeps track of all purchases so that the public can see. This transparency is super important because it keeps federal members in check, and it keeps our financial system fair. Would you support this bill?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.