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Guess which is number 1.
Congress likes to trade stocks as much as Raj Rajaratnam.
Pictured above: Raj's investments not working out too well for him.
A study by Professor Alan Ziobrowski at Georgia State University concluded legislators in Congress make “significant abnormal returns.”
“How do politicians who arrive in Washington, D.C. as men and women of modest means leave as millionaires?” Sarah Palin asked in the Wall Street Journal.
Here's an answer to her question: “We have every reason to believe they are trading on information that the rest of us don’t have,” reports Ziobrowski.
Simply put, members of Congress are making millions through insider trading. Keep in mind, Martha Stewart went to jail and hedge-funder Raj Rajaratnam was fined $92 million (and will also go to jail) because they dabbled in insider trading.
But they were just voters.
Members of Congress have been using non-public information to make stock trades--and there's no law against it which, technically, mean that they are doing it legally.
How do they get away with it? They just don't pass a law against themselves, reports CBS News.
“The Securities and Exchange Act does not apply to members of Congress, congressional staff, or even lobbyists," says Craig Holman at consumer watchdog organization Public Citizen.
Each year, the Center for Responsive Politics researches the finances of the U.S. Congress.
While insider trading laws do not apply to Senators and House members, they are required to file annual disclosures of their holdings and investments.
These are the 50 most popular stocks in Congress, according to the number of members currently invested in each stock:
- General Electric (NYSE:GE) 94 members
- Protecter & Gamble (NYSE:PG) 74 members
- Cisco Systems (NASDAQ:CSCO) 72 members
- Microsoft (NASDAQ:MSFT) 70 members
- Bank of America (NYSE:BAC) 68 members
- Pfizer Inc. (NYSE:PFE) 61 members
- AT&T (NYSE:T) 57 members
- Intel Corp. (NASDAQ:INTC) 54 members
- Johnson & Johnson (NYSE:JNJ) 54 members
- Verizon Communications (NYSE:VZ) 54 members
- Exxon Mobil (NYSE:XOM) 53 members
- Apple (NASDAQ:AAPL) 51 members
- Coca-Cola (NYSE:KO) 49 members
- JP Morgan (NYSE:JPM) 49 members
- PepsiCo Inc. (NYSE:PEP) 47 members
- Wells Fargo (NYSE:WFC) 45 members
- Berkshire Hathaway (NYSE:BRKA) 43 members
- Walt Disney (NYSE:DIS) 41 members
- Home Depot (NYSE:HD) 40 members
- Hewlett-Packard (NYSE:HPQ) 38 members
- McDonald’s (NYSE:MCD) 38 members
- Merck & Co (NYSE:MRK) 37 members
- Citigroup (NYSE:C) 37 members
- Abbott Laboratories (NYSE:ABT) 35 members
- Wal-Mart (NYSE:WMT) 31 members
- 3M Co (NYSE:MMM) 30 members
- Oracle Corp (NASDAQ:ORCL) 30 members
- Apache Corp (NYSE:APA) 29 members
- Qualcomm Inc (NASDAQ:QCOM) 28 members
- Google (NASDAQ:GOOG) 27 members
- Ford Motor (NYSE:F) 26 members
- Conocophillips (NYSE:COP) 26 members
- Goldman Sachs (NYSE:GS) 26 members
- Time Warner (NYSE:TWX) 26 members
- United Technologies (NYSE:UTX) 25 members
- Chevron Corp (NYSE:CVX) 25 members
- Bristol-Myers Squibb (NYSE:BMY) 25 members
- BP (NYSE:BP) 24 members
- Amgen Inc (NASDAQ:AMGN) 24 members
- Duke Energy (NYSE:DUK) 24 members
- Emerson (NYSE:EMR) 24 members
- Kraft Foods (NYSE:KFT) 24 members
- Teva Pharmaceutical Industries (NASDAQ:TEVA) 24 members
- Schlumberger (NYSE:SLB) 23 members
- EMC Corp (NYSE:EMC) 23 members
- Comcast Corp (NASDAQ:CMCSA) 23 members
- Altria Group (NYSE:MO) 23 members
- CVS Caremark (NYSE:CVS) 22 members
- Devon Energy (NYSE:DVN) 21 members
- Caterpillar Inc (NYSE:CAT) 21 members
[Editor's note: portions of the above originally appeared on Wall St. Cheat Sheet.]
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