Both Democrats and Republicans on the House Financial Services Committee advocated new restrictions on insider trading Tuesday.
“This is about restoring faith,” said Representative Tim Walz, a Minnesota Democrat who is sponsoring legislation to ban insider trading. “If you think a 9 percent approval rating is bad, don’t do anything, drag it out and watch what happens,” he said, referring to polling on Americans’ approval of Congress.
House Financial Services Committee chairman Spencer Bachus, an Alabama Republican, said the panel would vote on legislation next week. “It is absolutely essential that we do restore the public’s trust,” said Bachus. “If this is the answer, so be it.”
This isn't the first time that restrictions have been proposed. There have been previous efforts made, but they all failed to advance in Congress.
And although those earlier efforts failed, it has suddenly become a topic of debate after a report last month by the CBS News program “60 Minutes" claimed that members of Congress bought stock in companies during debates on legislation that might affect the businesses.
As reported earlier on The Blaze, since the "60 Minutes" report was originally released, voters have been extremely upset with the fact that none of the investments were illegal (technically speaking).
But let's pause for a moment and reflect on the irony of Bachus commenting on the new restrictions.
Recall that Bachus was among the lawmakers mentioned in the “60 Minutes” report. CBS reported that during the 2008 financial crisis, Bachus, then the ranking Republican on the Financial Services Committee, bet stock prices would fall while being briefed privately that a global crisis might be imminent. In a statement at the time, Bachus’s office denied he ever traded on nonpublic information.
Still, the CBS report led lawmakers concerned with public perception to take another look at legislation first introduced in 2006 by Representative Louise Slaughter (D-NY). Reintroduced this year by Representative Walz, the measure would label as securities fraud any trading on legislation information by lawmakers or members of staff. The bill would require all trades of more than $1,000 be reported within 90 days.
The bill would require regulators to draft rules barring individuals and political intelligence firms from selling nonpublic information obtained from federal employees, and would require any firms or individuals involved in political intelligence to register in the same way as federal lobbyists.
Will the House Financial Services Committee actually restrict Congressional insider trading, or will this most recent attempt to curb the practice end up like all the others?
[Editor's note: portions of the above are from an article that originally appeared on Wall St. Cheat Sheet.]