Lawmakers with stock holdings vote in ways that juice their portfolios, data shows

[ZiprHead]

Amid calls for stricter regulation of congressional stock ownership, researchers find that financial self-interest outweighs party, ideology and other factors in policy decisions

A series of well-timed stock trades early in the pandemic brought Justice Department scrutiny on at least five U.S. senators this year over potential insider trading, including Georgia Republicans Kelly Loeffler and David Perdue. Though the inquiries were dropped, both lawmakers have taken heat on the issue as their respective campaigns head into a January runoff election that will determine partisan control of the Senate.

The trades prompted renewed calls for stricter regulation of congressional stock ownership, with proposals ranging from a
ban on trading stock while in office to an outright prohibition on stock ownership for elected officials.

New research from political scientists Jordan Carr Peterson and Christian Grose underscores why tighter regulations might be necessary. They found that members of Congress who own stock tend to vote in ways that benefit their portfolios and that these decisions can’t be explained away by other factors, such as ideology or constituent interests.

 

[southernhybrid]

Yes. This is a problem. Sometimes I think that the only reason that Perdue wants to keep his Senate seat is so that he has access to information that others don't so he can manage his portfolio based on that info. Now, he claims that he has a financial manager taking care of his trades, but there was evidence that he sometimes tells his finance guy which stocks to buy or sell. It certainly looks like a conflict of interest when it comes to how some of these people manage their financial portfolios.

And, maybe some of you don't realize that people who work at CNBC aren't even allowed to own individual stocks. I remember when that rule was first put in place. It's odd and sad that workers for CNBC are held to higher standards than the people who are supposed to have Americans best interests in mind.

https://www.nytimes.com/2004/01/13/business/the-markets-cnbc-imposes-new-rules-on-trading-by-employees.html#:~:text=Taking%20one%20of%20the%20hardest%20lines%20to%20head,individual%20securities%2C%20other%20than%20those%20of%20their%20employers.[/URL

Sorry I can't copy and paste anything from that link, as I'm having problems with my computer this morning. The link is from 2004 when the rule was first put in place at CNBC. ( I need to go reboot ) It appears as if our Congress members are reaching new heights of potentially corrupt behavior.

[URL="https://www.nytimes.com/2004/01/13/business/the-markets-cnbc-imposes-new-rules-on-trading-by-employees.html#:~:text=Taking%20one%20of%20the%20h%20ardest%20lines%20to%20head,individual%20securities%20%2C%20other%20than%20those%20of%20their%20employer%20s"]https://www.nytimes.com/2004/01/13/business/the-markets-cnbc-imposes-new-rules-on-trading-by-employees.html#:~:text=Taking%20one%20of%20the%20h%20ardest%20lines%20to%20head,individual%20securities%20%2C%20other%20than%20those%20of%20their%20employer%20s

 

[Loren Pechtel]

Yup. As a general rule we should require lawmakers to put their investments in index funds, exchange-traded funds and like instruments.

I would grant an exemption for major stakes already held before they are elected (you don't make the politician sell off their company) and perhaps for any position already held.