When Chris Collins, Trump’s first endorser, got caught making a stock dump while on the WH lawn, one assumed that other legislators would be chastened, but no, during the worst ever days of the stock market several Senators seem to have gotten caught. It was a small number but clearly about the market drop as the virus spread. The enforcement task will include evidence of inside knowledge.
If Trump wants to call the COVID-19 crisis a “war”, these are war profiteers. And since they’re members of the GOP voting against removal of IMPOTUS, they have even more reason for their resignations.
Darn that crony capitalism, kleptocracy, and Republican character traits.
“The Stop Trading on Congressional Knowledge (STOCK) Act (Pub.L. 112–105, S. 2038, 126 Stat. 291, enacted April 4, 2012)…prohibits the use of non-public information for private profit, including insider trading by members of Congress and other government employees.”
en.wikipedia.org/…
(Sec. 6) Amends the Ethics in Government Act of 1978 (EGA) to require specified individuals to file reports within 30 to 45 days after receiving notice of a purchase, sale, or exchange which exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities and subject to any waivers and exclusions.
Lists such individuals as: (1) the President; (2) the Vice President; (3) executive officers or employees, including certain special government employees and members of a uniformed service; (4) appointed administrative law judges; (5) executive branch employees in positions excepted from the competitive service because of their confidential or policymaking character (except those excluded from such exception by the Director of the Office of Government Ethics [OGE]); (6) the Postmaster General, the Deputy Postmaster General, each Governor of the Board of Governors of the U.S. Postal Service, and certain U.S. Postal Service officers or employees; (7) the OGE Director and each designated agency ethics official; (8) civilian employees of the Executive Office of the President (other than a special government employee) appointed by the President; (9) Members of Congress; and (10) congressional officers and employees.
(Sec. 18) Amends the federal criminal code to subject to a fine or imprisonment of up to 15 years, or both, as well as possible disqualification from holding federal office, certain covered government persons, in addition to Member of Congress and congressional employees, who with the intent to influence, on the basis of partisan political affiliation, an employment decision or employment practice of any private entity: (1) takes or withholds, or offers or threatens to take or withhold, an official act; or (2) influences, or offers or threatens to influence, the official act of another.
Extends the meaning of "covered government person" (currently restricted to Members of Congress and congressional employees) to include the President, Vice President, an employee of the U.S. Postal Service or the Postal Regulatory Commission, or any other executive branch employee.
www.congress.gov/...
Friday, Mar 20, 2020 · 4:23:19 AM +00:00 · annieli
1/ Today @propublica reported that Senator Burr sold between $582,029 and $1.56 million of his stock holdings on February 13 in 29 separate transactions, including companies vulnerable to a slowdown, like a hotel chain.
2/ This report follows a @npr scoop by @timkmak that Burr warned donors who paid between $500 and $10,000 that coronavirus is "more aggressive in its transmission than anything that we have seen in recent history" while he publicly downplayed the threat.
3/ This has understandably led to calls for Burr to resign, because he was warning rich donors about the virus and selling stock while he (and Trump) misled the public by downplaying the threat.
But whether it is insider trading that is illegal (or criminal) is complicated.
4/ Insider trading is when someone learns of "material, nonpublic information" and uses that to trade stock. That means that the person knew something the public didn't know, which can sometimes give a trader a big advantage over the public.
5/ Insider trading by Senators and Members of Congress was *legal* until the STOCK Act of 2012. (See below.)
Interestingly, Burr was one of only three Senators to vote against the STOCK Act.
en.wikipedia.org/wiki/STOCK_Act
6/ Insider trading is only illegal when the information is "material," meaning that it would have caused a significant change in stock price.
It is also only illegal when the information is known by the trader and is not public.
7/ To prove Burr engaged in insider trading, the government would have to prove he knew of information that -- if the public knew about it -- would cause a significant change in the price of stocks that he sold.
I realize it seems obvious to many of you that this was the case.
8/ But the government (SEC or DOJ) would have to prove each of those things. So first of all, they would need to prove exactly what Burr knew and find some piece of information that was not known by the public that was so important that it would have changed stock prices.
9/ Remember that there was a *lot* of public information and discussion already about the coronavirus. I suspect that his lawyers would spend a lot of time finding articles by experts that warned of the threat. They would argue that what Burr learned was essentially public.
10/ In addition, they would argue the information was not "material" because there was no way Burr would have known that it would have caused a significant change in price in the particular stocks that he sold.
They would claim he couldn't have predicted a recession in advance.
11/ I'm not saying that these arguments would be successful. But it's complicated, and the first step is for the SEC and DOJ to investigate this matter.
There is certainly enough information here to launch an investigation, and there should be a bipartisan call for one.
12/ Not all insider trading is prosecuted criminally. An inquiry by the SEC, which policies the stock markets, is a good starting point. There is a far higher burden of proof in a criminal case.
The SEC should investigate this matter and see where the evidence leads. /end
ADDENDUM: Another hurdle for SEC/DOJ would be that the STOCK Act is a fairly new statute that has not been used in the context of information that is not specific to an individual company.
Prior cases were based on corporate insiders, not governmental "insiders" under the Act.