Like everyone else, members of Congress are subject to current insider trading laws. However, current insider trading laws do not apply to nonpublic information about current or upcoming congressional activity — that’s because members of Congress aren’t technically obligated to keep that information confidential.
So, for instance, if a lawmaker learns an upcoming bill will grant a company a large government contract, which could boost that company’s stock, he or she is free to buy that stock ahead of the bill’s public introduction. This form of “insider trading” is one of the reasons why there are so many wealthy members of Congress, CBSNews.com reported earlier this year.
New legislation being introduced would make such transactions violations of House and Senate rules as well as enabling the Securities and Exchange Commission to prosecute cases of insider trading by members of Congress and congressional staff.
Let’s not forget how Sen. Mark Warner got rich. It wasn’t through hard work or being a tech visionary. It was because as a congressional staffer for then-Sen. Chris Dodd (D-Conn.) he had access to information about the emerging wireless industry that the general public did not have, particularly in the area of spectrum licensing. It will be interesting to see if any journalists finally take a hard look into how Warner amassed his fortune in light of this new movement to crack down on congressional insider trading as he truly is the poster boy for this congressional scandal.