The recent expose’ on 60 minutes and in Newsweek regarding the “insider trading” scandal among U.S. legislators has fueled considerable debate about whether or not congress is ignoring their legal culpability and are “Above the Law” or if in fact they are “Outside the Law” and the insider regulations do not apply to them.
Consider that US Congressional representatives are elected to represent the people. Instead many are using information, garnered from their position, as an advantage to make considerable financial gains trading on nonpublic information. They are in congress because they were elected by the people, trusted to act in the best interest of the people with integrity. If that isn’t a person in a position of trust, I don’t know what is.
Many congressional representatives believe that the “insider trading” laws do not apply to them. This is the “Outside the Law” argument. A fair number of congressional representatives are taking a “who me” political strategy and racing to pass a law that would specifically forbid this type of activity because they truly believe that the laws do not apply to them. This rush to fix the problem is a smart political move that will likely never see the light of day or ever be written into law.
One obvious question is why our legislators believe that the laws that apply to the masses do not apply to them. It is rather dumbfounding that we even need to have this discussion. Likely, mine, is a naïve point of view that cannot survive the scrutiny of the fine print of the law and relies heavily on a solid ethical standard. Better to consult legal experts to form a more solid argument. Law professor, Donna Nagley of Indiana University was recently quoted in CBS news and presented the following points of law. The first point is “a lack of regard for the broad and sweeping duties of entrustment which attach to public office”. The second is a restricted view of the Supreme Court precedent for rule 10b-5 regarding the SEC liability imposed for insider trading. This also includes an argument, “that nonpublic congressional information constitutes property which, like congressional funds and tangible property, rightfully belongs to the federal government and its citizens”.
Professor Nagley also points out “that rule 10b-5 relies on a general prohibition against fraud and a long list of court precedents that define what is and isn’t allowed in terms of trading on inside information”.
Again, stock trading appears to be a rigged game run by the rich elite to continue to fill their own pockets. Another truth is that if you aren’t rich when you get into congress, you will be.
Likely nothing will change without continued public scrutiny and criticism. We need to keep the heat on!
If you are tired of trying to win in a rigged game, consider investing at least some of your wealth in precious metals including gold bullion. Click here to compare online gold dealers now.
Always remember that the rule with investments is to know what you are buying and don’t pay more than 5%-20% over the spot price of gold for your gold bullion.