The Senate tightens up on insider trading

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The Senate tightens up on insider trading

Washington Post — THERE IS a certain belt-and-suspenders quality to the ban on insider trading by members of Congress that was just passed by the Senate. Current law may prohibit such practices. But to the extent that there is ambiguity, it is important, for purposes of both potential prosecution and public perception, to make clear that such activity is indeed illegal. If anything, the measure does not go far enough.

It is bad practice for members of Congress to own and trade in individual stocks. That is particularly true in areas of their direct involvement, such as defense stocks for members of the Armed Services committees. President Obama, in applauding the Senate vote, argued for “prohibiting elected officials from owning stocks in industries they impact.” But given lawmakers’ broad portfolios, the better approach would be for lawmakers to divest individual stock holdings in favor of mutual funds or to put their investments into a blind trust. An amendment to this effect, sponsored by Sens. Sherrod Brown (D-Ohio) and Jeff Merkley (D-Ore.) failed decisively, but lawmakers ought to consider the unattractive optics of owning individual stocks.

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