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Congress Exempts Most Federal Workers From Key Insider Trading Reporting Requirement

Tyler Durden's picture




 

Back in 2012, amid "intense pressure from Obama" including an appeal for its passage in his 2012 State of the Union address, Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act (with 96-3 theatrical votes in the Senate, and 417-2 even more theatrical votes in the House) - a bill prohibiting the use of non-public information for private profit, including insider trading by members of Congress and other government employees. It is unclear why until 2012 it was perfectly legal for congress to trade on inside information, something we pointed out in May 2011 when we wrote that a "A Hedge Fund Comprised Of Junior Congressional Democrats Should Outperform The Market By 9%" as it turned out flagrant insider trading abuse occurred mostly within the democrat ranks of the House (compared to a mere 2%+ outperformance by Congressional stock trading republicans).

It turns out that any cynical skepticism regarding Congress' ability and willingness to police itself was well founded, as last night the House eliminated a "key requirement of the insider trading law for most federal employees, passing legislation exempting these workers, including congressional staff, from a rule scheduled to take effect next week that mandated online posting of financial transactions."

The reason why one will have to take Congress at its word that it is not breaking the law? Because apparently posting Congress' financial dealings online would be pose a "national risk" according to the National Academy of Public Administration.

Surely this explains why the bill was rushed and voted in the matter of hours: one can't have a debate over matters of "national security" especially if the financial well-being of Congress is at risk. As Washington Times recaps, "Senate Majority Leader Harry Reid, Nevada Democrat, introduced the bill on Thursday and had the chamber vote on it late that evening. The House took the bill up on Friday afternoon and passed it by unanimous consent, with no members objecting. Republican leaders did not give lawmakers the traditional three days to read the bill before holding a vote. One GOP aide told The Washington Times the three-day rule did not apply to Friday’s action because the bill came from the Senate, while another said the House moved quickly because of a Monday deadline for the new disclosure mandates to take effect."

In other words, while the STOCK Act passed nearly unanimously in 2012 just to show how "honest" congress is, the follow up legislation that effectively undoes the key reporting requirement of said anti-inside trading law passed just as unanimously, allowing congress to have its shady dealings cake, and eat its non-inside trading reputation too.

That both democrats and republicans rushed to pass this provision shows just how truly engrained the unwillingness for true transparency in Congress is.

Obviously, the justification spin for eliminating the key STOCK act provision was ready and just waiting to be unleashed:

House Majority Leader Eric Cantor's spokesman Rory Cooper told CNN the decision to enact new legislation now was in direct response to the study.

 

"In December when we extended the STOCK Act deadline for public disclosure of Financial Disclosures, we required a study by the non-partisan and independent National Academy of Public Administration. This was their recommendation, and the House and Senate agreed it was the best course of action for the time being," Cooper told CNN in a written statement.

In other words, according to the "nonpartisan and independent" NAPA, having Congressional financial documents online represents a national security risk. Because somehow terrorists will terrorize the US even more when they know on what days Nancy Pelosi bought and sold the S&P 500.

Federal employees began expressing concerns about the national security risks of posting personal financial information online soon after government agencies moved to implement the STOCK Act last year.

 

Online posting was supposed to begin August 31, 2012, but Congress passed extensions three separate times pushing off the compliance date.

 

In December, the last time the House and Senate approved another extension signed by the president, they also directed the National Academy of Public Administration (NAPA), a non-profit group of public management experts chartered by Congress, to study whether there were real security risks associated with putting this kind of financial information on the Internet.

...

Part of the law required that senior government officials’ financial disclosure reports — which they are already required to submit in paper — be made available online in a searchable, sortable format. The belief was that publishing them online would make it easier for reporters and the public to try to spot illicit dealings.

 

The online disclosure provisions had not yet taken effect, and Congress asked NAPA to review the law.

 

In a report release last month a five-member NAPA panel said online posting would mean more sensitive information about high-level government employees would be easily available, which would make identify theft easier.

 

An open, online, searchable and exploitable database of personal financial information about senior federal employees will provide easy access to ‘high quality’ personal information on ‘high value’ targets,” NAPA officials said in their report.

 

The Defense Department told NAPA that online disclosure would mean hostile nations would have easy access to sensitive personal information about top national security officials.

Because "hostile nations" have nothing better to do than trade alongside Congressmen with the usual 13F, 45-day delay. In the meantime, those who truly would benefit from this transparency: the media, or least those very few in the media who have not been bought by Congress just yet, and are willing to check which members of Congress are now actively breaking the STOCK law, will have their work cut out for them.

At least someone spoke up, although their objection will be promptly ignored and forgotten.

One advocacy group pushing for greater government transparency blasted the move, saying it “guts" the law.

 

"Not only does the change undermine the intent of the original bill to ensure government insiders are not profiting from non-public information, it sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online,” Lisa Rosenberg of the Sunlight Foundation wrote in a statement.

Yet, fundamentally all last night's accelerate revision to the STOCK act does is pray on the laziness of "terrorist" and, of course, reporters:

With this change those federal workers would still have to report any securities trades over the law's $1,000 threshold within 45 days. While these reports would be publicly available, they would no longer be posted online in a format that anyone can search or download.

So basically "hostile nations" can still access all the data, however it will be in paper format. And this avoids national security risks just how?

Of course, if indeed this is merely a bet on the laziness of the financial media, it is probably safe one. After all it appears that said financial media would rather spend hours discussing and lamenting the sad future of the financial media, especially how slideshows of kittens are part of the great profitability strategy... 

... than actually doing any financial media stuff, like reporting. After all why bother: one can always pray someone else will do the actual work, and everyone else can just do what modern "financial media" is so truly good at: CTRL-C and CTRL-V.

 

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Sat, 04/13/2013 - 13:09 | 3444691 timbo_em
timbo_em's picture

All men are equal. The fat pigs are just MOAR equal.

Sat, 04/13/2013 - 13:23 | 3444722 HoofHearted
HoofHearted's picture

Power corrupts. And the corrupt seem to be the ones who end up in power.

This is why I voted for Ron Paul and then for Gary Johnson. I thought they really didn't want the job so much as they thought the country was so fucked up that the country needed them right then. Next time I'm voting "Tyler Durden." At least the Tylers would share the insider information so that we could all make a little fiat....

Sat, 04/13/2013 - 13:27 | 3444742 TheFourthStooge-ing
TheFourthStooge-ing's picture

Congress exempts most federal workers from the consequences of their actions.

Sat, 04/13/2013 - 13:49 | 3444787 toys for tits
toys for tits's picture

Now the PM smackdown is becoming clearer.  

They instituted that, thinking it would keep the tin-foil types busy this weekend and so we would ignore this "routine" national security vote.

Sat, 04/13/2013 - 15:39 | 3445014 Xibalba
Xibalba's picture

and not a peep from anyone...even the Libertarians were too busy talking about gay rights to notice

Sat, 04/13/2013 - 16:47 | 3445122 imaginalis
imaginalis's picture

Anyone who still votes for any of these crooks deserves to be fleeced. 

Sat, 04/13/2013 - 20:05 | 3445463 Divine Wind
Divine Wind's picture

 

 

Anyone who still votes at all is simply wasting their time.

The system is far far too gamed.

 

 

Sat, 04/13/2013 - 21:26 | 3445680 smlbizman
smlbizman's picture

i think we probably should be looking at "post trade adjustments"...you know ..betting after the race has run....

Sat, 04/13/2013 - 13:52 | 3444797 OccupyTVstations
OccupyTVstations's picture

Wednesday: News breaks that Fed 'accidentally' sent insider info to TBTF banks and Congress.

Thursday: Harry Reid introduces bill, Congressional (+ staffers) trades must be kept secret.

Any questions?

Sat, 04/13/2013 - 14:03 | 3444820 McMolotov
McMolotov's picture

Yes. When do we decide that since the law doesn't apply to government officials, bankers, and other assorted well-connected assholes, the law no longer applies to us, either — at which point we commence taking their heads as trophies?

Sat, 04/13/2013 - 14:10 | 3444842 OccupyTVstations
OccupyTVstations's picture

As soon as someone figures out how to prevent the next fluoride delivery to the NYC and/or DC water supply.

Sat, 04/13/2013 - 20:17 | 3445485 jimmytorpedo
jimmytorpedo's picture

Check the ingredients on Prozac.

It's made from flouride.

Tap water is Prozac.

Makes sense now doesn't it.

Sun, 04/14/2013 - 05:43 | 3446135 bunnyswanson
bunnyswanson's picture

http://www.youtube.com/watch?feature=player_embedded&v=R3nXvScRazg#!

29 years ago a Russian KGB defector predicts what we are seeing and how we have reached this point.

The danger is real, he said. 

Sat, 04/13/2013 - 16:22 | 3445092 Pseudo Anonym
Pseudo Anonym's picture

sure thing

the law no longer applies to us, either — at which point we commence taking their heads as trophies?

here's the how to demo: http://tinyurl.com/czegrmg

Sat, 04/13/2013 - 20:11 | 3445472 Divine Wind
Divine Wind's picture

 

 

"at which point we commence taking their heads as trophies?"

 

YUP.

There must come a time where people, EN MASS, start standing up. Sending your corrupt politicians Twitter messages, Facebook posts and email messages is a joke.

 

 

Sat, 04/13/2013 - 18:03 | 3445258 Lost Word
Lost Word's picture

But Insider trading by CONgress is still illegal?

Just reporting not necessary?

Easier to hide, harder to prosecute?

Sat, 04/13/2013 - 20:20 | 3445491 jimmytorpedo
jimmytorpedo's picture

Insider trading by CONgress has never been illeagal.

This is for the Postal Workers and TSA.

Sat, 04/13/2013 - 13:42 | 3444776 wee-weed up
wee-weed up's picture

Rules are for thee...

not for me!

Sat, 04/13/2013 - 20:50 | 3445596 monad
monad's picture

We are born equally helpless and we die once. We all get what we are willing to settle for. Human intelligence is pathetic. Every life is a riddle, otherwise Bobby Sands is right now consulting a demiurge what to do with Thatcher. I have James Clerk Maxwell's genes, whereas Darwin was an inbred mutant; like Clinton. I am not going to help these darwinitic mutants. They are not equal to the offices they hold. Tiocfaidh ar la

Sun, 04/14/2013 - 23:06 | 3446239 monad
monad's picture

.

Sat, 04/13/2013 - 13:09 | 3444692 alien-IQ
alien-IQ's picture

Ok, so let me see if I got this right:

The Federal government passes a law that prohibits Federal employees from trading on insider congressional information...and then attaches an amendment to that law that EXEMPTS Federal employees from said law?

Are you fucking kidding me? Seriously?

Sat, 04/13/2013 - 13:10 | 3444694 Tyler Durden
Tyler Durden's picture

Obviously you do not care about the "national security"

Sat, 04/13/2013 - 13:17 | 3444717 alien-IQ
alien-IQ's picture

Nor am I worried about being attacked by vampires while jogging at night...but I'm just crazy like that.

Sat, 04/13/2013 - 13:28 | 3444738 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Nor am I worried about being attacked by vampires while jogging at night...but I'm just crazy like that.

Tagged as domestic terrist.

Sat, 04/13/2013 - 14:18 | 3444864 alien-IQ
alien-IQ's picture

again?....(sigh)

Sat, 04/13/2013 - 15:40 | 3445018 knukles
knukles's picture

3 strikes and you're out, dude...

Sat, 04/13/2013 - 18:41 | 3445314 disabledvet
disabledvet's picture

they're down 25 billion in the Facebook "phuck their minds" IPO...and they need to get that money now...OR ELSE! Show a little understanding will ya? Besides if Japan and South Korea force the USA's hand into a pre-emptive strike into the North well, let's just say those are powerful enemies to have...probably the most powerful in American History. Now let's here from the REAL B-52's shall we: http://www.youtube.com/watch?v=leohcvmf8kM phuck you Kim Jong Last. i hope they'll be rocking downtown Seoul next weekend...with a million people out just for fun.

Sat, 04/13/2013 - 19:43 | 3445409 Milestones
Milestones's picture

"Cast your fate to the wind" I,m in a misic thing tonite.        Milestones

Sun, 04/14/2013 - 15:15 | 3447181 Colonel Klink
Colonel Klink's picture

We all know who the REAL bloodsuckers are!

Sat, 04/13/2013 - 13:15 | 3444705 Tinky
Tinky's picture

Your surprise is understandable. But I just finished a séance in which I was communicating with George Orwell, and after I quoted this article, he scoffed and assumed that we were having a transmission problem.

Sat, 04/13/2013 - 16:49 | 3445128 kchrisc
kchrisc's picture

The real trick will be exempting themselves from the guillotine.      hujel

Sat, 04/13/2013 - 20:19 | 3445489 Divine Wind
Divine Wind's picture

 

 

Ain't gonna happen.

Oath Keeps my ass.

 

Sat, 04/13/2013 - 13:11 | 3444695 williambanzai7
williambanzai7's picture

There is an evil hostile nation called Transparency and Ethics. 

Sat, 04/13/2013 - 16:19 | 3445088 YHC-FTSE
YHC-FTSE's picture

Apparently they can launch WMDs at us in 45mins! Their leader calls himself O'Interest. Conflict O'Interest. 

Sat, 04/13/2013 - 13:11 | 3444698 Burt Gummer
Burt Gummer's picture

That figures, one set of rules for the rich and one set of rules for the poor.

http://www.youtube.com/watch?v=ZS2Z19yTuPI

Sat, 04/13/2013 - 13:12 | 3444699 Ignatius
Ignatius's picture

Ah, they're being forced to expand the franchise... good move, I support it.  /sarc

Sat, 04/13/2013 - 13:14 | 3444706 earleflorida
earleflorida's picture

... and, they all took comfort in the devine province of rome--  minding their selfish affairs, and counting their dilluted silver and polished gold... all the while the barbarian's were at the four gate's-- we all know how the story ends...

Sat, 04/13/2013 - 13:16 | 3444707 A Lunatic
A Lunatic's picture

Criminals, every last damned one of them.........

Sat, 04/13/2013 - 13:21 | 3444719 Pairadimes
Pairadimes's picture

Translation: Can't let the bloggers see this shit, or anything could happen.

Sat, 04/13/2013 - 13:22 | 3444724 ISEEIT
ISEEIT's picture

FORWARD!!

Sat, 04/13/2013 - 16:07 | 3445062 OneTinSoldier66
OneTinSoldier66's picture

The following is something I saw someone post just the other day. I can't remeber who it was but I like it a lot...

 

FAIRWARD!

Sat, 04/13/2013 - 13:26 | 3444732 Yen Cross
Yen Cross's picture

      Nancy Pelosi must have  left a 10 foot 'snail track' on the senate floor, after that was passed.

Sat, 04/13/2013 - 16:49 | 3445125 imaginalis
imaginalis's picture

I would imagine her to be as dry as the Sahara desert

Sat, 04/13/2013 - 20:22 | 3445501 jimmytorpedo
jimmytorpedo's picture

You're both grossing me out.

Sat, 04/13/2013 - 13:28 | 3444741 beavertails
beavertails's picture

They won't prosecute any REAL insiders anyways so the exemption makes sense as there will be less SEC studs watching PORN.

Sat, 04/13/2013 - 13:35 | 3444753 Van Halen
Van Halen's picture

Obama, the transparent president, bringing us all together! They're the ones we've been waiting for! Forward!

Sat, 04/13/2013 - 13:35 | 3444755 Mark123
Mark123's picture

God....just imagine the consequences of some remote chance that some undefined potential identity theft of a federal government employee occurred!   Unthinkable.

 

It is far better to operate our government under a cloak of secrecy to avoid that potential threat.  I mean to say, we all trust these guys 100% anyways.

Sat, 04/13/2013 - 13:36 | 3444758 max2205
max2205's picture

Same as it ever was.....

Sat, 04/13/2013 - 13:45 | 3444783 Zola
Zola's picture

It's only "fair"

Sat, 04/13/2013 - 13:54 | 3444802 H E D G E H O G
H E D G E H O G's picture

does anyone know of a wall in DC that would be long enough to line all of the fucking bastards up for a firing squad? looks like the only way this shit is ever going to be corrected.

Sat, 04/13/2013 - 14:25 | 3444886 Seasmoke
Seasmoke's picture

If not , use the wailing wall.

Sun, 04/14/2013 - 11:25 | 3446502 Disenchanted
Disenchanted's picture

+1

At certain times there's usually a goodly amount of posturing US politicians @ that 10-20.

Sat, 04/13/2013 - 14:57 | 3444955 ebworthen
ebworthen's picture

The Vietnam War Memorial and a bunch of Vets would work, but they probably wouldn't want to damaage the wall of names behind.

Sat, 04/13/2013 - 15:14 | 3444979 ParkAveFlasher
ParkAveFlasher's picture

Use dums dums.  There should be plenty lying around.

Sun, 04/14/2013 - 11:16 | 3446484 Disenchanted
Disenchanted's picture

The Vietnam Memorial wall? It would be a good starting point...and symbolic irony as well.

Since this is the end of page 1 of the posts somebody has probably already beaten me to a/this suggestion.

Sat, 04/13/2013 - 13:53 | 3444803 Kastorsky
Kastorsky's picture

only executions can fix the county now.

With total assets confiscation of entire family tree.

Sat, 04/13/2013 - 14:00 | 3444816 Gringo Viejo
Gringo Viejo's picture

Hmmmmmmmmmmmmm.....................

 

"It's Good To Be The King."

Sat, 04/13/2013 - 14:02 | 3444821 jonjon831983
jonjon831983's picture

It's good to be the one close to the king... and second to that it's good to be close to those who are close to the king.

 

Being king in general can be precarious if you lose support.

Sat, 04/13/2013 - 14:41 | 3444919 Kirk2NCC1701
Kirk2NCC1701's picture

Ah, the Shadows of Powers.  The Power Behind The Throne (and their families & friends). /s

Sat, 04/13/2013 - 15:38 | 3445013 knukles
knukles's picture

All FUCKING government employees?
Jesus Christ
They've broadened the scam!

Sat, 04/13/2013 - 14:08 | 3444837 mfoste1
mfoste1's picture

these people are the filth of the earth. their existence is nothing more than that of a parasite

Sat, 04/13/2013 - 14:31 | 3444895 uno
uno's picture

if not for zerohedge it would never be reported

Sat, 04/13/2013 - 14:32 | 3444897 Kirk2NCC1701
Kirk2NCC1701's picture

There are days when I swear that Obama & Team are The Manchurian Candidate & The Fifth Column.  No foreign power could wish for a better agent to ruin the country more profoundly with... charm and "good intentions".  I swear.

Sat, 04/13/2013 - 14:59 | 3444960 Bingfa
Bingfa's picture

A good Friend has a theory that everything left unchecked will eventually buckle under it's own weight....

after watching all this for the past few years I am beginning to believe that's all the hope we got.

 

 

Sat, 04/13/2013 - 21:27 | 3445682 monad
monad's picture

Yeah I liked him too. But he was one of them, and they want us dead.
Stiglitz is out.

Sat, 04/13/2013 - 14:53 | 3444944 ebworthen
ebworthen's picture

Rule-of-law deader than the economy and sound money (which are being given Last Rites).

Sat, 04/13/2013 - 17:26 | 3445199 yogibear
yogibear's picture

The rule-of-law h ave been replaced by the law-of-the-jungle and unsound money so act accordingly. 

Sat, 04/13/2013 - 15:14 | 3444981 steelrules
steelrules's picture

When do we start building the gallows?

Sat, 04/13/2013 - 16:14 | 3445073 FieldingMellish
FieldingMellish's picture

Fuck the gallows. Some piano wire and a grove of sturdy oak trees should do nicely.

Sat, 04/13/2013 - 15:38 | 3445011 FieldingMellish
FieldingMellish's picture

What a sad state this world has entered into where corruption is considered a right for a select few to be protected by law.

Sat, 04/13/2013 - 16:06 | 3445061 Goldilocks
Goldilocks's picture

"Do as I say, not as I do."

Sat, 04/13/2013 - 16:16 | 3445081 q99x2
q99x2's picture

I do think that each election shows some change but not enough. I guess there comes a point where ineffective change leads to revolution and/or a change in the form of government.

I'm not sure why joe weisenthatl is on the panel. Anything he is involved with I refuse to participate in. eg. the business insider.

Sat, 04/13/2013 - 16:26 | 3445095 holdbuysell
holdbuysell's picture

How to disseminate this public information broadly:

Set up a website business that requests on a 45-day periodic basis all $1000+ in value trades by all of the US' Finest.

Receive said public documentation. Scan it. Post the available data to website for free downloading.

Fund said website by advertising model.

Sat, 04/13/2013 - 19:58 | 3445443 Milestones
Milestones's picture

Thanks for Benito's quotes.           Milestones

Sat, 04/13/2013 - 21:19 | 3445665 monad
monad's picture

I prefer Vilfredo Pareto. As forced catholics go. Ayn Rand would have liked him. Isn't it nice we get to armchair judge our ancestors, as we hurtle blindly into the future?

Limestones

Sat, 04/13/2013 - 16:50 | 3445129 imaginalis
imaginalis's picture

There is no greater threat to National Security than themselves

Sat, 04/13/2013 - 17:20 | 3445184 yogibear
yogibear's picture

The criminals are running the Justus system so proceed with your illegal behavior as usual.

Beware if your honest or a whistle-blower you may end up in jail.

 

Sat, 04/13/2013 - 21:06 | 3445640 monad
monad's picture

All you need to know about RP is that he thrived in the swamp for 30 years, and his british israelite son inherited his contributor list and shared it with Michelle Bachmann.

Sat, 04/13/2013 - 22:47 | 3445814 torabora
torabora's picture

cocksuckers

Sun, 04/14/2013 - 03:06 | 3446078 headless blogger
headless blogger's picture

Didn't Miss Suzy Homemaker, Martha Stewart, go to jail for same as these Congressional Crooks and liars are doing?

It makes you wonder about What they are using the N.Korea garbage to distract people from. Probably something even worse than this.

 

Sun, 04/14/2013 - 05:32 | 3446127 Oldrepublic
Oldrepublic's picture

quote from a zerohedge contributor:

biggest criminal syndicate in human history

Do NOT follow this link or you will be banned from the site!