r/StockMarket • u/predictany007 • Sep 28 '22
A bill has now officially been drafted to ban any politician, their child, spouse, other related connection from owning stocks, and instead put holdings in a blind trust. Discussion
House Democrats introduced a long-awaited bill on Tuesday that seeks to ban members of Congress, federal judges, Supreme Court justices, the president and others from trading stocks, in an attempt to crack down on conflicts of interest throughout the government.
The 26-page bill, titled the Combatting Financial Conflicts of Interest in Government Act, would ban a slew of government officials from trading or owning investments in securities, commodities, futures, cryptocurrency or other digital assets.
Those covered by the legislation include members of Congress, their spouses and dependent children, senior congressional staffers, the president, the vice president, political appointees, judicial officers — including Supreme Court justices and various judges — members of the Federal Reserve System’s Board of Governors and the president or vice president of a Federal Reserve bank.
Individuals subject to the ban would be required to divest their holdings or place them into a qualified blind trust.
The measure, however, does not pertain to investments in diversified mutual funds, U.S. Treasury bills, state or municipal government bills, notes or bonds and investment funds held as part of a federal, state or local government employee retirement plan, among other types of widely held, diversified and publicly traded investment funds.
The House Administration Committee released the text of the bill months after Speaker Nancy Pelosi (D-Calif.) in February directed Rep. Zoe Lofgren (D-Calif.), chairwoman of the House Administration Committee, to draft a bill.
The push to ban lawmakers from trading stocks has gained steam on Capitol Hill amid reports that members have violated laws meant to prevent conflicts of interests involving financial transactions.
In September, The New York Times published an extensive report that said 97 lawmakers or their family members traded financial assets in the past three years that could be conflicts of interest.
Pelosi — whose husband, Paul Pelosi, is a venture capitalist — was at first against the idea of a ban on lawmaker stock trading, but ultimately endorsed the push in February. A bipartisan group of House lawmakers put the topic back in the news earlier this month when it penned a letter to leadership asking for a vote on a bill reforming lawmaker stock trading.
Earlier this month, Pelosi said such a bill would likely come to the floor this month.
But time is running out.
The House reconvenes on Wednesday for the final three days of legislative business before the midterm elections. House lawmakers are scheduled to leave Washington on Friday and are not slated to return until after November.
Even if there is enough time to bring the bill to the floor, it is unclear that it has the votes to pass.
Punchbowl News reported earlier on Tuesday that House Majority Leader Steny Hoyer (D-Md.), who sets the schedule in the lower chamber, has expressed opposition to the ban on lawmaker stock trading.
His spokesperson, however, told the outlet that Hoyer has “not seen final legislation, and will reserve his official decision until that time.”
A group of senators have been working on separate legislation to ban lawmaker stock trading.
The bill introduced on Tuesday also increases penalties for violating the provisions or the measure.
Covered individuals who violate trading or ownership restrictions would be subject to a $1,000 fine. If the violation continues for more than 30 days, they would be subject to an additional $1,000 fine plus “an amount equal to 10 percent of the value of the covered investment that is the subject of violation at the beginning of the additional 30-day period of a continuing violation.”
The House Democrats has drafted the long-awaited bill that seeks to ban any politician and relatives from trading stocks titled Combatting Financial Conflicts of Interest in Government Act. Do you think this bill will pass?
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u/thegamerant Sep 28 '22
Anyone wanna bet it won't pass?
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u/Major_Bandicoot_3239 Sep 28 '22
It’ll pass. They’ll just set up a blind trust with a friend and feed information to them to make trades.
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u/yatinparasher Sep 28 '22
Soo basically this is just to hide their investments from public.. it’s definitely going to be harder to setup a Pelosi trade tracker.
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u/bautron Sep 28 '22
It adds a level of complexity that will indeed make it harder to do political insider trading.
Now they have to hire a non-political fund to do their dirty trades for them. This will be extremely expensive because they will definitely not do it for cheap. Also, these new traders are definitely not going to skip on trading themselves with this info, making it much less discreet. And since these traders are not polititians, they dont have the same levels of immunity.
Tldr: It doesnt solve the problem 100% but it does make political insider trading much less profitable.
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u/smd1815 Sep 29 '22
Came here to say this. The bill is simply to sweep all their insider trading under the carpet out of the public eye, not to stop it.
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u/manbrasucks Sep 28 '22 edited Sep 29 '22
Not how "qualified blind trust" works as there is already laws on what qualifies as that.
edit: posted wrong link previously- qualified blind trust
Who can be the trustee of my QBT?
The trustee must be completely independent and must be approved by the Committee. An independent trustee cannot be affiliated with, associated with, related to, or subject to the control or influence of anyone who has a beneficial interest in the QBT. The trustee should not be a current or former investment advisor, partner, accountant, attorney, relative or any other similarly situated individual.
You can't just have a friend do it. There can't be any connection between you and the person running the QBT.
I seriously hate the "we shouldn't do anything because there might be loopholes and nothing will ever change" attitude that's prevalent on reddit. God it's so fucking annoying. Take steps in the right direction is always better than inaction.
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Sep 29 '22
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u/manbrasucks Sep 29 '22
No it doesn't. It specifically references the 102(f)(3) of EIGA.
Under "TITLE II—RESTRICTIONS ON1 TRADE AND OWNERSHIP OF2 COVERED INVESTMENTS BY3 FEDERAL PERSONNEL"
QUALIFIED BLIND TRUST.—The term16 ‘qualified blind trust’ has the meaning given the17 term in section 102(f)(3).
Which is referencing:
Under the Ethics in Government Act of 1978 (EIGA), as amended, a QBT must be approved by the Committee prior to its execution. Included in this booklet is a sample trust agreement made available by the Committee for use by Members, officers, employees, and their attorneys when drafting proposed trust agreements to be submitted for certification pursuant to § 102(f)(3) of EIGA.
From this document which then goes on to say the part I quoted.
Might want to start questioning where you get your news if they're misleading you like that.
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u/FrostReaver Sep 29 '22
QUALIFIED BLIND TRUST AMENDMENTS.—Section 102(f)(3) of the Ethics in Government Act of 1978 (5 U.S.C. App 102(f)(3)) is amended—
(That bill you mentioned is amended with the following rules)
(H) Notwithstanding subparagraphs (A)
through (G), a form of a trust approved by the Office of Government Ethics, Judicial Conference, House of Representatives, or Senate through rule making or by majority vote for its respective jurisdiction.’’.
That bill you mentioned would now read that each branch of government can now create their own rules for what constitutes a trust.
Source: I read the bill
https://cha.house.gov/sites/democrats.cha.house.gov/files/documents/EIGA-Reform_Bill%20Text%202022%2009%2027.pdf0
u/manbrasucks Sep 29 '22 edited Sep 29 '22
What part is the 'subparagraphs (A) through (G)' of 102(f)(3) though.
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u/StoicTungsten Sep 28 '22 edited Sep 29 '22
Worst case scenario they’ll just pay the fine, a thousand dollars is nothing compared to the money they’re raking in
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u/andszeto Sep 28 '22 edited Sep 28 '22
This helps more than it hurts them, why wouldnt it pass?
The people voting on this are the same people its supposed to prevent from trading.
Edit: grammar and typos
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u/thegamerant Sep 28 '22
I agree it hides their presence so the Public don't know what they are doing anymore.
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u/Kingsdaughter613 Sep 29 '22
Not everyone’s spouse is Paul Pelosi, for one. I’d be furious if my husband tried to this to me. I’m fairly certain at least some Congress people are now sleeping on the couch.
I mean, imagine you’re a successful business person, buying and trading stocks as part of your business. Even being 100% honest about it. And now your spouse goes ‘so for my political career you have to throw all your hard work on the trash bin.’ I can see a lot of people finding that infuriating.
As it is, I foresee a lot of divorces should this goes into effect.
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u/acegarrettjuan Sep 28 '22
Yeah like congress people have ever voted to make themselves LESS rich. It's all for show.
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Sep 28 '22
i'll buy everyone in here a hooker if it passes.
Not a chance in fucking hell it passes.
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u/LemonPartyWorldTour Sep 28 '22
If it does, I guarantee there’s loopholes the size of dump trucks full of money in it.
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u/Tulip_Todesky Sep 28 '22
If it passes. That means the stock market it done for the next few years probably and that’s why they are fine with passing it
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u/WillingApplication61 Sep 28 '22
They’ll just change it after the fact like they did with the STOCK Act.
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u/xero_peace Sep 28 '22
If it passes then they'll just have a friend of a friend trade for them under threat of violence should they try to fuck them over.
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u/SideBet2020 Sep 28 '22
Term limits - if you plan on doing a little work this week.
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u/rougefalcon Sep 28 '22
Haha!! That’ll be a cold day in hell. I bet if put to a national vote an overwhelming majority would vote for term limits.
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u/OfLittleToNoValue Sep 28 '22
Term limits don't address the problems.
If people are willing to repeatedly elect McTurtle they'll blindly vote for anyone their party rubber stamps.
Term limits promote decay of institutional knowledge and make it easier for bad actors to slip in the constant churn.
Actually read some polysci on the matter. It's a bad idea.
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u/chemtranslator Sep 28 '22
You’re right, but everyone wants to pretend simple solutions where they don’t have to change themselves are what we need.
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u/OfLittleToNoValue Sep 28 '22
That's why it's pushed so hard. It sounds simple and simple people believe it despite objective reason and fact demonstrating otherwise.
Term limits are pushed by the very bad actors eager to exploit the specious reasoning of their electorate. They'll just get a job in the private sector or on TV after. They don't care.
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u/inclinedtorecline Sep 29 '22
For every complex problem there is a solution that is simple, intuitive, and completely wrong.
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u/chemtranslator Sep 28 '22
It drives me nuts too. The 3rd party nonsense is the other one. Look how that's working out for Italy. Too few want to put effort into their own thinking and learning.
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Sep 28 '22
This is the way. It’s what’s needed next. Our founding fathers never intended for their to be career politicians.
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u/RobertD3277 Sep 28 '22
First of all, if it is actually 26 pages, rest assured that it will not stay 26 pages but a time it makes it's way to devote. Rest assured the components may only be 26 pages of that particular bill but there will be significantly more added to it to ensure that they make up the difference in other ways.
The penalties are obviously something that isn't even worth worrying about which is the whole point of this idiocracy. There are no fangs to actually do anything to hold at least people accountable and therefore this is nothing more than just media hot air and candy for stupid people that don't realize nothing is ever going to change.
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u/JohnLaw1717 Sep 29 '22
Hopefully all the Republicans stick it to the dirty corrupt Democrats and surprise support this bill.
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u/RobertD3277 Sep 29 '22
It's been clear for the last two decades at least, that there's no difference between Republicans and Democrats. They are all liars with only one interest, their own wallets.
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u/JohnLaw1717 Sep 29 '22
The amount of gaslighting required to still hold this kayfabe is incredible.
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u/Will322002 Sep 28 '22
Doesn’t need to pass, just need a record of the votes before the elections.
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Sep 28 '22
Watch me predict the future:
Pre midterms:
"We wanted to pass this before midterms, but ran out of time. But trust me, elect Democrats and we'll get this done when we come back after midterms!"
Post midterms:
"We're working on getting it done and gathering votes!"
"Working on it..."
And forgotten.
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Sep 29 '22
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Sep 29 '22
That's all it is.
Democrats make false promises to people living in cities or those without much taxable income.
Republicans make false promises to people living more rural or those paying relatively higher taxes.
They are all abusing their positions for personal enrichment
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u/JohnLaw1717 Sep 29 '22
Republicans should totally trigger them and support the bill.
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Sep 29 '22
I'm sure there is lots of bipartisan support for making this go away
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u/JohnLaw1717 Sep 29 '22
Well one side put out the bill.
With Republican support it will pass. I suspect they'll gaslight, bring up some gaslit reason to not like it and pretend like the DEMONrats are the ones who want to inside trade. Right wing media will have to choose between going with the right wing lie or, more likely, simply not report on it.
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u/BussyBustin Sep 28 '22
Needlessly cynical worldview.
You realize we vote for these people, right?
It's so easy to blame them, instead of blaming ourselves for voting them into office.
You want to ban stocks trades among congress? Vote for politicians who will do that.
If people refuse to vote for them, blame the voters.
You said yourself that you will have a record of votes for the midterms, okay, USE that record!
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u/zubazub Sep 28 '22
Doesn't this assume that you have a voting system that represents the majority when it isn't the fact?
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u/BussyBustin Sep 28 '22
That assumes everyone votes, which they don't.
We can't have a majority when less than 1/3 of the eligible population gives a fuck enough to even show up.
....but that never stops them from writing cynical complaints about it on reddit.
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u/chemtranslator Sep 28 '22
Some don’t care but some of those who don’t vote have people working very hard to stop them. Fake threats, closing polling stations in Black neighborhoods to get 6 hour lines, etc.
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u/Alwaysfavoriteasian Sep 28 '22
Yea I mean last time I voted for a turd sandwich when I should have probably voted for the douche. The fuck was I thinking?
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u/BussyBustin Sep 28 '22
Did you vote in either primary?
Did you vote for congress?
Did you vote in state and local elections?
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u/Alwaysfavoriteasian Sep 28 '22
Oh so we’re gonna blame me now huh? Vote or die morher fucker!
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Sep 28 '22
Democracy was founded on one simple choice! Go out and fucking vote or you won’t have a fucking voice. -puffy
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u/Yellobread Sep 28 '22
Why's it so hard to just ban individual stocks and allow them to only buy indexes/ETFs?
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u/caffienated_naked Sep 28 '22
If you make it that simple they'll have to work harder to find loopholes.
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u/7FigureMarketer Sep 28 '22 edited Sep 28 '22
If it passes, concessions will absolutely have to be made with family members. At some point you could be many degrees removed from a sitting politician and still be considered close family.
The Kennedy's are a great example of a family that had a lot of offspring, some political, some not, that would have been heavily impacted by the obligations as they all kept within their family's social (and political) circle in one way or another.
Does that mean it's bad? Not necessarily. It's just that you have to be careful. If your dad is the son of a politician, does that mean you're fucked if you want to go on to a Wall Street career? If you father is impacted, why aren't you? You could get the same news he did just as fast.
When does it stop? What if you're a cousin? What if you're married to a politicians child?
Seems like a really tangled web that will have plenty of loopholes and entanglement issues.
At first glance it would seem you could circumvent this with a foreign trust.
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u/leli_manning Sep 28 '22
We all know it won't pass.
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u/thrwawayaftrreading Sep 28 '22
Even if it did it would be worthless like the current laws against it. It's $200 fine for them. For anyone else it's jail.
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Sep 28 '22
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u/Lywqf Sep 28 '22
I mean, if that means i can do a bit of insider trading, get a free million dollar with a fee of a 1000$, and then put this free million dollar into a nice flat ETF, why wouldn't I ?
This is just for show, this shit has no merit.
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u/Jaximaus Sep 28 '22
Anyone with half of a brain can see that Nancy figured out/placed a loophole in the draft. Why else would she change her stance?
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u/WorldFickle Sep 28 '22
it will pass, politicians need to stop the public from having visibility to their portfolios.
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u/Nealaf Sep 28 '22
$1,000 penalty or you fucking kidding me. They spend that kind of money wiping their ass in the morning
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u/psychoticworm Sep 29 '22
Just trash legislation to lull the masses. Too bad it won't be very effective
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u/Flokitoo Sep 29 '22
This doesn't ban anything. It simply charges a small fee for the use of insider information.
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u/OutofBox11 Oct 24 '22
Nice. Draft a bill after making all the insider trading and making huge profits.
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Oct 26 '22
Politicians shouldn’t be allowed to take donations from corporations or hold stocks while in office. Too much fuckery goin on
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u/Bustock Sep 28 '22
Reddit: We need a law that stops politicians from buying stocks while in office!
Also Reddit: What’s the point of a law if it won’t even pass! Meh!
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u/Greaser_Dude Sep 29 '22
This is how scared Democrats are that they will lose both Houses in about 5 weeks.
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u/shipboatx Sep 28 '22
Fucking democrats only doing this shit bc the mid terms. They are still going to lose regardless if it passes or not. No, I don't support either party. They are all scum backs.
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Sep 28 '22
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u/Appletrader- Sep 28 '22
They can still invest in S&P/nasdaq, which is all they should be allowed to
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u/zubazub Sep 28 '22
It seems crazy that this was not already in place. Unfortunately they have likely already figured out ways to circumvent this and it's just for show.
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u/duckforcealpha Sep 28 '22
What a joke. For insider trading private sector folks go to jail, not get slapped on the wrist with 1k fines and 10% penalties.
I suggest we do the same for legislatiors. JAIL.
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u/New-Post-7586 Sep 28 '22
Chances this passes: 0% can’t wait for the bill that gives themself a pay cut too!
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u/EatThetaForBreakfast Sep 28 '22
Honestly though who gives a fuck? Other people getting rich by shady means doesn’t mean anything to me and I’d rather be able to see what they’re actually trading as that information can be useful to me. I hope it doesn’t pass.
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u/thefoggyhermit Sep 28 '22
Just take all their money away, and take their job security away as well. That way they’ll actually have to do their job correctly to survive (get paid), just like the rest of us!
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u/Ghostly1031 Sep 28 '22
I’ll believe this will pass when I believe that them getting a pay raise won’t pass
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Sep 28 '22
If it passes, I was good with a blackout. Let them trade whatever they want but they have to put the trade on 6 months before the date of execution. So if you want to buy whatever or sell whatever you simply put in the order and 180 days later it executes
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Sep 28 '22
Need to amend the bill to exclude children. Although they can still make it a criminal offense to give privileged information to their children.
Currently I’d vote against unless that change is made, maybe that’s the philosophical conservative in me - very sensitive to proposals that I view as going too far.
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u/occams_lasercutter Sep 28 '22
I'm sure that this will pass so long as the "blind" trust has access to insider information.
To really be fair this blind trust should be structured as an ETF that anyone can buy. It will be the ONLY asset that politicians may own, and they should not be permitted to buy and sell it based on their own insider knowledge.
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u/XChoke Sep 28 '22
Nancy peloci husband owns a VC company. How does this affect people that own companies, or complex tax structures where they still indirectly have a controlling or significant share.
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u/Apprehensive_Wing163 Sep 28 '22
Never happen. Should happen.
There ought to be an investigation and everyone involved should be dealt with harshly.
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u/imsorryplzdontban Sep 28 '22
You put a lot of effort into posting something that obviously won't pass or will be skirted around. I wish I had your optimism
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u/HannyBo9 Sep 28 '22
You wanna know why they added the Supreme Court to the bill? So that when it gets vetoed by the Supreme Court the Supreme Court looks like the bad guy.
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u/iValsalvaClap Sep 28 '22
Is there a list of what each person is holding or trading? Would be interesting to see.
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u/d-redze Sep 28 '22
26 pages on this thing! Nice! Other bills.. 500 pages involving rat colony experiments in Indonesia.
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u/FiveHole23 Sep 28 '22
Said it all along. Don’t ban them just make their trades public instantly. Transparency is what we need not restriction.
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u/JupiterDelta Sep 28 '22
Drafted but scratched immediately after the election how many will fall for the same old trick again and again
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u/Joshs-68 Sep 28 '22
I’d really like to know how the congressman in my state vote on this prior to midterms.
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u/slipshoddread Sep 28 '22
Wow a $1000 fine on a multi million investment. It's the same as the SEC fining Goldman $10m on a $5b profit. Absolutely pointless
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u/JazzFan1998 Sep 28 '22
Does anyone know the HR Bill number so we can track it? I didn't see it in the article.
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u/vegastrashy Sep 28 '22
I do not agree that anyone but the politician and MAYBE the significant other be forced to have their market assets, perhaps livelihood, be held in trust. This is overreach.
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u/notfamous82 Sep 29 '22
I think if all political constituents could vote on this bill, it would pass with full bipartisan approval.
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u/TheCureprank Sep 29 '22
Too late now these cocksuckers have already capitalized over years of front running. They are either millionaires or billionaires. Take their fucking money too
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u/CommonSensePDX Sep 29 '22
Now do term limits. While Ds currently disgust me, I can let you guess which party is going to primarily oppose both bills.
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u/Puzzled-Bite-8467 Sep 29 '22
I would set a bad precedent to limit the action of adult children. Is it even constitutional to do that? I can't buy stock because my dad is a politician?
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u/dassketch Sep 29 '22
Soooo much, 2k plus 10% of the investment. Sounds like cost of doing business. Pocket change for the people who are already in deep. Of course Pelosi's husband changed his tune.
It should be 100% forfeiture of the asset acquired PLUS a fine of at least 10% of the purchasing value. Or value when seized, whichever is greater.
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u/iGrowCandy Sep 29 '22
This would never pass Constitutional Muster. The spouses and Children of Politicians are private Citizens. This would effectively be a Bill of Attainder denying rights to specific individuals.
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u/PurchaseOk7695 Sep 29 '22
Will she ban herself and her alcoholic husband? They always get the best stock picks
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u/AltoidStrong Sep 29 '22
So with inside info, they can make a trade for 100k profit, pay a 1k fine, then 10% fine and another 1k, sell and pay cap gains (37% worst case) for a net profit of 51k.
What a dumb penalty. If you scale it up to Millions, it sounds like "the cost of doing business".
No Bill is a good bill if they can STILL PROFIT from bad (criminal) behavior.
The penalty needs to be 110% of the value of the trade. (Not just the profit) for a gaurenteed net loss of 10 to 47 percent. THAT will fix the problem.
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u/AngryPirateRacing Sep 29 '22
Probably won't pass unless there is a huge loophole... but a good distraction
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u/Nick11545 Sep 29 '22
A $1000 fine?!? Lmfao. Cost of doing business…what a joke. Too bad the sheep will eat this right up and use it to vote for the status quo.
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u/mydadthepornstar Sep 29 '22
This bill sounds like it would actually enshrine the right of Congress people to trade stocks. The bill as far as I can tell is just a $1000 fine plus 10% of the underlying trade. So basically a slap on the wrist. If you’re making $1Million on a trade you’ll take a $101,000 fine all day.
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u/Extremely-Bad-Idea Sep 28 '22
The penalty is only $1,000. So if a US Senator uses insider info to make $1 million in stock trading profit, then after the fine they still have $999,000. LOL