About STOCK edit
The real world effectiveness of the STOCK Act at curbing insider trading is up for debate. Insider trading laws which already existed to stop such practices lack specific definitions making them difficult to enforce, the STOCK Act attempts to rectify this but critics argue it does not do enough.[1] The enforcement of the STOCK Act is left up to the executive branch which may be reluctant to pursue cases against the legislature because of concerns regarding the separation of powers and the inherent imbalance this may present if executive were to abuse the law.[2] This can lead to a situation where the most egregious cases are pursued while milder cases which may be difficult to define are not pursued. A recent study did not find a difference between the expected returns of public equities owned by public officials tracked between 2012 and 2020 when compared to randomly choosing stocks.[3] Suggesting that public officials either did not engage in insider trading or if they did, it did not result in better returns than if they had chosen stocks randomly.
Reception edit
As a result of the economic disruption caused by the COVID-19 Pandemic, there are new calls to expand or reform the STOCK Act. [4] There have been several reports by various prominent news agencies of alleged violations of the STOCK act by members of Congress.[5] The list of alleged violations include members from both parties.[5] A majority of respondents supported a ban for members of Congress to hold individual stocks as shown in a recent poll conducted in March of 2020.[6] Support for the ban appears to be bipartisan and ideologically agnostic as the demographic representation of the poll results present.[6]
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References edit
- ^ Schroeder, Jeanne L. (2014). "Taking Stock: Insider and Outsider Trading by Congress". William and Mary Business Law Review. 5: 159.
- ^ Fodor, Anna (2013–2014). "Congressional Arbitrage at the Executive's Expense: The Speech or Debate Clause and the Unenforceable Stock Act". Northwestern University Law Review. 108: 607.
{{cite journal}}: CS1 maint: date format (link) - ^ Belmont, William; Sacerdote, Bruce; Sehgal, Ranjan; Van Hoek, Ian (2022-03-01). "Do senators and house members beat the stock market? Evidence from the STOCK Act". Journal of Public Economics. 207: 104602. doi:10.1016/j.jpubeco.2022.104602. ISSN 0047-2727.
- ^ Gellasch, Tyler. "Opinion | I Helped Write the STOCK Act. It Didn't Go Far Enough". POLITICO. Retrieved 2022-05-20.
- ^ a b Levinthal, Dave. "60 members of Congress have violated a law designed to stop insider trading and prevent conflicts-of-interest". Business Insider. Retrieved 2022-05-20.
- ^ a b "The Public Thinks Members of Congress Shouldn't Be Able to Own Individual Stocks". Data For Progress. Retrieved 2022-05-20.