Research released today by the investment advisors at The Motley Fool shows that in the weeks prior to the signing of TARP in early October 2008, members of Congress made a total of 318 trades in financial companies, compared to 115 trades made in the same period of 2007.
The research is being released as Congress wrestles with the STOCK Act, a bill introduced by Minnesota Democrat Tim Walz that would ban insider trading by members of Congress.
In dollars terms, Motley Fool found that pre-TARP congressional trading amounted to $6.7 million worth of financial-company shares, compared to $1.7 million in the same period the previous year.
Motley Fool notes that the influx in congressional trading came at “a time when the fate of many financial companies rested in Washington lawmakers' hands.”
Critics say insider trading is already illegal. But Walz wants to tie the restrictions more specifically to non-public information politicians glean by virtue of their positions.
The firm suggests that, among other things, members report their transactions in publicly traded securities within 48 hours, a requirement some members consider burdensome.
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