WHAT: Notorious former lobbyist Jack Abramoff, who served three years in federal prison and now labels himself a whistle-blowing reformer, alleged “it is pretty widely known” that Congress members a routinely gain thousands of dollars from insider stock trading.
HOW: Among the most valuable types of information for Congressional insider trading is advance knowledge of announcements for investigative hearings on a company. Hearings usually drive down a company’s stock price, which opens short-selling opportunities.
WHY IT’S OUTRAGEOUS: Congress members and their top staffers come into daily contact with market-moving tips. For years, academic studies showed that members of the House of Representatives beat the market by as much as 6 percent per year, and senators do even better.