Elected insiders: Ex-lobbyist accuses Congress of being rife with insider trading

AP File PhotoFormer lobbyist Jack Abramoff alleges that Congress members gain thousands of dollars from insider stock trading.

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.

 

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