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.

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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