C'mon, we all know the answer to this question. It does seem kind of mysterious that all of sudden this past week, the Senate finally passed a bill by an overwhelming 96-3 vote to ban members of Congress from benefiting for insider trading. "We sent a strong message by strengthening our laws that public office is not for private gain," said Sen. Susan Collins, R-Maine. "The Senate came together in an overwhelming bipartisan fashion to correct the perception that insider trading is somehow going on in Washington, D.C. Whether or not members are engaging in insider trading, it is important that we respond to the perception that some members may be using their official position for private gain." (source: www.abcnews.go.com)
Perception . . . Senator Collins? My dear, haven't you heard in the 21st century that perception is reality and the reality is that these types of shenanigans has been going on far too long. Who really knows who did what, but in the recent months we saw many politicians who have been accused of buying stocks in industries or specific companies just before legislation that they may have written went to vote. How fair is that?
Then again, how many people know that the only people who can own a law firm are lawyers? Yes, that is right . . . if you aren't a JD, you can't own, revenue split, or any of the like when it comes to the law firms. Give it up to the legal professionals to be the only businesses where an outsider can't get a piece of the action. But then again they wrote the laws so why not be the only profession where only your kind can be an owner. Pretty cool if you have that kind of power.
In our industry of financial services, here is how it works. You get caught doing insider trading, you are FIRED! Plain and simple just like that. You want to pass a tough bill Congress? Take every single person in the executive branch of legislation or any elected official getting paid for public service and catch them doing this . . . FIRE them, FINE them, and potentially IMPRISON them. Hey kids, that is how it works in the real world . . . just ask Bud Fox and Gordon Gecco.
It won't really matter if the House Of Representatives passes this piece of legislation or not. A 96-3 vote tells me this is more about approval rating than doing the right thing. It's been going on for years, but recent television news pieces on 60 minutes and the like have really raised this issue to the surface. If we want to play some CSI and go for uncovering the truth, then let's start whipping through the tax returns and match the stock picking against the legislation those politicians passed around the time the stocks were bought. Nobody on Capitol Hill is going to admit to insider trading, but it's time to get our public representatives in the job of acting like their doing the best thing for the public!
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder of oXYGen Financial, Inc
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