Should Members of Congress Trade Stocks? Advisor says no
CHICAGO (Nation Now) – The Federal Reserve last week banned its policymakers and senior executives from investing in individual stocks and bonds. They should also provide 45 days’ notice of any transaction and receive prior approval from ethics officials.
Could the same ban happen to Congress? Tracy Byrnes, financial advisor at UBS, thinks so.
“Anyone who has access to more information than you and I shouldn’t be allowed to do so,” Byrnes said in “The Donlon Report” Tuesday. She added, “If you have access to people, information, anything other than what we all have, it should be off the market. “
Numerous media have reported that several members of Congress have violated or violated the Stop Trading on Congressional Knowledge Act, or the STOCK Act. The law, which was passed in 2012, prohibits members from using inside knowledge to transact and requires them to disclose, within 30 to 45 days, any trade in a stock, bond or other security. greater than $ 1,000.
Byrnes says the STOCK law should be taken seriously by lawmakers because many Americans must follow these rules.
“When I was with Ernst and Young, we had very strict policies. If we audited the client, we wouldn’t be able to own the shares. When I was a reporter and we were sitting in newsrooms, we couldn’t own stocks because we had people on the phone.
Byrnes also added that these lawmakers have access to information before the general public, which means they might have the opportunity to attend internal training. She said this is the kind of situation that creates trust issues for Americans.
“There are so many people sitting on the sidelines after the financial crisis, you know, the people who have burned themselves over the years are sitting on their money, and they are missing this market run,” she said. . “We’ve been hearing for years that Wall Street is dishonest and that you can’t compete with them while I can’t compete with Washington either. “
Earlier last year, several US senators sold shares after sensitive briefings on the dangers of a new coronavirus that is just starting to roll out of China. Republican Senator Richard Burr, for example, unloaded $ 1.7 million in inventory about a week before the market collapsed due to COVID-19 closures. Burr is one of four Senators to sell shares after the briefing, including Democrat Dianne Feinstein and Republicans Kelly Leoffler and Jim Inhofe.
Brynes also said that lawmakers owning their stocks prevents the average American from benefiting from the stock market.
“So if all these people are making money, and the really hard working little guy who just wants to put some money in a retirement account and save for a rainy day, if he thinks that ‘ is rigged, they are not. will invest. And that’s not good for any of us at the end of the day.
Byrnes believes lawmakers should be held accountable. She said enforcement of the STOCK law would help reduce the trust deficit between Washington, DC and the rest of the country.
“I think someone should come out, though, and get their feet wet eventually,” she said. “They’re going to have to sort out the capital gains issues with all of these executives because they’re probably going to be sitting on earnings that won’t pay taxes.” She added that there will definitely have to be ways around this, but they really need to stop it, “because it only gets worse and more and more insulting to the rest of us.”