Representative Spencer Bachus, R-Ala., the head of the Financial Services Committee in the House of Representatives, is under investigation for allegations of insider trading. His position as the head of the Financial Services Committee puts him in a place where he receives information about the markets before they are publicly available
“I welcome the opportunity to set the record straight,” Bachus recently said to the Washington Post. “I respect the congressional ethics process. I have fully abided by the rules governing members of Congress and look forward to the full exoneration this process will provide.”
These accusations come after close examination of the Representatives trading records showing many quick-profit yielding trades since 2007 when he became head of this committee.
In one instance, Bachus made $15,000 profit in a trade which he held for only two weeks, a significantly short period of time for the average trader. He also conducted many trades where he bought and sold on the same day, betting on the quick ups-and-downs of companies, and most of the time he was right.
Congress recently passed legislation that specifically forbids members from conducting trades based on information that may have received working in Washington. The move toward these regulations came after an episode of “60 Minutes” last November where several Representatives and Senators were accused of insider trading, Bachus being one of politicians highlighted.
Bachus is currently under investigation by the Office of Congressional Ethics, an independent regulatory commission. The ethics committee will determine over the course of their investigation weather or not insider trading was conducted.
It seems pretty obvious that some form of insider trading was going on. It wasn’t until just a few weeks ago that insider trading was banned in Congress, so it would only stand to reason that a least someone was taking advantage of it all this time. Not to mention the fact that Rep. Bachus was one of the politicians specifically mentioned on the episode of “60 Minutes.”
One of the pieces of evidence “60 Minutes” noted was that Rep. Bachus was involved in a meeting in 2008 with U.S. financial officials where he was told about the impending financial collapse. Using this information he bought stock options and made a profit from everyone else’s losses.
It is despicable to feel that because you are in a position of power where information comes to that you can use it to take advantage of other people. This holds especially true if you are a Congressperson serving as the head of the Financial Services Committee. That is flat out 100% insider trading, and oh yea, people go to jail for that.