Martha Stewart went to jail for insider trading, so should Congressmen who bought/sold bank stocks as banks tanked.
Members of U.S. House Financial Services Committee snapped up or dumped bank stocks as bottom fell out of market
Posted by Stephen Koff and Sabrina Eaton/Plain Dealer Reporters June 25, 2009 22:29PM
• Members of Congress were chasing profits while making policy
WASHINGTON — As financial markets tumbled and the government worked to stave off panic by pumping billions of dollars into banks last fall, several members of Congress who oversee the banking industry were grabbing up or dumping bank stocks.Anticipating bargains or profits or just trying to unload before the bottom fell out, these members of the House Financial Services Committee or brokers on their behalf were buying and selling stocks including Bank of America and Citigroup — some of the very corporations their committee would later rap for greed, a Plain Dealer examination of congressional stock market transactions shows.
Financial disclosure records show that some of these Financial Services Committee members, including Ohio Rep. Charlie Wilson, made bank stock trades on the same day the banks were getting a government bailout from a program Congress approved. The transactions may not have been illegal or against congressional rules, but securities attorneys and congressional watchdog groups say they raise flags about the appearance of conflicts of interest.
“I don’t think that any of these people should be owning these types of financial instruments,” said Brian Biggins, a Cleveland securities lawyer and former stock brokerage manager. “I’m not saying they shouldn’t be in the stock market. But if they’re on the banking committee and trading in these kinds of stocks, I don’t think that’s right.”
For example, Rep. Ginny Brown-Waite, a Florida Republican, bought Citigroup stock valued between $1,001 and $15,000 on Oct. 2, the day before the House passed the financial rescue bill and President George W. Bush signed it into law, records show. She opposed the bill.
Eleven days later, she bought $1,001 to $15,000 worth of Bank of America stock. It was on the same day that then-Treasury Secretary Henry Paulson told leading banks that he expected them to accept billions in bailout money to prevent a financial meltdown.
Stewart also will forgo five months of her $900,000-a-year in base pay from her company internet, Martha Stewart Living Omnimedia Inc., while she is in prison.
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