Hey, Can We All Agree On This?

[Bosun]

In Congress no trade… maybe a retirement general fund of some kind like preselected funds like govt TSP . Very generic and no back scratching

[Tguns]

I have absolute faith in the idea that congress can produce legislation that effectively bans members from making gobs of cash off of trading while in office.

Yeah, it was fun typing that out.

[wonderingrover]

There are certainly other occupations with restrictions on stock trading. When I was doing public accounting, I had to disclose every single company in which I held stock to my employer. Firm policy required that I could not have a client with whom I had any kind of financial interest. For example, I once had to turn down an audit assignment at IBM because I still owned stock from when I had worked there years prior. You can’t have someone audit a company who has stock in the company due to conflict of interest.

I absolutely think the same principle should apply to Congress.

[Samm]

@Safiel

@W_and_C

what about IRA accounts ?

IRA’s and such can be moved to blind trusts.

That should not be necessary. Stock portfolios in IRAs are generally handled by money managers. The client establishes their risk tolerance and the money manager buys and sells stocks (and other investments) in accordance with that input. The client (in this case a Congressman) need not have any knowledge of the specific stocks in their portfolio.

But it would be a serious limitation if the Congressmen were not permitted to have any interaction with the manager of the IRA.

[FloridaYankee]

@Publius

Would not a detailed required disclosure address the issue? That’s what’s required in the executive branch for individual stock holdings (Form OGE-450).

They already have disclosure rules. They mostly ignore them or file them like six months late, and the penalty is much smaller than any profits they could make.

[mwevans1234]

@Eagle-Keeper

They should not be allowed to purchase stocks for individual companies. They can invest in funds like SPY, QQQ, IWM.

Not QQQ though. Too focused on a single industry, which is certainly a potential conflict of interest.

[mwevans1234]

@wonderingrover

There are certainly other occupations with restrictions on stock trading. When I was doing public accounting, I had to disclose every single company in which I held stock to my employer. Firm policy required that I could not have a client with whom I had any kind of financial interest. For example, I once had to turn down an audit assignment at IBM because I still owned stock from when I had worked there years prior. You can’t have someone audit a company who has stock in the company due to conflict of interest.

I absolutely think the same principle should apply to Congress.

That was indeed really annoying. If I remember, being on the advisory side of the same firm as you, there was also something where if we had an advisory relationship with a client where the partner in charge was from my home office, I also couldn’t own stock in the company.

Did you also love IBM’s other impact on the firm, which was that we all had to use Lotus Notes well into the 2010s to keep IBM happy?

[mwevans1234]

@W_and_C

I want to at least give them liberty to invest where they want to in a Roth. You’re already capped at 6k per year.

Eh, Roth income limit is only $40k more per year than Congress salaries. The majority won’t be contributing, I wouldn’t think.

[wonderingrover]

@mwevans1234

@wonderingrover

There are certainly other occupations with restrictions on stock trading. When I was doing public accounting, I had to disclose every single company in which I held stock to my employer. Firm policy required that I could not have a client with whom I had any kind of financial interest. For example, I once had to turn down an audit assignment at IBM because I still owned stock from when I had worked there years prior. You can’t have someone audit a company who has stock in the company due to conflict of interest.

I absolutely think the same principle should apply to Congress.

That was indeed really annoying. If I remember, being on the advisory side of the same firm as you, there was also something where if we had an advisory relationship with a client where the partner in charge was from my home office, I also couldn’t own stock in the company.

Did you also love IBM’s other impact on the firm, which was that we all had to use Lotus Notes well into the 2010s to keep IBM happy?

Oh yes - I found Lotus Notes cumbersome and annoying. Also, I recall back when I was actually at IBM, they were still using OS/2 as their operating system. I found that one clunky as well.

[zantax]

I am ok with this, however, how long until they want someone to sell their business as well? What about real estate holdings?

[Guvnah]

@W_and_C

I want to at least give them liberty to invest where they want to in a Roth. You’re already capped at 6k per year.

The 6K/year limit doesn’t necessarily stop someone from gaining a huge benefit from insider info. (And it doesn’t matter if it’s a Roth or traditional or 401K.) A guy could have grown his Roth to a million bucks before he ever got elected to Congress. It’s not the $6000 contribution limit that matters. He could leverage that million on the insider info.

[Guvnah]

@Samm

That should not be necessary. Stock portfolios in IRAs are generally handled by money managers. The client establishes their risk tolerance and the money manager buys and sells stocks (and other investments) in accordance with that input. The client (in this case a Congressman) need not have any knowledge of the specific stocks in their portfolio.

My 401K is with Fidelity, and one of my investment options is called BrokerageLink. Half of the 401K is in various Fidelity funds, and half I have put in BrokerageLink. I can buy and sell just about any security I want: Individual stocks. Funds. Even warrants (but no options.) I could even move 100% of my 401k to BrokerageLink if I wanted. If I were elected to Congress, I could leverage that part of my retirement account specifically on securities that will benefit what we were doing in Congress.

But even if the congress critter were limited only to a list of funds in the 401k/IRA, he could know that congressional action would impact a sector, and therefore move funds into (or out of) the international fund, or high-tech fund, etc.