William D. Warren Professor of Law at the University of California, Los Angeles (UCLA) School of Law
Position:
Con to the question "Should insider trading by Congress be allowed?"
Reasoning:
"A few thoughts:
1. Stock trading by Congressmen and their staffs presents a double-edged conflict of interest. They may vote on the basis of their trading plans or trade on the basis of their voting plans...
2. Congress has lots of access to confidential information, but one key source is its power to investigate. Do we want Congress 'investigating' companies so that members or staffers can get stock tips?
3. Congressional insider trading is a real problem...[A] study of trading by US Senators found that they were earning rates of returns from stock trading that would make Warren Buffet proud. The study's authors found that 'the senators also appeared to know exactly when to buy or sell their holdings. Senators would buy stocks just before the shares suddenly would outperform the market by more than 25%.' As every investor knows, you can't do that sort of thing routinely without having access to nonpublic information...
Congress often exempts itself from the laws that apply to everybody else. In most cases, we might infer that it is the laws in question that are a bad idea. In this case, however, it is the Congressional exemption that is the bad idea. This gaping conflict of interest needs to be staunched."
Stephen M. Bainbridge, "Insiders on the Hill," TCSDaily.com (Technology Commerce Society Daily), Mar. 30, 2006
Experts
Individuals with JDs, PhDs, other relevant advanced degrees, and government officials with significant involvement in, or related to, insider trading issues. [Note: Experts definition varies by site]
Involvement and Affiliations:
William D. Warren Professor of Law, UCLA School of Law, 1996-present
