Donald Langevoort, JD Biography

"The idea that Members of Congress or their staffs can freely step ahead of ordinary investors to profit from information acquired as a result of their legislative roles is disturbing, to say the least. While current insider trading law is more potent with regard to such activity than some of the public commentary on this issue suggests, Congress should act to eliminate any doubt and state clearly that both the trading and tipping prohibitions apply to Members and staff. It would be extremely unfortunate were the SEC or prosecutors to bring an action and have the Member or staff person raise the defense, which they surely would, that service in Congress carries with it no fiduciary-like duty to respect governmental confidences. That would be the last headline Congress should want to see.

The SEC deserves resolution of this as well. An insider trading case against a Member (or even a powerful staff person) will always be a matter of great political sensitivity, likely to be brought only to the extent that the case—legally and factually—is very strong. The external pressures to bring such cases, or not bring them, will inevitably be great when any suspicions arise. Leaving any ambiguity as to the question of whether, and to what extent, the insider trading on Capitol Hill is unlawful is hardly an encouragement to those matters that deserve to be courageously investigated and pursued. Conversely, an explicit statement by Congress that its Members and staff are subject to a duty of trust and confidence would make plain, to the SEC and the American public, that Congress expects no special privilege or treatment with respect to the rules of fair play in the U.S. capital markets.”