Having researched the impact of congressional trading upon business, government, and society over the past few weeks, I have chosen to highlight the business change.org’s support of the STOCK Act. Change.org is “the world’s largest petition platform, empowering people everywhere to create the change they want to see” with roughly 20 million users!
On the peitition posted in support of the STOCK Act, individual investor Rich Smith of Alexandria, VA makes the following case to Congress:
The U.S. Senate
The U.S. House of Representatives
As an individual investor, and a member of The Motley Fool, I am writing to register my support for H.R. 1148, the “Stop Trading on Congressional Knowledge Act” (STOCK Act.)
For years, academic and journalistic analyses have described the significant outperformance of members of the House and Senate, including their staffers and family members, when investing in the stock market. In some cases, members of Congress have been clocked at 12% annual outperformance of the S&P 500. (Warren Buffett, during his tenure as head of Berkshire Hathaway, only managed 10.8%.)
Such investing success seems extreme. It raises suspicions that our legislators, elected to do the People’s business, are in fact trading on their non-public knowledge of laws in progress and planned. This gives them the ability to achieve investing returns beyond those ordinarily achievable by the lay investor. While such action does not currently violate any laws, it should.
Pass the STOCK Act now, and it will.
I find the support presented by Mr. Smith in the online petition format to be highly innovative and strategic when it comes to gaining the momentum of a large audience. Supporters of Mr. Smith, and passage of the STOCK Act are able to comment on the bottom of his post and share their support or disagreement with Mr. Smith’s belief.
This example from change.org is an additional source I can use in my White Paper and one that is interactive as well as technologically interactive in its format. With such strong support on the part of indivivduals such as Rich Smith, I am not surprised that the STOCK Act passed. The question reamins whether the law has done enough, not enough or too much in the way it approaches the issue of congressional insider trading.