Saturday, June 27, 2009

Congress' Iffy Insider Trading

Members of the House Financial Services Committee were wheeling and dealing in the stocks of banks they were about to bail out last fall, a revelation that may test Congress' rock-bottom approval ratings.

Both Democrats and Republicans were scurrying to profit from cashing in or out, according to enterprising reporters from the Cleveland Plain Dealer, who mined disclosure forms for the fourth quarter of 2008:

"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."

Compounding the news of such avarice is the suggestion that some were inept at it.

Rep. Ginny Brown-Waite, a Florida Republican, bought Citigroup stock the day before the House passed the rescue bill and President Bush signed it into law. She voted against it. The stock, which closed at $22.50 a share the day she acquired it, is now worth $3.

The Plain Dealer reports that "members of the Financial Services Committee were privy to closed-door discussions, staff briefings and political horse-trading decisions between political parties, Congress and the White House. Banks lobbied Congress and the administration heavily."

At least one of them missed the point.

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