Let Congress trade!

Cite this Article
Larry Ribstein, Let Congress trade!, Truth on the Market (December 02, 2011), https://truthonthemarket.com/2011/12/02/let-congress-trade/

I have previously discussed here and here the policy arguments against a broad ban on Congressional insider trading (this is apart from Steve Bainbridge’s serious problems with the proposed legislation).  

Now Todd Henderson and I have weighed in on Politico with more on why we should let Congress trade (while imposing strong disclosure duties).  It’s obviously not a popular position these OWS and politician-bashing days. But we think it’s a sensible one that deserves serious consideration.

Update:  Bainbridge responds.  He focuses on the perverse incentive problem, which Todd and I acknowledge.  Unfortunately, he ignores our argument for disclosure as a way of dealing with that issue, and the serious problems of having the SEC enforce a Congressional insider trading ban.  Consideration of these issues caused me to change my views on banning Congressional insider trading.  I think it’s inconsistent to focus on enforcement problems in banning private activity (as both Bainbridge and I do) and not do so in banning public conduct, where enforcement is even trickier.