Congress Passes Bill to Deal with Insider Trading in Congress.Posted: April 14, 2012
For those that do not understand what insider trading is, it is how people with knowledge not available to the public use that knowledge to make a profit in the stock market. For example, say you are an attorney and you become aware that your client is going to file for bankruptcy so you go out and tell your girlfriend about it so she can sell her shares and avoid loss. Your girlfriend is trading on information that is NOT available to the public in order to avoid a loss. If she sold shares short, she would make a profit even.
This is not permitted under insider trading rules. If you have priviledged information, you can’t use it to profit or avoid loss. Until this legislation, Congress men and women could do so…..unlike the rest of America