The STOCK Act mostly only had the effect of creating some inconveniences for lawmakers (e.g., their families could still trade based on their guidance), and even that was only the case for a year as Senator Reid's House bill S.716 effectively gutted the STOCK Act and restored the status quo, was passed by unanimous consent after 14 seconds of discussion, and was signed into law by President Obama:
As far as I can tell, most of the politicians aren't doing insider trading. They are trading on public knowledge (laws being introduced) but that people don't really pay attention to. Maybe I am wrong?
Insider trading laws are formulated around prosecuting persons that have a contractual duty to the company that act on company-internal information before its published to stockholders. Politicians do have unpublished information about laws and regulations that will affect companies in the future, but they don't have any specific duty to the company, and the information is not exactly company-internal, so it doesn't count as insider trading by technical definition.
I've ever seen a proposed reformulation of these laws that would redraw the lines clearly enough to prevent abuse by politicians but not impede legitimate cases. Maybe the best solution is to ban politicians from trading individual stocks, only broad market indexes / mutual funds.
> Maybe the best solution is to ban politicians from trading individual stocks, only broad market indexes / mutual funds.
I think that still has issues. Requiring blind trusts seems safer.
There is another problem, which is family members. If you ban the politician, but allow their spouse, kids, etc to trade freely then you didn't actual solve any problems.
Certainly I haven't heard of any news of the STOCK act from 2012 actually being enforced, e.g. no insider trading convictions or anything.