US Congressmen beat the stock market through insider trading
Over the years, academic studies have found that members of the House of Representatives beat the stock market by as much as six percent per year and members of the Senate do even better than that.
Legal analysts say that Wall Street insider trading laws do not apply to Congress. Powerful members of Congress come into contact daily with market-moving tidbits. That gap between the law and the reality has made Capitol Hill a virtual free-fire zone for insider trading.
Disgraced Washington lobbyist Jack Abramoff says that the most valuable type of information for Congressional insider trading is held by congressional investigators who pry deeply into corporate goings on. A particularly easy target is advance knowledge of the announcement of an investigative hearing into a company.
“Hearings under almost every circumstance are going to have a bad impact on a company,” Abramoff said. “And so some staffers I’ve seen in the past talking about the fact that, ‘Oh, I’m gonna go out and short that company.'”
[Excerpt of CNBC article by Eamon Javers]