A storm of complaints has arisen about insider trading by members of Congress, and legislation is gathering momentum on Capitol Hill to curb such abuse. But it turns out that members of Congress don’t have much of a green thumb when it comes to growing their investments – with or without insider trading.
Working off financial disclosure forms,
The Wall Street Journal found that more than 50 members of Congress traded actively in financial markets or reported very big transactions last year. Few of the lawmakers made much money, and many suffered losses.
The poor trading results came on both sides of the aisle.
Sen. Tom Coburn, R.-Okla., made more than 200 stock and bond trades last year and says he has lost money trading in each of the seven years he has spent in Congress.
Rep. Luis Gutierrez, D-Ill., made dozens of trades in stocks and mutual funds. Two of the fund trades represented a purchase and a sale of a fund on the same day – not too smart a move given that fund prices don’t change during a day.
"If the congressman ever writes a book, it will not be about how to get rich playing the market from your laptop," Douglas Rivlin, a spokesman for Gutierrez, told the Journal.
The paper says its research shows that “in many cases, members of Congress make common investment mistakes despite their seeming advantage of possessing information not readily available to other investors.”
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