A Few Facts for the Occupy Wall Street Idiots
You’re protesting the wrong “Robber Barons”
As usual the liberal progressive socialist Marxist’s have got it wrong. They are currently ranting and raving about bankers, investors, corporate CEO’s, etc., who based on their performance and guidance, reap the rewards of their fiscal acumen. Most of these perceived “Robber Barons” are paid on the profitability of said corporations they run. They in essence get paid on the value of their work not the volume or lack there of like most of the unions thugs and Democratic politicians and communist idealists like the Hollywood crowd that now join their ranks.
The problem with the government educated useless idiots that “Occupy Wall Street” cannot be summed up in a few words, because they themselves, as all “useless idiots” are, are a mob with a mob mentality not a singular view point. Their anti-American progressive socialist behavior is too deeply rooted. It has been hammered into them by a corrupted education system that since the formation of the Dept. of Education by the Socialist Ruling Class Elites has focused entirely on indoctrinating this Nations youth into their dogma. They have spent the last 144 years creating it.
They have also created the greatest system of corrupted crony capitalism that has been intentionally ignored by the main sewer media and have profited by it, unfettered by legal restraint or legislative restrictions for BILLIONS of dollars. Yes that is correct there is no legal restraints on any member of congress or their staff or the White House and its staff from trading on information on pending legislation!
The following is a report by Securities Docket originally published by Compliance Week.
March 11, 2009, 7:09 am
In the days leading up to Nov. 16, 2005, the stock prices and trading volumes of several companies with asbestos-related liabilities including USG Corp., W.R. Grace & Co., and Crown Holdings, began to spike up in an otherwise flat market. No publicly available news about these companies or the industry explained the increases in price and volume.
What the public did not yet know—but what was known to certain investors with political connections—was that on Nov. 16, Senate Majority Leader Bill Frist would deliver a speech announcing new legislation to relieve companies such as USG Corp. and others of their liabilities in asbestos-related lawsuits.
The asbestos legislation is an example of the effect that Congressional action can sometimes have on a stock’s price, and also of the potential for insider trading based on that knowledge of non-public information. Notably, and to the surprise of most people, no laws or regulations prohibit members of Congress (or their friends, staff, neighbors, or other acquaintances) from trading freely on such material, non-public information about a public company.
Indeed, members of Congress and their staff currently do not owe any “duty of confidentiality” to Congress and can’t be held liable for insider trading based on congressional knowledge under the current laws. Nor is there anything at this time that would prohibit Congressional staffers and executive branch employees from sharing inside information obtained from Congress with their friends—potentially allowing the recipients of such information to use it to make huge trading profits or prevent big losses. That means trading on inside knowledge of upcoming Congressional action is today one of the few forms of legal, repeatable insider trading (see my December 2008 column for a list of the others).
An academic study released in 2004, as well as some other more recent developments, indicates that this Congressional loophole to the insider trading laws isn’t just theoretical. Georgia State University professor Alan Ziobrowski released a study showing that during the 1990s, senators’ stock picks (which must be publicly disclosed periodically) beat the market by 12 percentage points a year on average. By comparison, corporate insiders only beat the market by about 6 percentage points a year, and U.S. households underperformed the market by 1.4 percentage points.
Ziobrowski and his colleagues concluded their findings “suggest that senators are trading stock based on information that is unavailable to the public, thereby using their unique position to increase their personal wealth …” Ziobrowski later was quoted as stating that, in his opinion, “there is cheating going on.”
There were also published reports in the wake of the study that the Securities and Exchange Commission had reviewed the findings, but decided not to pursue the issue because such cases would be difficult to prove. Critics, however, observed that a more cynical explanation for the SEC’s decision to do nothing might lie in the fact that the U.S. Senate is responsible for approving SEC commissioners and the agency’s budget.
In September 2008, U.S. Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee, drew criticism for his trading of short-term put and call options in 2007, including a single transaction on Dec. 10 that netted him $15,000. He’d held that particular investment for just two weeks, and sold it on the same day that the company’s stock price surged following its announcement that it would acquire a competitor. Bachus’ trading in 2007 reportedly allowed him to supplement his $165,200 annual congressional salary by $160,000 that year.
There’s more: Tony Rudy, a staffer for former House Minority Leader Tom DeLay, was suspected of consistently trading based on material, non-public legislative information. While a DeLay staffer, Rudy reportedly traded hundreds of thousands of shares of stock from his work computer in 1999 and 2000.
Failure and Reform
It’s hard to come up with any compelling reason why trading based on Congressional knowledge should remain legal, and quite easy to build the case against it. Still, despite a situation that cries out for legislation to end this loophole, recent efforts to pass a bill that would do just that have gone nowhere. In January, U.S. Reps. Louise Slaughter and Brian Baird introduced—for the third time—legislation intended to stop insider trading on Capitol Hill called the “Stop Trading on Congressional Knowledge Act” (the STOCK Act). Slaughter and Baird also introduced similar bills in 2006 and 2007, without success.
Slaughter and Baird have persisted, however, and Baird recently stated that he considers the legislation to be more important than ever as the government prepares to direct billions of dollars into the economy through the Troubled Asset Relief Program. The STOCK Act of 2009 (H.R. 682) would, among other things, amend Section 10 of the Securities Exchange Act and Section 4(c) of the Commodities Exchange Act to:
- prohibit members of Congress, employees of Congress, or executive branch employees from buying or selling stocks, bonds, or commodities futures based on non-public information they obtain because of their status;
- prohibit those outside Congress from buying or selling stocks, bonds, or commodities futures based on non-public information obtained from within Congress or the executive branch;
- prohibit Congressmen and employees from disclosing any non-public information about any pending or prospective legislative action obtained from a member or employee of Congress for investment purposes; and
- require members of Congress and employees to report the purchase, sale, or exchange of any stock, bond, or commodities future transaction in excess of $1,000 within 90 days.
It would also require firms that sell “political intelligence” and obtain their information directly from Congress to register with the House and Senate, and to make disclosures much like lobbying firms are now required to do.
There are arguments against the STOCK Act, but none strike me as particularly strong. One is that the law is unnecessary because congressmen already have a duty preventing them from trading on inside information that derives from some combination of common law relationships, agreements to maintain information in confidence, and a history of sharing confidences. But it’s difficult to see this ill-defined and never-before applied “duty” serving as the basis of a future insider trading case against a congressman.
Another practical limit on Congressional insider trading may lie in the concept of “democratically accountability”—that Congressmen must publicly disclose their trading activity, and their constituents will take note and vote them out of office if they appear to be engaging in insider trading. This, too, seems like a weak argument. If we really want to deter insider trading flowing from Congressional knowledge, legislation seems like a much more effective and direct means of doing so.
If anything, the more interesting arguments against the STOCK Act are that it isn’t strong enough. While the STOCK Act amends the rules of the House of Representatives to prohibit disclosure of material, non-public information to others, for some reason it does not similarly amend the rules of the Senate. In addition, while corporate executives must publicly disclose their securities transactions within just two business days under the Sarbanes-Oxley Act, the STOCK Act gives members of Congress the luxury of a full 90 days to do so.
Finally, the STOCK Act places greater restrictions on federal employee insider trading than on congressional insider trading: While it broadly prohibits federal employees from trading securities based on material non-public information relating to the issuer of the securities, it only prohibits insider trading by Congressmen with respect to “any pending or prospective legislative action relating to such issuer …”
In short, a loophole currently allows members of Congress and their “tippees” to engage in legal insider trading based on what they learn from their elected positions. The only way to close this loophole is for the very people that benefit from the loophole to close it themselves.
So far, however, the efforts of Representatives Slaughter and Baird to end this loophole have gone nowhere, and there is nothing to indicate that Round 3 of their attempt to “Stop Trading on Congressional Knowledge” will have any greater success. With hundreds of billions (if not trillions) of dollars of federal money poised to gush into the economy by the U.S. government, now seems like the perfect time to pass legislation such as the STOCK Act.
Originally published in Compliance Week. Reprinted with permission. © 2009 Financial Media Holdings Group, Inc. All Rights Reserved. Compliance Week can be found athttp://www.complianceweek.com. Call (888) 519-9200 for more information.
This is just one instance in what has been a carte blanche behavior that has led to the greatest wealth growth by percentile of any group of people in this country. While average households have lost money they have had returns of at least 185% above the net average. YES That is correct it is the net average increase of the figures below divided by the return timeline.
This is a trend analysis of the data compiled by the Center for Responsive Politics using their average net worth calculations.
The total net worth increase from ’04-’08: $151,550,660.
The total net worth in 2009: $291,093,347
|Growth ’04-’08||% Change||2009 Net Worth|
|Totals for 41 Dems||$75,707,343||756%||$95,620,163|
|Totals for 39 Repubs||$75,843,317||168%||$195,473,184|
|Total 2009 Net Worth||$291,093,347|
|Total $ Increase From ’04-’08||$151,550,660|
Here is the video report for the above information:
And it is not just our elected officials who are prospering while we suffer, here is a copy of an article from the Wall Street Journal from Oct. 11, 2010 that goes into length on one individual who recently doubled his $3500 investment in a solar stock.
So the Occupy Wall Street useless idiots are going after all the evil institutions with the support of the real thieves that besides the aforementioned personal gains through if not illegal, immoral behavior, are guilty of the single greatest act of outright theft in this countries history! Where is the 4.7 trillion dollars that was with interest, paid into the Social Security trust fund that they were entrusted to safeguard for the trustees?
The Democratic party with the use of the “Great Society” legislation stole every single cent plus all of the potential earned interest from said funds to create and fund the destruction of our Republic and its society. They used those funds to create the following bureaucracies and the entitlement programs which have not only failed the people they were “supposed” to help but instead enslaved them. Starting in 1965 and going forward they have used those “trust fund” dollars to create and fund the Dept. of Health and Human Services to create Medicaid which is bankrupting Medicare and almost every state in the union. The food stamp program which is overseen and funded by the Dept. of Agriculture where it is now 80% of their budget. The Dept. of Housing and Urban Development ( originally the Public Works Administration) which led to the great Housing Projects fiasco that many cities are still cleaning up, also the section 8 voucher program paying hundreds to thousands of dollars to individuals to subsidize or pay in full their rent. The Dept. of Energy and within it the low income utility subsidy for section 8 housing occupants. The list is so large that the subsidized programs created by Johnson and the Democrat party with this legislation would take up several hundred pages. In just the years since our government passed this legislation it has grown by 400% while our population has grown by 30% .
The Cronies who have been willful participants with the criminals factually identified in the information here today, and are just as guilty as the politicians who have benefited from their largess and contributions. They deserve to be punished as much as, if not more so then the politicians themselves, because they are even more duplicitous and create the fiscal opportunities by which the others have prospered. They have used their financial positions to subvert and subjugate this countries free market and replace it with a centrally planned economy run by a socialist autocracy where we have lost our freedom and created the useless idiots who now protest them.
The useless idiots that occupy Wall Street are being used and manipulated by the Democrat party and their co-conspirators because their whole agenda for America is being repudiated by overwhelming numbers and they are now in full damage control mode. They need a villain besides themselves and when your entire modus operandi is based on the Marxist socialist model, you use class and racial warfare to vilify your enemy and hide your fear. You identify a group or class and keep lying about them until you incite mob reaction and then foster that reaction with your thug army. You use your propaganda to create a false persona of the offensive behavior or action or completely repudiate and lie about the obvious actions or words from those you support. You infiltrate the mob with your manipulators to direct and focus the mob into following and implementing your agenda. You use your media personalities that can communicate your message without being eviscerated by the media. You continue to incite violence or rebellious behavior without overtly implicating yourself or your agenda.
This was used with great effect in 1917 to oust the last Monarchy from Russia and start the reign of communist rule with 80 million people paying the price with their lives.
This worked well in 1932 Germany and helped elect a little known former convicted political agitator by the name of Adolf Hitler.
I hope it does not come to this but as long as we have the criminals in this country untouched by the law and hiding behind the same Constitution that they are bent on destroying, then we must be ready to fight for our Freedoms and our lives if necessary.
Dr. Keith C. Westbrook Ph.D.