Insider trading is illegal. Children (adult or otherwise) of individuals in possession of material non-public information about a company are not allowed to trade stocks based on that information.
The way I see it, congressional trading rules are a natural extension of insider trading rules. Children/spouses should be prevented from trading not because they are children/spouses, but if/because they’ve been made aware of inside information.
What part of the constitution would prevent such rules from being implemented?
If that's the case why is a new law needed in the first place? The adult children are independent of their parents and can be prosecuted under current law.
For the same reason a new law is required for elected officials. If an elected official is currently exempt from insider trading rules, and if the rationale is that the official doesn't actually hold "inside" information, and if it's necessary to change that, then it follows that the "tipping" clause must also be updated.
This could also depend on how a new law is written. If the law is explicit that information gained as an elected official is material/non-public, then existing tipping clauses may already account for this.
However, if this is not explicitly accounted for, it becomes an easily exploited loophole.
I'm still curious though - why is this potentially a constitutional issue?
Comments
Insider trading is illegal. Children (adult or otherwise) of individuals in possession of material non-public information about a company are not allowed to trade stocks based on that information.
The way I see it, congressional trading rules are a natural extension of insider trading rules. Children/spouses should be prevented from trading not because they are children/spouses, but if/because they’ve been made aware of inside information.
What part of the constitution would prevent such rules from being implemented?
If that's the case why is a new law needed in the first place? The adult children are independent of their parents and can be prosecuted under current law.
For the same reason a new law is required for elected officials. If an elected official is currently exempt from insider trading rules, and if the rationale is that the official doesn't actually hold "inside" information, and if it's necessary to change that, then it follows that the "tipping" clause must also be updated.
This could also depend on how a new law is written. If the law is explicit that information gained as an elected official is material/non-public, then existing tipping clauses may already account for this.
However, if this is not explicitly accounted for, it becomes an easily exploited loophole.
I'm still curious though - why is this potentially a constitutional issue?
Pretty sure that is not the case. It's members of a household. Grown children living elsewhere are not restricted.