CHICAGO (NewsNation Now) — The Federal Reserve last week banned its policymakers and senior staff from investing in individual stocks and bonds. They would also have to provide 45 days’ advance notice of any trade and receive prior approval from ethics officials.
Could the same ban happen to Congress? Tracy Byrnes, a financial adviser with UBS, believes that it should.
“Anyone that has access to more information than you and I do should not be allowed to,” Byrnes said on “The Donlon Report ”on Tuesday. She added, “If you have access to people, information, anything else other than what the rest of us have, it should be off the market.”
Many media organizations have reported that several members of Congress have violated or broken the Stop Trading on Congressional Knowledge Act, or the STOCK act. The act, which was passed in 2012, makes it illegal for members to use insider knowledge for trading and requires them to disclose, within 30 to 45 days, any transaction of a stock, bond or other security larger than $1,000.
Byrnes says that the STOCK act should be taken seriously by lawmakers because many Americans have to follow these rules.
“When I was with Ernst and Young, we had very strict policies. If we audited the client, we couldn’t own the stock. When I was a journalist, and we sat in newsrooms, we couldn’t own stock because we got people on the phone.”
Byrnes also added that these lawmakers have access to information before the general public, which means they could have a chance to engage in inside training. She said this is the sort of situation that creates trust issues for Americans.
“There are so many people sitting on the sidelines after the financial crisis, you know, people who have gotten burned over the years are sitting on their cash, and they’re missing this market run,” she said. “We’ve heard for years now that Wall Street is crooked, and then you can’t compete with them when I can’t compete with Washington, either.”
Early last year, several U.S. senators sold off stocks after sensitive briefings on the dangers of a new coronavirus just starting to emerge out of China. Republican Senator Richard Burr, for example, unloaded $1.7 million in stock roughly a week before the market tanked due to COVID-19 shutdowns. Burr is one of four senators to have sold stock after the briefing, including Democrat Dianne Feinstein and Republicans Kelly Leoffler and Jim Inhofe.
Brynes also said with lawmakers owning their stock, it prevents the average American from benefiting from the stock exchange.
“So if all these people are making money, and the little guy that’s working really hard, that just wants to put some money in a retirement account and save for a rainy day, if he or she thinks that it’s rigged, they’re not going to invest. And that’s not good for any of us at the end of the day.”
Byrnes believes that lawmakers should be held accountable. She said the enforcement of the STOCK act would help reduce the trust deficit between Washington, D.C., and the rest of the country.
“I think that someone should come out, though, and eventually put their foot down,” she said. “They’re gonna have to work through capital gains issues with all these leaders, because they probably will be sitting on gains that won’t want to take on the tax.” She added that there certainly will have to be ways around this, but they really have to put a stop to it, “because it’s just getting worse and really getting more and more kind of insulting to the rest of us.”
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