4 Pages Posted: 24 Jul 2009
Date Written: July 20, 2009
This written testimony accompanied Professor J.W. Verret's oral testimony before the House Committee on Financial Services. This testimony highlights some of the costs of the Stop Trading on Government Knowledge Act, or STOCK Act. It argues that Section 2 of the Act, which would include in the definition of insider trading any trades based on material non-public information obtained from government sources about pending laws or regulations, stretches insider trading law beyond its original foundation in fiduciary duty principles in a way that risks harm to efficient flows of information about political risk in capital markets.
Keywords: Bank of America, Citigroup, Congress, Emergency Economic Stability Act, Federal Reserve Board, Gwen Moore, Judy Biggert, SEC, Securities Exchange Commission, TARP, Treasury Department, U.S. v. Chiarella
JEL Classification: G24, G28, G38
Suggested Citation: Suggested Citation
Verret, J. W., The Legitimacy of Political Intelligence Trading and the Threat of Insider Trading by the Treasury Department (July 20, 2009). George Mason Law & Economics Research Paper No. 09-35. Available at SSRN: https://ssrn.com/abstract=1436660 or http://dx.doi.org/10.2139/ssrn.1436660