Insider Trading: Profit Over People

Over the course of the pandemic and now more than ever from political campaign ads, the topic of ‘insider trading’ has been front and center. Currently, Georgia faces two run-off elections for the Senate. Both incumbent senators, David Purdue, and Kelly Loeffler have been accused of insider trading, and their opponents, Jon Ossoff and Reverand Raphael Warnock, have utilized these allegations in campaign ads. But what is insider trading and does it really matter?

 

Insider trading is the act of buying or selling a publicly-traded company’s stock by someone who has non-public information. To give you a simple somewhat relatable example, let’s pretend you are Demi Lovato’s assistant (it can be any singer if you’re not a fan). You know Demi is about to drop the best album she’s ever made, and she’s going to go on a world tour but it’s a secret within her base. With secret information, you start investing stock in Demi’s record company, the company she rents tour buses from, the light company, and so forth. With the private information given to you, you were able to set yourself up for profit once her album is released. 

 

When discussing music and world tours, insider trading doesn’t seem so harmful. Sure, you went behind your friend/employer’s back, broke her trust, acted in your own self-interest, and profited off her success before anyone else had a clue to what the hell was going on - but nobody was physically hurt in my hypothetical example so everything is okay, right? What if we weren’t talking mutual gains of you and Demi but we were talking loss, like selling stock knowing the market is about to crash? 

 

The STOCK Act of 2012 is meant to prohibit Members of Congress and other government employees from insider trading and promotes transparency by requiring all members to disclose trade and business agreements. There are no safeguards put in place to ensure insider trading doesn’t occur, just actions to take when an accusation is brought forward. While Senator’s Loeffler and Perdue have been accused, they maintain their innocence and claim independent parties handle their finances. Loeffler has been investigated by the Ethics Committee and the case is considered closed with no record of wrongdoing. 

 

Like Uncle Ben from Spider-Man once said “With great power comes great responsibility.” When a Member of Congress is sworn into office they are meant to uphold the constitution and serve the people. Members are privy to classified information that affects every aspect of the average American’s life. Insider trading would suggest that a Member of Congress, who is put in a position to serve the people, takes information that affects the mechanisms of everyday life, and then makes decisions that benefit them first above all. Profit should never come before people, especially when working for the people is in your job description.