Today (well, for the last several weeks, up to and including today), the people of Georgia will decide who will represent them in the United States Senate and, with them, who will control that formerly august body and likely the fate of Joe Biden’s upcoming presidency. And, it seems relatively safe to say, were it not for Sens. Kelly Loeffler and David Perdue’s stock trading (especially Perdue, who seems to do a great deal more of that than senatoring), that would not be happening: While Biden narrowly took the Peach State’s electoral votes (and, yes, the Trumpkin official overseeing things assures you, once again, that Biden did, in fact, do so), Perdue almost as narrowly missed the outright majority of votes he needed to avoid today’s pesky runoff, in spite of the incredibly savage debate burn laid on him by his opponent and Perdue’s subsequent cowardly crybaby act in refusing future opportunities for Jon Ossoff to hit him with another. And that, in turn, would have settled the matter, as Republicans need only hold one of the two seats to keep Mitch McConnell’s bacchanalia of bad faith going for at least another two years, and would have saved the likes of John Paulson, Cliff Asness, et. al., from making the down payments on lower tax bills and such they’ve been forced to as a result of Perdue’s failure. And it seems at least a fairly strong possibility that the 13,400 votes and change Perdue needed might have been there had he not had to spend so much of his time on the trail explaining to his constituents why he felt it appropriate, in the midst of a pandemic that has killed 10,000 of them, to be wheeling and dealing rather than asking his Dear Leader to do something about the problem. (Like, say, some $2,000 checks, perhaps?)
Well, if, in spite of all of the self-inflicted wounds either or both Loeffler and Perdue manage to hold onto their jobs today, old friend Andrew Ross Sorkin has a proposal to spare them the above indignities in two or six years’ time, respectively, and also to give Perdue a lot more free time for his day job.
The next head of the S.E.C., expected to be named in the coming weeks, could seek to put in place a new rule for broker-dealers, the financial intermediaries that all trades go through and that the agency oversees. The rule would require the broker-dealers to set up a special compliance program for clients known as “politically exposed persons,” a term that financial institutions know well as part of anti-money-laundering and bribery laws.
The S.E.C. compliance program would require the broker-dealers to ask those clients — which could be defined as members of Congress, their spouses and senior members of staff — to personally answer a questionnaire every time a trade is executed, irrespective of whether the trade is instigated by them or a financial adviser. That would eliminate the frequent excuse that Congress members give about not being involved in trades, even when they are….
The broker-dealer would be required to submit details about each trade and the questionnaires within 24 hours to the S.E.C., and, crucially, both the trade information and the questionnaire would be published on the S.E.C.’s website, where they could be viewed by investors and the public.
Of course, members of Congress could still buy and sell broad-based mutual funds. But timely disclosures of the trades, along with a questionnaire that would create liability for officials if they didn’t tell the truth, are likely to stop the trading of individual stocks.
On the other hand, if Perdue and/or Loeffler were to lose today, there’d be a bright side in that both would get to keep trading to their hearts’ content, and if both do, Congress could just dispense with the need for Preet Bharara or Gary Gensler to get creative and, you know, just legislate an end to these sorts of embarrassing, electorally-dangerous hobbies.