(The Motley Fool is a community of diverse opinions. The following is the writer's opinion and does not necessarily represent the views of The Motley Fool.)
As an individual investor, and a member of The Motley Fool, I am writing to register my support for H.R. 1148, the "Stop Trading on Congressional Knowledge Act" (STOCK Act.)
For years, academic and journalistic analyses have described the significant outperformance of members of the House and Senate, including their staffers and family members, when investing in the stock market. In some cases, members of Congress have been clocked at 12% annual outperformance of the S&P 500. (Warren Buffett, during his tenure as head of Berkshire Hathaway, only managed 10.8%.)
Such investing success seems extreme. It raises suspicions that our legislators, elected to do the People's business, are in fact trading on their non-public knowledge of laws in progress and planned. This gives them the ability to achieve investing returns beyond those ordinarily achievable by the lay investor. While such action does not currently violate any laws, it should.
Pass the STOCK Act now, and it will.
Rich Smith started this petition with a single signature, and now has 4,978 supporters. Start a petition today to change something you care about.