There has been much ink spilled about the SEC’s recent aggressive moves on insider trading allegations, from Rajat Gupta and Goldman Sachs to its pursuit of Steven Cohen of SAC Capital fame to calls for scrutiny of Rule 10b5-1 Plans.
However, lost in the shuffle to punish people who made more money than other people in the stock market is the recent news about federal employees engaging in conduct that is far worse.
The Washington Post (who hasn’t objected to the behavior of federal employees since January 20, 2009) today noted that hundreds of federal employees were told of important Medicare decisions weeks in advance of public release, which was also just before trading of shares in firms impacted by the decision spiked. The public shouldn’t be alarmed because “agency officials said they take care to safeguard information and carefully vet which employees have access to it. Employees are educated regularly about he need for confidentiality and CMS documents are often stamped with warnings about early disclosure.”
Sen. Charles Grassley said that this should sound an alarm and should result in better controls to avoid unfair access to information.
Great. More rules that won’t be followed by people who will not be punished for engaging in behavior that will cause the government to destroy the lives of non-public sector employees. So the answer is to talk about more rules for making illegal behavior super-illegal. That should solve everything.