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Why would they be investigating it? For Paul Ryan, it's LEGAL to engage in insider trading. He and every other Congressman/woman can use the information from their committees and backroom Congressional dealings with banks to trade stocks.
The Office of Congressional Ethics, an independent investigative agency, opened its probe late last year after raising questions about trades on Bachus’s financial disclosure forms. OCE investigators notified Bachus that he was under investigation because they had found probable cause to believe insider-trading violations might have taken place.
But after reviewing the results of the investigation, the independent board that oversees the office voted Friday to recommend that the House Ethics Committee dismiss the case, according to people familiar with the case. The board notified Bachus of its decision Monday.
The case against Bachus was the first of its kind involving a member of Congress. It came at a time of intense public and media scrutiny of congressional ethics, with the House and Senate passing legislation this year to tighten rules against insider trading by lawmakers. President Obama has signed the measure into law.
In recent years, Bachus has made numerous trades, some of them coinciding with major policy announcements by the federal government and industries under his congressional oversight, according to a review of his financial disclosure forms by The Washington Post.
To prove insider trading, prosecutors must demonstrate that the subjects of their investigations had access to material, non-public information and that they intended to act upon that information to enrich themselves or others. Members of Congress can trade on information they learn in their legislative roles as long as it does not come from private, closed-door briefings and involve confidential facts that can affect the fortunes of companies.
On Sept. 18, 2008, at the height of the economic meltdown, Bachus participated in a closed-door briefing with then-Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke. At the time, he was the highest-ranking Republican member of the Financial Services Committee. According to a book Paulson would later write, the topic of the meeting was the high likelihood of decline across the entire economy if drastic steps were not taken.
The next day, Sept. 19, Bachus traded “short” options, betting on a broad decline in the nation’s financial markets, and collected a profit of $5,715.
The short options were reported in a book by Peter Schweizer, “Throw Them All Out,” which was the basis of a “60 Minutes” story that aired Nov. 13. Bachus criticized the reports, calling allegations that he engaged in insider trading “absolutely false.”
“The idea that I or anyone else needed this meeting to know our financial markets were in trouble is just laughable,” he wrote in the letter. “You would have to be living under a rock not to know by September 18, 2008 that the economy was in bad shape.”
Let me apologize. I originally had a too-credulous item here linking to a piece at The Richmonder alleging that Paul Ryan has sold bank shares after a closed door meeting with Henry Paulson and Ben Bernanke on the financial crisis in 2008. As Eric Platt explains he certainly seems to have sold the shares on the same day as the meeting, but the meeting happened in the evening by which time the markets would have been closed. One can perhaps construct a scenario by which the Richmonder's theory of the case holds up, but they don't have the goods and I shouldn't have passed their analysis on with no qualification and so little scrutiny of my own.
As Brad DeLong writes, for one reason or another Ryan did quite a lot of trading of individual bank stocks in 2008 so the timing of this particularly transaction isn't particularly noteworthy when put in that context. For posterity's sake the original item is below now in strikethrough.
The Office of Congressional Ethics has found no evidence of violations of insider-trading rules involving the chairman of the House Financial Services Committee and will recommend that the case against him be closed.
The Romney campaign said Ryan had nothing to do with the trades in the first place. They were part of a Russell 1000 index fund that automatically traded stocks as part of a pre-set formula.
“Trades are done automatically based on an algorithm on a regular basis,” said Gaffney, who works as a CPA in Ryan’s hometown of Janesville, Wis. “In addition, this index was held at the time within a partnership in which Rep. Ryan had and continues to have no trading authority.”
Peter Schweizer, the conservative Hoover Institution fellow whose investigation of insider trading by members of Congress prompted the STOCK Act, said Ryan’s trades bore no resemblance to those by lawmakers like Rep. Spencer Bachus (R-AL), who shorted finance stocks after high-level meetings.
Hobson: He bought Goldman Sachs stock.
Moore: Right. These are very small amounts and it was legal at the time, now the STOCK Act would make it illegal. But it’s still interesting that he had that information and then of course, used it in the market.
Originally posted by RealSpoke
reply to post by Blackmarketeer
GUARANTEE had this been about Biden in the thread title it would have 500 stars and flags.
Yup. ATS is so bias it is ridiculous
As far as Ryan goes, his own statements attempting to explain these stocks trades don't add up and only make it look like he has something to hide.
Ryan sold stock in US banks on the same day he attended a confidential meeting where top level officials disclosed the sector was heading for a deep crisis. He sold stock in troubled banks including Wachovia and Citigroup.
Not long after the meeting, Wachovia's already troubled share price went into free fall. It plunged 39% on the afternoon of September 26..
Citigroup's share price also fell soon after the meeting. Most interesting, though, while selling other bank stocks Ryan bought shares that day in Goldman Sachs.
September 18, 2008 was a Thursday. On the following Tuesday, Warren Buffett announced that the company he controls, Berkshire Hathaway, was making a $5 billion investment in Goldman Sachs. The stock soared after the news. Buffett's plan to buy Goldman stock was likely discussed at the meeting on the 18th that Ryan attended.
Senator Dick Durbin, who also attended the meeting, made some unusual trades of his own at that time. On the 19th. he sold his mutual funds and bought stock in Buffett's Berkshire Hathaway
In 2009, I wrote:
Goldman stock climbed by more than 40% from its low on the 18th to its closing price on the 19th. It would be interesting to know who was buying that stock, given that just 4 days later Buffett was going to plow billions into the company.
Now, we know who one of the buyers was: Paul Ryan.
On October 3, 2008, Ryan voted for the bailout, which resulted in even more money being pumped into Goldman.
As some resourceful poster has pointed out in this thread, the meeting was an evening meeting, and the purchase had to be before the meeting because the market closed. I think that means we can forget about the meeting on the 18th as being relevant in any way.
The gist, from what I've read, is Paul Ryan sold off stocks of 5 banks, and bought into Goldman Sachs, the same day as the meeting, in which it was likely discussed that Berkshire Hathaway would be pouring 5 billion dollars into. That would mean Goldman Sachs was going to cash in big time. Sept. 18th was also the day the stock was at it's low point, the very next day it began a meteoric climb in stock price.
From the source shown in the OP, Ryan had three transactions with Goldman Sachs that year after the September 18th meeting. Every single one of those transaction were to SELL off Goldman Sachs, not buy it.
But something overlooked in all this, is that there was also a September 16th closed door meeting with the same cast as the meeting on the 18th. Sen. Durbin, who is also accused of insider trading (along with Bachus), had ALSO began selling certain bank shares just after that meeting on the 16th, although it's the trades he made after the meeting on the 18th that became most well known.
I'm sorry, I've not heard of this book. Does it show proof that Ryan conducted insider trading?
A writer by the name of Peter Schweizer has written a book called “Throw Them All Out: How Politicians and Their Friends Get Rich off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison.” that gives some information on both the Sept. 16th and 18th meetings between Poulson, Bernanke, and various members of Congress.
I suppose he could. I suppose anybody in Washington could, but don't you think we need a little more evidence than "It's theoretically possible that he did it?"
It would be foolish to think the "insider information" could ONLY come from within the meeting itself. There would have been all sorts of sharing of that information among members, talking in the halls, "scuttlebutt" and the like. If Durbin knew by the 16th to buy/sell certain bank stocks, then so could Ryan.
I'm not familiar with that story. Do you have proof he was lying?
The telling factor, IMHO, is Ryan's reaction to this expose - he came back with some unbelievable story about it being tied to something called the "Russel 1000 Index". That can't be true based on the info he reported, and serves only to call into question why he would make up a lie like that.