Electronic discovery cost containment for corporations, law firms, governmental agencies and the American people.
Tuesday, January 31, 2012
Congressional Legislative Transparency and Self Dealing - Implications of the STOCK Act
Isn't it amazing that the Stop Trading on Congressional Knowledge (STOCK) Act took so long to get traction in Congress? Well, maybe it's not so surprising after all. Essentially what this act does is preclude members of congress and their families from profiting on insider legislative knowledge that can significantly impact entire industries, let alone the valuation of an individual company's stock. The implications of the STOCK Act on the wallet and purse fattening insider trading activities of Congress are the clearest indication of why it took so long to pass, and it does not take a rocket scientist to see it. Now that the STOCK Act has finally gotten the attention it deserves, thanks in large part to a recent CBS 60 Minutes exposé focusing on the stock dealings of Nancy Pelosi in relation the credit card industry, the GOP has spent a great deal of time scurrying to expand the STOCK Act disclosure requirements to the executive branch.
How does the STOCK Act affect guys like Boehner who owns stock in at least 7 Canadian companies whose stock is poised to blow through the roof if the XL Pipeline is approved? If it is shown that there was one iota of self-dealing the promulgation of a bill put forth before congress, it'll ease the path to commencing investigations and the levying of charges of ethical violations. It may also trigger more substantive SEC investigations. The blood is already in the water and feeding frenzy has already begun, one group has brought an action against Boehner by filing a complaint with the SEC alleging that he is in violation of SEC Rule 10b(5)* and called for him to resign. It's simply a matter of time before more information on the dealings of individual members of congress is mined and consolidated from publicly available sources and they become targets as well.
As the collective political and social ethos of American slowly wakens from its slumber, thanks in large part to the fact that our economy and debt situation is so bad, we're going to want to skewer the guys at the switch and this includes everyone from the President on down. The bottom line is when legislation of any kind is afoot, we as Americans should say to ourselves "follow the money". In more cases than not we'll find out that corporate and foreign special interests have corrupted the legislative and political process in ways that are frankly unimaginable. However thanks to powerful web and social media discovery tools and an increasingly savvy, activist average American, we don't have to stand idly by and see America lose its standing in the world.
e-Discovery and associated investigative skills are not just for litigation or compliance, they're also for average American citizens who wish to hold out elected officials accountable.
For a nice read on the STOCK Act, go to The Hill - Democrats see new weapon in congressional insider-trading bill.
*Employment of Manipulative and Deceptive Practices to bolster stock prices.
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