Durbin cashed out during big stock collapse

Durbin cashed out during big stock collapse

www.suntimes.com

As U.S. stock markets plummeted last September, the Senate's No. 2 Democrat, Dick Durbin, sold more than $115,000 worth of stocks and mutual-fund shares

The Illinois senator's 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway's Class B stock, the disclosure shows.

(visit the link for the full news article)

There seems to be no question that this is insider trading. He used personal information acquired from officials at the highest levels of government to make his decision. This is the very DEFINITION of insider trading.

i don't care if this is a senator, or how well connected he is or how many excuses he will come up with, he deserves to be indicted for this and eventually serve time.

If martha stewart is sent to jail for "lying" to the justice system and therefore obstructing justice about something for which she was never even charged, this guy who is clearly in violation of the law, let alone the ethics rules of the senate, must be charged with a crime and tried. He must not be pardoned by executive order or anything else.

We need to know that even elected officials are held accountable for crimes they openly and knowingly commit.

www.suntimes.com
(visit the link for the full news article)

This makes me sick! He should be smashed in the media like Martha was! What a crook!

-E-

Wow! As I was typing this Rush just brought it up! Maybe it will get the coverage it deserves!

[edit on 15-6-2009 by MysterE]

Allot of people are gonna be hurt.

I fail to see what is so bad about this. Anyone could have sold at that time. Everyone knew that the banks were in trouble and that the gov. was going to give them a bail out when this senator did. Sure, he may have known a little more info. if you think they didn't release all the information to the public, but the fact is, all investors knew what the government was going to do and he just chose to get out while some didn't. Also, it is worth noting, Berkshire Hathaway class B shares made a 52-week low in February 2009...so that means he also lost money in any case.

reply to post by RetinoidReceptor


the fact that he ended up losing money is not the point. of course anybody who knows that stock is doing poorly will sell, but there is specifically a law against using secret information from inside the situation. this is not the same as you or me watching the news or reading the financial report and deciding to bail. this is using very privileged information. if he is not prosecuted for this, it will mean that he is receiving preferential treatment in regard to the law. there isn't the slightest doubt about this one. it will mean that we are totally into cronyism as a government, where the ruling regime can do virtually anything without even needing to hide it. let's just say it will be a new low.

Originally posted by RetinoidReceptor
I fail to see what is so bad about this.

From Wiki

Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to non-public information about the company.

In 2000, the SEC enacted Rule 10b5-1, which defined trading "on the basis of" inside information as any time a person trades while aware of material nonpublic information – so that it is no defense for one to say that she would have made the trade anyway

If you still fail to see whats wrong with this here you go...

Illegal insider trading is believed to raise the cost of capital for securities issuers, thus decreasing overall economic growth

-E-

What you guys don't understand is that this wasn't secret news. Everyone knew the banks were in trouble and that Congress was being asked to bail them out in September. If he did this before the news reported on this, and no other traders knew about this, then I would agree with you. But everyone knew that banks were in trouble at this point and that the financial system was teetering...not just Congress. He decided to sell. Others did too. He obviously didn't believe the world would end though since he bought Berkshire stock. He probably was just exposed to a lot of financials at that time. People who understood what was happening, if they were in the government or if they were just civilians, would have done the same thing.

Originally posted by RetinoidReceptor
What you guys don't understand is that this wasn't secret news. Everyone knew the banks were in trouble and that Congress was being asked to bail them out in September. If he did this before the news reported on this, and no other traders knew about this, then I would agree with you.

This wasn't just a matter of general knowledge about the banks' problems, this was when Hank and Ben locked themselves in an office with the top congressmen and told them there would be tanks in the street and martial law if we didn't shovel close to a trillion dollars into the banks and pronto.

The Illinois senator's 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway's Class B stock, the disclosure shows.