Paul Ryan traded on insider information to avoid 2008 crash

reply to post by Blackmarketeer

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.

Because of this...

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.

Here's the meat and potatoes.

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.”

As indicated above, there is a process and precedent for those who want honesty and transparency rather than a game of political chess and innuendo. The original title of this thread plastered a "guilty" label on Ryan. Guilty of what? Everyone states that what he was allegedly doing is within the rules that were signed by Obama. Why the witch hunt when clearly no one else saw the need for a hunt until Ryan was named VP running mate. This was 4 years ago!!!

www.washingtonpost.com...

Seems to be a case of over-zealous reporting:

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.

www.slate.com...

Of course, it's still a possibility that something nefarious occurred but it's also a real possibility that nothing illegal occurred at all.

reply to post by jibeho


As your own source says, Bachus never faced SEC scrutiny nor was he charged with any crime; why should we expect Ryan to be treated any different?

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.

He only faced an ethics committee (which cleared him), and his trades were much more blatant (shorting stocks). He is also living proof how Congress can get away with insider trading. Ryan was dumping Citibank and moving it all into Goldman Sachs. The rest of the nation was looking at GS like they were the next Lehman Bros. If he was making a "run on the bank", like some suggest, why didn't he dump GS as well? He didn't, he bought into it, and not through some Russell 1000 Index, he bought those shares himself through his own investment account.


Ryan's defense, from the article:

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.

Quickly disproved, since the stocks in question were bought by a RHIP - Ryan-Hutter Investment Partnership - and not by a Russell 1000 Index. News flash for Ryan flacks: If you own an index fund, or any other fund, you don't trade the individual stocks. You report your shares you own in that fund. Whatever stocks that fund trades in, is entirely up to them to report in their own financial disclosure forms.

“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.”

Ryan's camp says "this index was held at the time within a partnership in which Rep. Ryan had and continues to have no trading authority." He is reporting these as individual transactions, so where is the listing of the value of the partnership? The Russell 1000 is rebalanced just once, annually, in June. His forms show monthly trades, which have nothing to do with any Russell 1000 fund.

Also, the above statement from the Ryan camp conflicts with their other statement - they seem to acknowledging the questionable trades were made by Ryan's ownership in his own investment partnership (RHIP) as opposed to any Russell 1000 Index funds. So why the two mutually-exclusive excuses?

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.

Some defense - Bachus' trade were also deemed NOT to be "insider trading" - cleared by the ethics committee AND cleared by any application of the law. Since Bachus' (according to Congress itself) did not engage in "insider trading", then claiming that Ryan's trades, by virtue of not resembling Bachus', is proof Ryan didn't also engage in insider trading is utterly meaningless.

We know the score - Ryan just like Bachus (just like half of Congress), engaged in some insider trading. To think Ryan (or any of those attendees walked into that Sept. 18th meeting blindly, without having a good head's up on what was going to happen, is absurd. But then again, I'm saying it's proof he did anything illegal (or at least illegal for a Congressman), it's just suspicious.

If he didn't have anything to hide, why the lame and conflicting excuses about his trades?

• Paul Ryan's Bank Stock Trading
  
• Paul Ryan's Wall Street connections
  
• Treasury Secretary Henry Paulson

Interesting to note, from the first link:

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.

The trades in question, according to this author, would have since been made illegal under the STOCK Act. Good thing, then, for Congress members like Ryan that one of their own slipped that little loophole into the STOCK Act so they can stay above the law.

reply to post by RealSpoke


Members of the House and Senate can legally participate in insider trading. Not a bad perk.

reply to post by Blackmarketeer


I said SEC or House ethics in one of my posts. I made a clear illustration of the House Ethics hearing regarding the same scenario that has been alleged and NOT proven in this case. Period. Thanks for repeating yourself again though...

reply to post by RealSpoke


Don't you know? It's perfectly legal for Congressional Representatives and Senators to trade on insider information.. Look at Nancy Pelosi!
Another perk for our reps...

I wonder if you took the time to check out Biden while you were at it. I didn't think so.
Well if you didn't check out Biden that just makes you an Obama troll.
You people need to get a grip. Obama sucks and nothing you can do or say will change that..
By the way I hate Romney too. So don't even go there.

reply to post by Diisenchanted


Do you have any evidence Biden did anything like this? Not defending Biden or any of the other 535 members of Congress, it's usually hard enough to get anyone to pay attention to the insider trading that Congress engages in, without someone rushing to defend these people by saying "well, why did you go after so-and-so." Ryan made some anomalous trades, and his defense for those trades doesn't hold up. Those trades just happen to overlap with a key secret banking committee he sat in on.

More people should be paying attention to Congress members financials, and calling out suspicious trades like these for oversight into possible insider trading, AND more people should be paying attention to what's going on with the STOCK Act.

We all complain how corrupt Congress is, but then sit by and watch as one key member guts an act designed to reign in the corruption, and not one post about it here on ATS. Instead we get partisan hacks rushing in to defend their boy (not directing this comment at you), instead of admitting it looks bad. GUARANTEE had this been about Biden in the thread title it would have 500 stars and flags.

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

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

It's hilarious!! actually, when you consider all those fingers pointing back at yourself and considering recent threads and defending remarks regarding Biden's most recent statement.

Politically, ATS has a distinct leftward bend. You will soon be in good company as election day grows ever closer. The 2008 election cycle will look like child's play. The PROS are getting their ducks in a row. Fortunately, ATS has made some good changes since 2008 to stem the tide of the join, post and run crowd .... that tend to follow the major elections....

Just pop plenty of popcorn....

Considering how eagerly repubs supported investigating Clinton's sex life, it is extremely hypocritical for them to complain about a legitimate investigation on congressional insider trading.

Repubs always scream about how crooked DC pols are, yet here there is a legitimate reason for an investigation, and they complain about it. A prime example of the dishonesty of the right.

reply to post by poet1b


The problem is that there is not a legitimate investigation of anything yet the fingers point and the accusations fly in a trial by media. Zero. No proof of anything beyond a disclosed trade that occurred before the meeting in question.

Simple. Deny ignorance is the theme of ATS

reply to post by jibeho


Spare me your accusations. You seem to resort to petty name-calling and whining about "liberal bias" whenever someone disagrees with you. Especially when exposing fraudulent claims made by sites like Breitbart or WND is the basis for your attitude.

Regarding Biden, the handful of times I responded to some lies being generated by some right-wing blog or news entertainment site like Hannity's, just to point out the falsehoods perpetrated from them, (such as the claim Biden addressed an empty NAACP convention), I get attacked for it. Yet the claim was a lie, I posted clear video/photo proof it was a full crowd. Isn't the goal of ATS to expose the truth? You attack anyone for not buying into some right-wing lies.

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. He claimed these show up in his financial release forms because of his holding a Russell 1000 Index fund. These were individual stock trades, not part of some index fund. You would have to be in grade school to believe his explanation. On that key date he sells off all his failing banks and buys only into GS, the one bank about to get the biggest bailout from the federal gov.

reply to post by Blackmarketeer

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.

Sounds familiar...

You say I am name calling??? Everything else you say goes double for me. Certain elements always attacking my sources blah blah blah.. I'm over it...I expect it. I guess if we all just watched NBC everyday we would all just get along fine and we would never know anything else....

Have a nice day!

Paul Ryan Insider Trading Thief

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.

To repeat the salient facts:


#1. Buffett's plan to buy Goldman stock was likely discussed at the meeting on the 18th that Ryan attended.

I would further add, that these meetings come with all sorts of prepared charts and materials that are distributed to those attending in advance. (I did an internship and worked as a page in D.C.)

#2. 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

"Unusual trades" is precisely how Ryan's trades look. Like Durbin's, unusual trades are a good indicator something hinky is going on - like someone trying to capitalize on some insider info.

#3. 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.

Quoted for truth. This needs to be put right into Ryan's face so he and every member of congress can be made to realize we are sick of corruption. All these bums should be thrown out of office.

One does tend to despair at times.

One conclusion everybody seems to be reaching is that Ryan bought a lot of Goldman Sachs based on information from the meeting. I know financial forms can sometimes be complicated, but PLEASE LOOK AT WHAT YOU POST!

Did you not see that every purchase of Goldman Sachs stocks was before the meeting? If he wanted to buy in so seriously, why was every transaction after the meeting a SALE of Goldman Sachs stock?

The evidence you post, or argue from, states that Ryan sold Goldman Sachs on three occasions that year after the meeting. People here seem to be arguing that he bought it after the meeting. How in the world can a serious discussion take place under these circumstances?

I truly would like to hear an explanation for this sorry state of affairs.

reply to post by charles1952


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.

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.

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.

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.

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.

reply to post by Macabe

Dear Macabe,

Maybe, with a little work, we can narrow the scope of what we're looking at. It might be easier to spot the problem then.

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.

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.

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.

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.

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'm sorry, I've not heard of this book. Does it show proof that Ryan conducted insider trading?

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 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?"

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.

I'm not familiar with that story. Do you have proof he was lying?

We may have narrowed the possible problem areas a bit. That's a good start.

With respect,
Charles1952

P.s. Each of the Goldman Sachs trades during the entire year were between $1001 and $15,000. Whatever he was doing, it wasn't high stakes stock market trading. - C

reply to post by jibeho


Ah, yes, even though there has been no investigation, you are positive PR is innocent.

PR couldn't have possibly been aware before the meeting.

Or you just don't car about the truth unless it involve demo pols sex lives.

reply to post by poet1b

Dear poet1b,

You know me, I get confused easily. The topic started out as "Paul Ryan traded on insider information . . ."

Have we now gone to "You can't be positive he's innocent." And "Maybe he knew things before the meeting?" That's not much to get outraged about. I mean, if we're now saying "He might have done something wrong," why, bless me, so could I have, or you, or the President.

Innocent 'til proven guilty. Have a little charity.

With respect,
Charles1952