Rumours of insider dealing within and close to the Trump administration persist. Satirical piece on corrupt politics and potential consequences
Looking at the timing of President Trump’s utterances as far as theirs war is concerned, I can‘t help thinking that somehow they might actually benefit members of his inner circle or other close associates in allowing them to suitably time their stock market moves.
Critics point to instances where Donald Trump posted or made strong or angry statements about Iran after markets had already closed on a Friday, dutifully soothing the mood in time before markets opened on Monday.
Take the recent announcement of peace talks: oil prices dropped and stocks rose immediately. Members of POTUS‘s close circle could make money by placing orders in the market knowing of but before the actual announcement. According to, for example, the Christian Science Monitor, a number of huge trades happened minutes before some of Trump’s Iran announcements or social media posts while there was no public news yet to justify those trades.
Of course no one has any concrete evidence of insider trading and, according to Time magazine, the White House even warned staff not to trade on confidential information. The suspicions that some parties close to the administration are using their insider trading knowledge will continue to linger however.
And for good reason as there are a number of well documented precedents of insider dealing. Take Raj Rajaratnam, the Sri Lankan born billionaire founder and former manager of the Galleon Group, a New York based hedge fund who ran a massive insider trading network: based on wiretaps of corporate insiders feeding him information, in 2011 he got sentenced to 11 years in prison.
Then there was sitting US Congressman Chris Collins who learned privately that a biotech drug trial had failed. He tipped off his son who sold the shares before the news became public. In January 2020, Collins was sentenced to 26 months in federal prison and fined US $200’000. He served part of his sentence in a minimum-security Florida facility before receiving a presidential pardon from Donald Trump in December of the same year.
I obviously can’t help wondering whether republicans in the United States are more likely to succumb to the temptation than democrats, but some independent analyses by watchdog groups and financial researchers such as the Cato Institute generally find that members of Congress from both parties tend to outperform the market on average (although other research equally plausibly disputes this). This could suggest possible advantages like privileged access to information, policy insight and timing awareness. But differences between political parties are small or inconsistent.
Undeniably the temptation to benefit from privileged access to decision makers and information will always lead some people to try to monetise such knowledge, and there are numerous safeguards and regulators monitoring market activity to prevent this from happening. In this sense for example the Trump family and their close associates are rumoured to have made billions of dollars on the back of the various decrees and comments made by POTUS. Regulators will or will not investigate, as the offence of insider dealing is notoriously difficult to prove and the current U.S. administration is rather going after its political opponents than holding up the law irrespective of party affiliation.
But besides the legal it is also an ethical issue: am I tempted to deliberately benefit from an information advantage, even when knowing or at least suspecting that I may be breaking the law? At least I am asking myself the question – many politicians und business leaders nowadays are not.
The grumpy older man 