Thread: paul ryan insider trading scandal

UH-OH

Ryan attended a closed meeting with congressional leaders, Bush's Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008.
The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks.
>>SNIP<<
Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs,
a bank that the meeting had disclosed was not in trouble.

Paul Ryan used inside info to profit from the financial crisis


ryan's schedule IV disclosure forms are below, and show the equities bought/sold and the date.





Paul Ryan Insider Trading - Business Insider






while technically legal at the time, this is very sleazy....and unlike a lot of financial scandals, this one is not difficult for the average american to understand.

this could have legs.

the romney campaign is in damage control mode:

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. Ryan’s disclosure forms include several similar trade patterns at various points throughout the year.

In a statement provided to TPM through the Romney campaign, Larry Gaffney, the independent accountant for the partnership who handled the trades in question, said the stocks were out of Ryan’s control.

“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.”

Hmm.

It's possible something was lost in the game of telephone between accountant Gaffney, the Romney campaign, and Talking Points Memo, but this explanation makes no sense.

First, the Russell 1000 is an index of 1000 stocks. Ryan's trades were mostly in a handful of bank stocks.

And then there's the question of what exactly this index "algorithm" was designed to do.

Here's DeLong again:
There is no way in hell--if you are rebalancing to try to track the Russell 1000 index--you make only 58 trades in a year, that you make 27 of those 58 in large money-center banks, and that 10 of those trades involve shifting your money from Citi to Goldman and back five times.

No way in hell.

Given how dumb an investing strategy this rapid-fire trading would appear to be, let's hope that Ryan did indeed have "no trading authority" here. And for the sake of Ryan's financial health, let's hope that the trading strategy makes more sense than accountant Gaffney's explanation would suggest.

UPDATE: Twitter reader @richfreed has an explanation that might explain this: Ryan's accountant appears to have been "harvesting losses"--a tax minimization strategy--while maintaining exposure to bank stocks: "Paul Ryan appears to have harvested losses while avoiding wash sales. Maintaining exposure to financials. Note 31 day intervals."

Read more: Is Paul Ryan A Terrible Stock Trader, Is His Broker Confused, Or Is There Something Else Going On Here? - Business Insider


curiouser and curiouser.

Well wouldn't YOU do the same ffs?

That didn't take long to surface. What's next? Citizenship questions?

Well, we'll see if this sticks, Ray.

In today's atmosphere of corruption that is endemic, I am not sure if this will stick with voters, but this story will be used by the opposition.

Sure it's sleazy. But it's one of many today's climate.

Serious question.

How is what Ryan did different than what Martha Stewart did, which got her locked up for a few months?I

^

he seems to be caught red handed to me, but maybe they were automatic trades based on an algorithm. so i would also like to hear from those with experience in the area.

Originally Posted by misskit

How is what Ryan did different than what Martha Stewart did, which got her locked up for a few months?

It was not illegal for members of congress to make trades based on knowledge of upcoming legislation or things they hear in committees etc. Same reason Pelosi was able to make a few bucks off something to do with credit card legislation a while back IIRC.

If course the right wing went off the deep end about Pelosi's case, let's see how they react to this..

Originally Posted by misskit

How is what Ryan did different than what Martha Stewart did, w

Oh,oh sexual harassment coming next? Contact you're lawyer as fast as you can as their definitely seems to be gender discrimination here.

Originally Posted by raycarey

^

he seems to be caught red handed to me, but maybe they were automatic trades based on an algorithm. so i would also like to hear from those with experience in the area.

Those trades are not based on an algorithm replicating the Russell 1000 index. But apart from that the Russell 1000 index is available to be purchased in a single security with no further need for 'rebalancing' which incurs trading costs etc. Pure fantasy.

Originally Posted by barbaro

Well, we'll see if this sticks, Ray.

Won't here a peep from the Dems "officially". Pot kettle bag of worms for either party to start on. Sure some Dem blogs will bring it up however.

Originally Posted by raycarey

he seems to be caught red handed to me, but maybe they were automatic trades based on an algorithm. so i would also like to hear from those with experience in the area.

the story sounds fishy, but if the account is discretionary with a money manager contract on it, not an accountant, then it's possible that the money manager was actively trading the R1000, probably based on insider information from his client. If the account is controlled by Ryan alone, then very unlikely.

Originally Posted by quimbian corholla

It was not illegal for members of congress to make trades based on knowledge of upcoming legislation or things they hear in committees etc. Same reason Pelosi was able to make a few bucks off something to do with credit card legislation a while back IIRC.

exactly, I think it's not illegal for member of Congress to engage in Insider trading as long as they disclose it or some other non-sense. The usual American system, double standard.

I'm afraid it's straw clutching, and nothing to do with the legality of it:

In fact, the meeting with Bernanke took place in the evening after trading hours, meaning Ryan wouldn’t have had time to execute the move if he wanted to.

Link

And anyway, it was legal then but it isn't now:

Keep in mind, also, that the practice of Congressional insider-trading was totally legal until earlier this year, when Congress got embarrassed by 60 Minutes and decided to outlaw it via the Stop Trading On Congressional Knowledge Act.

There is no need to be rude simply because you haven't fully grasped the story.

I merely pointed out that the trades in question took place before the information was passed to Ryan in the meeting with Bernanke.

I would think you would understand that you cannot trade on insider information if the market in question is closed.

He had already completed the trade BEFORE the meeting in question, and the markets were closed by the time the meeting took place. In the rush to get this piece of gossip to press, it would seem some journalists didn't bother checking little things like details.

Of course, there is the possibility that he received information prior to the meeting which is not in the public domain.

But even assuming this is true, and the trades were done with his knowledge based on such information, his actions might have been questionable, but not illegal.

And if they can't prove that he was acting on prior information, they can't even throw that iota of mud at him.

In fact, here is the erroneous report that threw the mud in the first place.

Ryan attended a closed meeting with congressional leaders, Bush's Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008. The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks. Instead of doing anything to help, Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs, a bank that the meeting had disclosed was not in trouble.

This kind of trading might be illegal now but was definitely kosher back then when insider trading rules didn't apply to Congress at all. My guess is that it's probably fine even under today's rules, since even though it fits the ordinary language meaning of "insider information," it doesn't actually make Ryan an insider to the companies in question in a legal sense. But it's about as clear an example of a public official trying to use his office to obtain personal benefits as you're likely to find.

Note the use of "On that very same day". The story is clearly designed to fool the reader into a false version of the timeline of events.

Do you understand now?

On the topic of Paul Ryan, I'll put this here. Ryan the influence (or non-influence of Ayn Rand on him).

The title of this article may be misleading. More 180 degree turns and bullsh*t from a politician in the run for an office position. Mixed messages.

Wisconsin's First District has voted him into Congress seven times over the past 14 years, but popular as Paul Ryan is at home there may be another constituency that holds the Republican vice presidential candidate in even higher regard.

Ryan, you see, is the country's most powerful Randian. At least, he used to be. More on that in a moment. First, a look at his adoring relationship with the work of Russian emigre novelist Ayn Rand, author of "Atlas Shrugged" and "The Fountainhead."

It began, according to a 2005 speech Ryan gave to The Atlas Society, when he was still a student. And it guided his thinking on monetary policy decades later:
"I grew up reading Ayn Rand and it taught me quite a bit about who I am and what my value systems are," he told the group. "It's inspired me so much that it's required reading in my office for all my interns and my staff."

Ryan has since denied making his staff read the books.

He continued: "But the reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand. And the fight we are in here, make no mistake about it, is a fight of individualism versus collectivism."

Rand's literary inner circle was called, ironically perhaps, "The Collective."

Individualism, or objectivism in some cases, provides the philosophical underpinnings for most of Rand's narratives. The novelist and literary critic Harriet Rubin wrote bluntly in the New York Times that "Atlas Shrugged" is a "glorification of the right of individuals to live entirely for their own interest."

It also celebrates atheism, treating religion with a degree of scorn.

"If devotion to truth is the hallmark of morality, then there is no greater, nobler, more heroic form of devotion than the act of a man who assumes the responsibility of thinking," one of Rand's characters says in the novel, the "alleged short-cut to knowledge, which is faith, is only a short-circuit destroying the mind."
This is where politicians and business leaders tend to pull up.

Ryan has, as noted above, taken a step back from his avid Rand-regard in the past few years. And in an interview with the National Review this April, he did a pretty firm about-face:

"I reject her philosophy," Ryan says firmly. "It's an atheist philosophy. It reduces human interactions down to mere contracts and it is antithetical to my worldview. If somebody is going to try to paste a person's view on epistemology to me, then give me Thomas Aquinas," who believed that man needs divine help in the pursuit of knowledge. "Don't give me Ayn Rand," he says.

So after all that, Paul Ryan, it seems, has shrugged off Ayn Rand.

Link:
http://news.yahoo.com/paul-ryan-book...-politics.html

Is that the best dirt the left has got on Ryan? Oh ya, they had a look-alike pushing granny off the cliff. It's sad when the Dems cannot run on their own accomplishments -- oh ya, they can't run on 42 months of 8%-plus unemployment, 40+ million on food stamps, ballooning debt + deficit, more + more quant easing.
Carry on.

Back to you, Ray?

Democrats Campaign On Fear, Not Ideas.

Well, it’s not as if Obama can run on his record, huh?

Originally Posted by benbaaa

Just because the trade happened before the meeting, that doesn't mean it wasn't insider trading. Who goes to a meeting not knowing what is on the agenda?

But if it wasn't illegal for politicians to trade on inside information at the time, it's sleazy but nothing else. Same with Pelosi.

I agree the real discovery is already done prior to the committee hearing. The hearing goes through the motions of discovery in a formal public setting.

Ya, Ryan has time to make his own trades. Come on, find the twitter, email, phone call he made to cheat, Ray. Pfft. Another phoney leftie attack.