I grew up around people who traded on information. Not illegal insider trading — at least, not technically — but the kind of edge that comes from knowing someone who knows someone, from country club conversations and prep school networks. The kind of advantage that money whispers to money. I always thought that was just how the game worked.
Then I started covering financial crime for The Hairy Times, and I learned what happens when regular people try to play by those same rules.
Here's the uncomfortable truth I'm supposed to ignore because of where I came from: We have a completely broken system where the people making the rules are allowed to profit from inside knowledge, while ordinary Americans get destroyed for doing a fraction of the same thing.
Let me be clear about what we're talking about.
**The Trump Question**
President Trump's investment portfolio raises questions that would make any compliance officer at a legitimate firm break out in hives. The President receives classified intelligence briefings, advance notice of policy decisions, and direct knowledge of regulatory actions before they become public. This is textbook material non-public information — the exact kind that securities law is designed to keep out of trading decisions.
During his first term, Trump placed his assets in a trust controlled by his sons — not a blind trust, which is what ethics experts recommended. Now, in his second term, there's even less pretense of separation. According to public disclosures, the Trump family has maintained significant business and investment interests while residing in the White House.
Could Trump — or anyone in his position — trade on advance knowledge of, say, tariff decisions that will tank certain stocks and boost others? Technically, yes. Would it be legal? That's where things get murky, because presidents exist in a special category of "well, actually…" under current law.
**The Congressional Insider Trading Loophole**
Congress passed the STOCK Act in 2012 after a "60 Minutes" exposé revealed that members of Congress were trading stocks based on non-public information they learned through their official duties. The Act was supposed to fix this. It didn't.
Research from the University of Texas found that senators still outperform the market by significant margins. A 2022 New York Times analysis identified 97 members of Congress or their families who bought or sold stocks that intersected with their congressional work.
Former Senator Richard Burr sold off $1.6 million in stocks in February 2020 after receiving classified coronavirus briefings — right before the market crashed. He got investigated, but faced no criminal charges. Former Senator Kelly Loeffler and her husband, chairman of the New York Stock Exchange, made 29 stock transactions in a single day after a private COVID briefing. No charges.
Senator Tommy Tuberville traded stocks in companies his committees directly oversee. Legal, apparently.
The enforcement of the STOCK Act has been pathetic. The maximum penalty for failing to disclose trades? A $200 fine. I've paid more in parking tickets.
**What Happens to Everyone Else**
Now let me tell you about Kristy Marty, a registered nurse from Georgia. In 2020, she overheard her husband — who worked at a pharmaceutical company — mention that his company's drug trial had failed. She sold her stock in the company before the public announcement. The SEC prosecuted her. She faced potential prison time and significant fines. Her life was turned upside down for making $11,000.
Or take Matthew Panuwat, a scientist at Medivation. When his company was acquired, he bought stock in a competitor, correctly guessing they'd become an acquisition target too. The SEC charged him with insider trading — not for trading his own company's stock, but for using "industry knowledge" to make an educated guess about a different company. He was convicted.
The double standard is so blatant it would be funny if it weren't infuriating.
Martha Stewart served five months in federal prison for insider trading involving less than $50,000 in losses avoided. Meanwhile, members of Congress routinely make millions from suspiciously-timed trades and face no consequences beyond mild Twitter criticism.
**The Real Cost**
Here's what my finance professor at Princeton never mentioned: The stock market is supposed to be a level playing field. Price discovery only works if everyone has access to the same information at the same time. When insiders — whether they're politicians, executives, or well-connected investors — trade on non-public information, they're stealing from everyone else in the market.
Every time a senator dumps stock before a crash they knew was coming, some teacher's pension fund is on the other side of that trade, buying those shares at inflated prices. Every time a president's family profits from advance policy knowledge, regular investors are left holding the bag.
The solution is straightforward: Ban members of Congress and the executive branch from trading individual stocks. Let them hold diversified mutual funds or blind trusts. If that's too much of a sacrifice for "public service," then maybe they're in it for the wrong reasons.
And here's my privilege showing: I know people who would call this naive. Who would say that sophisticated investors will always have an edge, and that's just capitalism. That the little guy should stick to index funds and stop complaining.
But that's exactly the attitude that makes this system rot from the inside. We can't have a market economy built on trust if the people making the rules are the same ones breaking them — while throwing the book at everyone else who tries the same thing.
I was raised to believe that success came from hard work and smart decisions. I'm learning that for too many people at the top, it comes from rigging the game and then prosecuting anyone else who figures out how to play.
The Hairy Times stands for calling this out, even when — especially when — it makes people uncomfortable at the country club.
We deserve better. The system demands it.
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