If ever you have wondered why there was a profound lack of resolve on the behalf of the SEC to prosecute the flagrant illegalities arising from the GFC then you might get a partial clue as to why below.
WSJ….Members of Congress already get better health insurance and retirement benefits than other Americans. They are about to get better insider trading laws as well.
Several academic studies show that the investment portfolios of congressmen and senators consistently outperform stock indices like the Dow and the S&P 500, as well as the portfolios of virtually all professional investors. Congressmen do better to an extent that is statistically significant, according to studies including a 2004 article about “abnormal” Senate returns by Alan J. Ziobrowski, Ping Cheng, James W. Boyd and Brigitte J. Ziobrowski in the Journal of Financial and Qualitative Analysis. The authors published a similar study of the House this year.
Democrats’ portfolios outperform the market by a whopping 9%. Republicans do well, though not quite as well. And the trading is widespread, although a higher percentage of senators than representatives trade—which is not surprising because senators outperform the market by an astonishing 12% on an annual basis.
These results are not due to luck or the financial acumen of elected officials. They can be explained only by insider trading based on the nonpublic information that politicians obtain in the course of their official duties.
The remainder of the article goes onto to look at the inconsistencies between how the law views insider trading for elected officials versus how it applies for everyone else. In addition it examines how proposed changes to the current laws would make insider trading easier for elected officials to get away with.
More importantly I think it in part explains why there is a lack of vigour in prosecuting the multitude of crimes that occurred during the unfolding of the GFC. I accept wholeheartedly the argument that in US politics the real power is with lobbyists and those that direct them. In effect a small proportion of the population (all of whom are unelected) control public policy. Even deeper than this is the subconscious acceptance by elected officials that laws only apply to other people, and other people are by definition not people like them (generally the poor and those that lack influence).
So they accept the criminality of Wall Street not only because of the power and influence it wields but also because they see Wall Street as being the same sort of people as them. Therefore, certain laws do not apply to them. They could not possibly be guilty of criminal acts just as Wall Street could not be guilty of criminal acts.