With all the talk about US Representatives and Senators engaging in extremely profitable investments, with the implication that their finances have benefited from inside information.
Well, a researcher at the Centre for Economic Policy Research (CEPR) has run the numbers, and it turns out that it's the senior leadership in Congress that derives the bulk of returns, and it's the leadership of the majority party that benefits the most.
The debate over whether US members of Congress should be allowed to trade individual stocks has become a mainstream policy concern. This column uses data on every US congressional stock trade from 1995 to 2021 to reveal that while rank-and-file members do not systematically beat the market, once some of them assume leadership positions their portfolios start to look very different and outperform those of regular members. The pattern raises uncomfortable questions about how political power, corporate access, and personal wealth interact.
The debate over whether US members of Congress should be allowed to trade individual stocks has moved from a niche ethics topic to a mainstream policy concern. Media investigations have documented pandemic-era sell-offs following closed-door COVID-19 briefings, widespread trading in industries overseen by members’ own committees, and dozens of apparent violations of the 2012 Stop Trading on Congressional Knowledge (STOCK) Act. Against this backdrop, proposals to ban stock trading by lawmakers are gaining traction in Washington. In the latest development, on 2 December 2025, Representative Anna Paulina Luna filed a discharge petition to force a House vote on banning individual stock trading by members of Congress (Hill 2025).Economists have been trying to assess whether legislators’ portfolios actually earn abnormal returns, and if so, why. Early work by Ziobrowski et al. (2004, 2011) suggested that House and Senate members outperformed the market. Later studies reversed the verdict: Eggers and Hainmueller (2013) and Belmont et al. (2022) find that, on average, members would have been better off in index funds. Cherry et al. (2017) highlight that some senators earned significant sell-side gains around key legislative events, while Huang and Xuan (2023) show that abnormal performance largely disappeared after the STOCK Act. Related work on investors documents that access to policymakers can confer an informational advantage in capital markets, as evidenced by Fons-Rosen et al. (2020) on trading related to the 2008 Troubled Asset Relief Program.
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Before entering leadership, future leaders and their matched peers underperform the market by similar amounts. After ascension, however, their trajectories diverge sharply: leaders’ trades outperform those of their matched peers by up to roughly 40–50 percentage points per year. The control group shows no comparable improvement. Calendar-time portfolio regressions using standard factor models confirm that leaders’ daily alphas rise markedly post-ascension, while non-leaders’ alphas remain flat.
This is naked corruption.
H/t naked capitalism










