US Rep. Spencer Bachus, R-Ala., a banking-industry apologist who currently heads the US House of Representatives banking committee, faces a congressional investigation into possible insider trading, the Washington Post reports here. Excerpt:
"On Sept. 18, 2008, at the height of the economic meltdown, Bachus participated in a closed-door briefing with then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben S. Bernanke.
"At the time, he was the highest-ranking Republican member of the Financial Services Committee. According to a book Paulson would later write, the topic of the meeting was the high likelihood of decline across the entire economy if drastic steps were not taken.
"The next day, Sept. 19, Bachus traded “short” options, betting on a broad decline in the nation’s financial markets, and collected a profit of $5,715. Also that day, he cashed out options in which he had bet that General Electric [a major consumer and commercial finance lender at the time] stock would rise, and collected a $12,713 profit, before GE’s stock price started to tumble, The Post found...
In a letter to the publisher, Bachus "said there was no inside information provided in the briefing by Paulson and Bernanke: 'The idea that I or anyone else needed this meeting to know our financial markets were in trouble is just laughable.'" Bachus added, "You would have to be living under a rock not to know by September 18, 2008 that the economy was in bad shape.”
-- Earlier: "Pennsylvania Sen. Arlen Specter dabbles in Boeing, Comcast, Microsoft shares" after meeting with company executives in connection with Congressional business. My story from 2004.