TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, August 17, 2018

Whistleblower Accuses IRS Of Tipping Off Members Of Congress In Insider Trading Ring

New York Post, Whistleblower Makes Shocking IRS, Insider Trading Allegations:

A whistleblower made this shocking allegation to me last week: the IRS was tipping off members of Congress to corporate takeovers so the elected officials could profit from insider trading.

My snitch also charged that higher-level employees of the IRS also used that information to enrich themselves.

This may sound crazy but remember: Up until a few years ago members of Congress were allowed to trade stock based on information they got while performing their public duties.

It wasn’t until 2012, during President Obama’s tenure, that the practice was banned.

But the difference between what had been going on legally until 2012 and what my whistleblower is contending is enormous.

Everyone assumed that members of Congress were just profiting from things they happened to learn while working on their committees — that a drug was going to get turned down by the FDA, for instance, or that a company was sniffing around to see how regulators would feel about a merger.

That was bad enough!

What the whistleblower alleges goes well beyond that and is, quite frankly, freakin’

“Back in 2003-5 a memo was created within the IRS noting who was permitted to participate in ‘insider trading’,” says this whistleblower. “The memo noted that all IRS employees in the executive branch and those one step below (territory managers, etc.) were permitted to participate.”

http://taxprof.typepad.com/taxprof_blog/2018/08/whistleblower-accuses-irs-of-tipping-off-members-of-congress-in-insider-trading-ring.html

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Comments

People go to congress as thousandaires, and they return as millionaires.

Posted by: Andy | Aug 17, 2018 6:34:42 AM

I'd like to be surprised, but there has to be an explanation for how Senators in particular came to be members of the millionaires' club on government salaries.

Posted by: LAG | Aug 17, 2018 6:47:43 AM

If this is true, why isn't Martha Stewart suing to overturn her conviction? If, (ha) the government is actually doing things we go to jail for we are living in the last generation where we can change this.

Posted by: Mark Robbins | Aug 17, 2018 11:24:03 AM

If this is true, time for drastic actin. The corrupt politicians should be prosecuted to the fullest extent of the law. The laws should change so that Congress can only invest in blind trusts and penalties for insider trading should be stronger. Unfortunately, since Congress makes the laws, it's not likely such laws and penalties will ever be changed.

Posted by: DS | Aug 18, 2018 7:23:13 PM

I’m not surprised!

Posted by: Jim | Aug 19, 2018 12:05:02 PM

Shawn Hannity reported on this years ago and I thought or was under the impression laws were enacted outlawing this perk in government?

Posted by: Patrick Plesko | Aug 19, 2018 12:05:10 PM

Is that how obama left as a multi millionaire on a civil servants salary

Posted by: june Burgess | Aug 19, 2018 12:37:27 PM

Scum is as scum does.

Posted by: arschloch | Aug 19, 2018 1:32:57 PM

I am the 'author'. Your reader is an 'editor'. Editors are people who know usage, spelling, etc. but have no knowledge of content. Moderation is not required so trash the comment like all other hacks.

Posted by: arschloch | Aug 19, 2018 1:36:30 PM

Once a thief, always a thief.

Posted by: Una Greene | Aug 20, 2018 8:09:19 AM