Is Insider Trading Evident in the Transactions of Members of the U.S. House of Representatives, in Their Two Most Heavily Traded Stocks : Apple and Microsoft

In 2012 President Obama signed into law the US Stop Trading On Congressional Knowledge (STOCK) Act to prohibit federal politicians from trading stocks, based on private information, for personal gain with an accompanying provision that they make public their transactions within 45 days of execution. Evidence points to this having the desired impact with politicians now doing no better than a portfolio of randomly selected stocks. This research takes a close look at the two most heavily traded stocks, by politicians: Apple and Microsoft. Findings indicate that the timing of trades does not indicate the use of any inside information that would guarantee substantial gain following a purchase or of selling in time to avoid significant losses, whether measured over the following trading day or five trading days after the execution. However, it should be noted that a significant number of politicians have been found to ignore the provision to make public their stock trades within 45 days, which may indicate that those trading on inside information are the same ones not reporting their transactions