Dick Durbin, the Senate's No. 2 Democrat, reportedly sold more than $115,000 worth of stocks and mutual-fund shares on Sept. 19 and used much of the money to invest in Warren Buffett's Berkshire Hathaway Inc. The twist, according to Bloomberg, is that he did so "the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks."

Durbin's spokesman told Bloomberg that Durbin did not engage in any "insider trading" based on what he learned from Paulson and Bernanke at the Sept. 18 meeting, and that the information Paulson gave lawmakers wasn't secret and was disclosed publicly the next day.

The bottom line? Legally, it really doesn't appear to matter one bit because as we've discussed here in detail ("Closing the Congressional Insider Trading Loophole"), there is no such thing as insider trading by Congress:

Notably, and to the surprise of most people, no laws or regulations prohibit members of Congress (or their friends, staff, neighbors, or other acquaintances) from trading freely on such material, non-public information about a public company.

Indeed, members of Congress and their staff currently do not owe any “duty of confidentiality” to Congress and can’t be held liable for insider trading based on congressional knowledge under the current laws. Nor is there anything at this time that would prohibit Congressional staffers and executive branch employees from sharing inside information obtained from Congress with their friends—potentially allowing the recipients of such information to use it to make huge trading profits or prevent big losses. That means trading on inside knowledge of upcoming Congressional action is today one of the few forms of legal, repeatable insider trading....

So trade away, Senator!