I have on a couple of occasions now laid out the 5-point Congressional Insider Trading Cycle:

Article in financial press about recent apparent insider trading by members of Congress or their staff, which also notes that insider trading by Congress actually falls through the cracks of what is illegal under the law.

Follow-up articles by more mainstream publications expressing shock--shock!--that our esteemed representatives in Washington, DC are not subject to insider trading laws like the rest of us.

Proposed legislation by Rep. Brian Baird (D., Wash.) and Rep. Louise Slaughter (D., N.Y.) called the “Stop Trading on Congressional Knowledge Act” (the STOCK Act) that would explicitly make it illegal for members of Congress and their aides to trade stocks and other securities based on inside information obtained from the legislative process.

Deafening silence and lack of support from the rest of Congress on the STOCK Act lead to the Act going nowhere ( a total of six congressmen supported the most recent iteration of the STOCK Act).

Wait 12 months and repeat entire process.

This cycle has run its course and repeated a couple of times now, and in some ways 2011 looks like more of the same. Indeed, we are already through stages 1, 2 and 3. Despite the retirement of Rep. Baird, the latest iteration of the STOCK Act is again before Congress--this time championed by Minnesota Representative Tim Walz.

Usually, this would be the time for Congress' to commence its deafening silence and disregard of the proposed STOCK Act, and that may still very well end up being the case. This time, however, things feel a bit different.  The 60 Minutes piece on the subject that was broadcast on Sunday (watch it below--it is quite interesting) resulted in follow-up stories in pretty much all of the major newspapers and financial publications, and has prompted at least one call for an SEC investigation.

Beyond that, however, there are other indications that the issue may be generating interest to a far greater degree than in the past, possibly as the result of the presidential and congressional campaigns that are now underway. On November 14, Texas governor and presidential candidate Rick Perry delivered a harsh message to Congress in a video on his website. In short, Perry says that "any congressman or senator that uses their insider knowledge to profit in the stock market ought to be sent to jail. Period. And Congress ought to pass a law that says so right now. No ifs, ands, or buts."  Well done, Governor!!

When Rep. Balz introduced the STOCK Act again earlier this year, some observers such as Melanie Sloan, the executive director of Citizens for Responsibility and Ethics in Washington, predicted it would take a scandal or at least a great deal of embarrassment to force lawmakers to actually act on the issue. Maybe--just maybe--the combination of the excellent 60 Minutes piece and political candidates seeing this as a juicy campaign issue will push the issue of insider trading by Congress to that level.

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