MONTGOMERY — Alabama Democrats Executive Director Bradley Davidson called on Representative Spencer Bachus to resign as Chairman of the House Financial Services Committee after revelations that Bachus had potentially used his ranking committee member status to profit from the stock market downturn of 2008.
“Congressman Bachus likes to tout his record on ‘protecting investors,’” Davidson said. “But it’s easy to see the only investor he’s interested in protecting is himself. If Bachus wasn’t a Congressman, he’d be under investigation for insider trading right now. But then again, if Bachus wasn’t a Congressman, I doubt he would have been able to make these deals. If only we could all be as lucky as Congressman Bachus.”
According to a recent 60 Minutes report, Bachus would attend closed meetings with Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke on the fragile state of the market, only to turn around — sometimes the next day — and essentially short the market by buying stock options whose value would increase if the stock market collapsed.
Bachus claimed not to have used any private information when making the deals, though at least one profitable trade took place just days after one of the private meetings with Bernanke and Paulson. As a congressman, Bachus is exempt from the laws that would typically govern this kind of insider trading.
“Bachus made tens of thousands of dollars off the information he took from these critical meetings,” Davidson added. “While the rest of us were wondering what would happen to our retirements as the markets dropped, he was making sure he’d make a quick buck when they did. This is absolutely not the kind of leadership we need in Washington, especially not on something as powerful as the finance committee.”