TBH will the regulation change much? If congressmen won't be allow to own stock, they will use proxy (wife, siblings, parents, in-laws).
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I think that if there were a law in place that made it illegal for congressmen to trade, it would be easier to catch insider trading because they would be forced to trade by proxy like you mentioned.
It's really hard to prove someone traded off of insider information if they make a decision to buy/sell for themselves. If they don't tell anyone else why they made the trade, you don't really have any proof that it was made off of material non-public information.
If a congressman is forced to ask someone else to trade for them, they might be careless and you might be able to find evidence via text messages or phone records.
The last time a U.S. Representative got convicted for insider trading, it was because he called his son to tell him to trade a stock that he had insider information on: https://www.justice.gov/usao-sdny/pr/former-congressman-chri...
One thing I've always wondered about this is how to handle circumstantial evidence. Let's say you have a relative who may have insider information on a stock. You talk sometimes but not regularly. They call you (as they occasionally do) the day before you trade a stock and it performs favorably within a short time period.
Are you now in a position where you have to prove a negative? Are there people in prison right now because of exactly this type of occurrence, or is it so circumstantial that it's not even pursued unless there is additional evidence, e.g. you always buy $500-1k in stock but after this call you buy $10k in options or something.
According to one of my finance professors in university, it's somewhat tough to actually get convicted for insider trading, and there are certain circles where everyone does it.
The people who do get convicted are usually those who were being particularly egregious or who pissed someone off enough to rat them out. For example, Martha Stewart got convicted because her assistant (whom she regularly called a "little shit") decided to testify against her.
People respond to incentives. If you make something harder, people will do less of it.
New barriers include: the actual work of moving money around to and from friends and family and directing trades, counterparty risks in doing so (e.g. sibling dies and leaves money to someone else or takes the money and runs), tax complications, or reputational risk if found to be violating "spirit of the law" that might harm election odds. There are surely more frictions and barriers like these that I'm not capturing.
SEC regulations generally apply equally to family members you make financial decisions for. You can still probably get away with it but the SEC has ammo if you get brazen.
Aka pulling a John Kerry
https://wibc.com/154888/climate-czar-john-kerry-throws-wife-....
Kerry's wife, Theresa Heinz is estimated to have net worth of $750m or more. Is it really a stretch to think that she might be the one who owns the private jet?
Thats not the point at all lol. (Also, why should normal folks have to keep track of how much his wife has?)
The point is repeatedly emphasizing that "personally" he doesn't have a plane meanwhile repeatedly using his wife's plane while being the "Special Presidential Envoy for Climate".
https://www.usglc.org/positions/special-presidential-envoy-f...