A federal judge blocked a provision of the STOCK Act, the law passed earlier this year cracking down on insider trading. While the law originally pertained solely to members of Congress and their staffs, House Republicans extended that to members of the executive branch. Judge Alexander Williams gave a preliminary injunction to block enforcement of the executive branch provision.

The judge wrote that the Stop Trading on Congressional Knowledge Act appeared to illegally infringe on federal workers’ right to privacy. The injunction does not, however, affect the law from taking effect for members of Congress and their staffs [...]

Executive-branch employees, represented by the American Civil Liberties Union, argued that posting private information about their real estate investments, retirement funds and stock holdings would violate their privacy. They said the public would have unrestricted access to personal information that could make the government vulnerable to security breaches.

The law went further than just applying the insider trading laws to the executive branch, but would have generated databases that the public could search and download, consisting of personal financial information for executive branch employees.

Meanwhile, regulators continue to crack down on insider trading, which if you looked at the prosecution statistics over the past four years is apparently the only illegality occurring on Wall Street. But the latest investigation is kind of interesting; regulators are looking into the aftermath of a 2008 meeting with then-Treasury Secretary Henry Paulson.

The Securities and Exchange Commission recently sent subpoenas to hedge funds and other firms that were represented at the July 2008 meeting, the people said.

SEC investigators are seeking information on whether Mr. Paulson suggested in the meeting that the government was willing to rescue the struggling mortgage-finance companies Fannie Mae and Freddie Mac, the people said.

The SEC is also looking at whether the firms traded on any information Mr. Paulson had shared, the people added.

Why exactly was the Treasury Secretary holding lunch meetings with hedge fund and private equity managers in the middle of the financial crisis? And why did the government move to send Fannie and Freddie into conservatorship only after that meeting? We don’t have smoking-gun evidence that the hedgies acted on any information from the meeting, but the investigation is ongoing.

It would be nice to see the same kind of diligence that we see against insider trading against, I don’t know, the largest consumer fraud in history, the one in the residential housing market.