Wall Street Journal: After Amazon HQ2, Uproar in New York Over Real Estate ‘Insider Trading’

Amazon.com Inc.’s deal for a second headquarters in Long Island City, N.Y., has prompted a state senator to draft legislation that would prohibit the buying or selling of real estate based on any nonpublic government action.

Sen. Michael Gianaris, a Democrat who represents Long Island City, is drafting the proposed law. It would make such real-estate transactions a felony punishable by up to four years in prison.

The proposal follows a Wall Street Journal article about Amazon employees who went shopping for condos in Long Island City shortly before the giant retailer announced plans to open a new headquarters there, which immediately drove up residential demand and prices. The employees are now under contract to buy, brokers said.

The new New York law would be similar to federal securities law that bars an individual from purchasing stock in a company based on nonpublic information.

“Insider trading is illegal in the stock market but in real estate it is not only legal, but celebrated with champagne,” said real-estate attorney Adam Leitman Bailey.

Read more: https://on.wsj.com/2QbCMKq