Picking Apart Obama's Stock Portfolio

There are no rules for senators prescribed by the Senate Ethics Committee that directly prohibit them from owning shares in companies that deal with the federal government. They are not, however, allowed to trade on information that isn't available to the public, and they are supposed to avoid conflicts of interest between their legislative duties and their personal financial interests.

"The senator was not on the Homeland Security Committee at the time [he made these investments] and has never been an appropriator," says Burton. "The senator has never taken any legislative or official action in order to specifically benefit either one of those companies."

Alex Knott, political editor for the Center for Public Integrity, says that, despite the rules in place, conflicts of interest for elected officials in Congress arise all the time.

"Wall Street and Pennsylvania Avenue connect in so many ways, and lawmakers constantly have the ability to drop earmarks or amendments into legislation that could make a stock on the Nasdaq rise or fall dramatically," says Knott.

To address whatever shortcomings may exist in the rules, lawmakers are required to disclose their personal investment holdings so they can be held up to public scrutiny.

"The best thing for a lawmaker to do is avoid any appearance of a conflict of interest, because they get you in positions that you don't want to be in politically," says Ritsch.