The lead article on the front page of the WSJ today has the headline "Congress Staffers Gain from Trading in Stocks." It describes how at least 72 Congressional aides used information on pending legislation not generally available to buy stocks in companies whose price was likely to go up once Congress acted. And these were aides who complied with the requirements that they disclose such purchases - who knows how many made the transactions without making a report (or simply passed the information to family members and friends - who made the purchases).
I don't know how one would control that sort of thing other than to get government out of the way of the market generally.
FURTHER REFLECTION: But, really, this is very small potatoes. The information advantage that people in goverment have, especially House members and Senators, information that they can put to economic advantage is enormous. It's mostly a closed information system, of course, and that's where the advantage is. The ones who plainly cheat (cash in the icebox sorts of things) are the really dumb ones. The smart ones know how to take "inside" information and put it to good use, if they have a mind to do that sort of thing.