Congressional Insider Trading Still Widespread

At least 40 Members violated the law on reporting stock transactions.

A paywalled Business Insider story cited by Taegan Goddard reports that Rep. Mo Brooks (R-AL) “was about a month late in disclosing that he sold up to $50,000 worth of stock in the pharmaceutical company Pfizer — despite criticizing the COVID-19 vaccine manufacturer and bashing mandates for people to get a coronavirus vaccine.” Thus far, no one else seems to have the story. Frances Langum cites the same report and notes that Brooks’ wife claims to do all of the stock trading in the household and, rightly, sees that as problematic even if we take her word for it.

Without more information, I don’t have a lot of commentary to add about Brooks in particular, although his support for the insurrection inclines me to grant him little benefit of the doubt. Regardless, I agree with Langum that it’s long past time to prohibit Members of Congress—and any other public official with insider knowledge—from owning individual stocks. Disclosure is simply not enough.

But, of course, enforcing any such law is a challenge. A not-paywalled BI report notes that “40 members of Congress have violated a law designed to stop insider trading and prevent conflicts-of-interest.”

Insider and several other news organizations have this year identified 40 members of Congress who’ve failed to properly report their financial trades as mandated by the Stop Trading on Congressional Knowledge Act of 2012, also known as the STOCK Act.

Congress passed the law in 2012 to combat insider trading and conflicts of interest among their own members and force lawmakers to be more transparent about their personal financial dealings. A key provision of the law mandates that lawmakers publicly — and quickly — disclose any stock trade made by themselves, a spouse, or a dependent child.

But many members of Congress have not fully complied with the law. They offer excuses including ignorance of the law, clerical errors, and mistakes by an accountant.

While lawmakers who violate the STOCK Act face a fine, the penalty is usually small — $200 is the standard amount — or waived by House or Senate ethics officials. Ethics watchdogs and even some members of Congress have called for stricter penalties or even a ban on federal lawmakers from trading individual stocks, although neither has come to pass.

Dianne Feinstein, Tommy Tuberville, Rand Paul, Mark Kelly, Dan Krenshaw, and Debbie Wasserman Schultz join Brooks as among the most famous of the 40. Granting that this is less than 8 percent of the 535 combined membership of the House and Senate, these are just the ones who have gotten caught. And those who make our laws should certainly be expected to live by them.

FILED UNDER: Congress, Law and the Courts
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Sleeping Dog says:

    It’s no wonder that congress critters who enter government in the 80th percentile of income and wealth, quickly move up to the 90th, with many reaching the 1%.

    Thieves and liars. Prosecute them!

    6
  2. OzarkHillbilly says:

    And those who make our laws should certainly be expected to live by them.

    If only. And as long as they are policing themselves, we can expect nothing to change.

    9
  3. CSK says:

    Require all members of Congress to set up blind trusts.

    Prof. J, I think it’s Crenshaw, not Krenshaw.

  4. Scott F. says:

    And those who make our laws should certainly be expected to live by them.

    When lawmakers can openly support sedition only to be met with tut-tuts, this notion of equal treatment under the law seems almost quaint.

    6
  5. gVOR08 says:

    @CSK:

    Require all members of Congress to set up blind trusts.

    During the W administration there was a small news story that Dick Cheney had directed his blind trust to sell a specific stock. The story was about the implications of the stock sale, speculation as to what might be happening that Cheney knew about. The story didn’t express outrage, or even surprise, that Cheney knew his blind trust owned the stock.

    And this sort of thing is penny-ante. The real scandal of money in politics is lying just below the surface of James’ earlier post about Biden settling for a smaller package. Sinema and Manchin and many of the House moderates are servicing their donors, everybody knows it, and no one wants to quite clearly say so.

    5
  6. Gustopher says:

    While lawmakers who violate the STOCK Act face a fine, the penalty is usually small — $200 is the standard amount — or waived by House or Senate ethics officials. Ethics watchdogs and even some members of Congress have called for stricter penalties

    Typically, we start get harsher penalties when Blacks start committing crimes, so I am calling on the Congressional Black Caucus to help America and help themselves.

    5
  7. John430 says:

    @gVOR08: You conveniently left out Biden & Son, Inc. having a joint account for Biden, Jr’s influence-pedaling and phony art sales businesses.

    2
  8. HarvardLaw92 says:

    I’d settle for requiring them to assign power of attorney over their investment assets (and the management thereof) to a professional management firm and give them a tax credit for the fees incurred as a result. In any case, they’d basically have to agree to impose these limitations on themselves, which is why it’ll never happen.

    6
  9. Mu Yixiao says:

    A little while ago I read a story about an investor who just reads the disclosure reports and buys/sells whatever he sees on them. He’s doing very well. Apparently Pelosi is a real money-maker.

    1
  10. Daryl and his brother Darryl says:

    @John430:
    Is there a conspiracy theory that you won’t repeat like a good little parrot?

    4
  11. Daryl and his brother Darryl says:

    In the same vein…
    https://twitter.com/donwinslow/status/1450205030393413634
    Enough to make your blood boil.

  12. gVOR08 says:

    Apropos my earlier comment, @gVOR08:, on donor service, per CNBC,

    The libertarian-leaning Koch network spent over $300,000 (last quarter) lobbying Congress to oppose pieces of Joe Biden’s agenda while moving to support some Democratic backed bills.

  13. Gustopher says:

    @John430: I’m pretty sure that 50% of the price of Hunter Biden’s artwork is generated by the right wing hate machine pumping up his name every chance they get.

    Most people forget about Hunter Biden’s existence within about a day of hearing about him.

    3
  14. Tony W says:

    I keep forgetting which office in the White House Hunter is occupying?

    Wait, was he the one negotiating a middle east peace treaty, or the one with all of those Chinese patents?

    4
  15. Kathy says:

    @Gustopher:

    Have you thought maybe Hunter pays a commission to the unhinged media in order to keep interest in his “art” up? 😀

    2
  16. HarvardLaw92 says:

    @Mu Yixiao:

    Her husband is. Always has been.

    1