*Keith Anton
There is a longstanding legal debate that always seemingly thrusts itself into the spotlight during times of hardship: Congressional “insider trading.”[1] During his annual State of the Union address in 2012, President Barack Obama brought the issue to the forefront.[2] President Obama’s comments, in the wake of the Great Recession, led an enthused Senate to bring the Stop Trading On Congressional Knowledge Act (“STOCK Act”) to President Obama’s desk within ten weeks of his address.[3]
At its core, the problem is not a political one. There is a long history of members of Congress using their positions to benefit financially from information only they are privy to, by virtue of their positions.[4] Alleged Congressional “insider trading” is only highlighted by the fact that the Securities and Exchange Commission (“SEC”) has never brought formal insider trading charges against a member of Congress for their behavior in Congress.[5] As a result, the STOCK Act was meant to prohibit members of Congress and the Executive from using non-public information “derived from their official positions for personal benefit, and for other purposes.”[6] However, the STOCK Act was then watered down by a subsequent bill that was passed with little to no fanfare a short time after its enactment.[7]
Congressional “insider trading,” however, has once again been thrusted into the spotlight as recent reports have come to light accusing several Members of Congress using non-public information relayed to them at a Senate Intelligence Committee meeting about the global pandemic, COVID-19, to sell off over a million dollars in stocks.[8] In the past, it has been extremely difficult for members of Congress to be prosecuted for benefiting from non-public information because traditional insider trading law is judge-made and has never fully been resolved.[9] However, the ambiguity that allowed members of Congress to get away with their reprehensible behavior in the wake of the Great Recession no longer exists. The STOCK Act, even its watered-down version, explicitly outlaws the kind of behavior being exhibited by members of Congress throughout these trying times.
The time has come. If the allegations being hurled at members of Congress concerning their selfish actions are true, then every single member of Congress found to have violated the STOCK Act should immediately resign, and they should be prosecuted to the full extent of the law. The truth is, no matter what side of the aisle you find yourself, there is one thing we, as Americans, can all agree on: a member of Congress putting themselves, and their financial well-being, above their country is unbecoming of any elected official.
*J.D. Candidate, May 2020, Florida International University College of Law
[1] Joel Seligman, A Mature Synthesis: O’Hagan Resolves “Insider” Trading’s Most Vexing Problems, 23 Del. J. Corp. L. 1, 2 (1998).
[2] Remarks by the President in State of the Union Address, THE WHITE HOUSE PRESIDENT BARACK OBAMA (Jan. 24, 2012), http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address.
[3] Stop Trading On Congressional Knowledge Act of 2012, Pub. L. No. 112-105, 126 Stat. 291.
[4] PETER SCHWEIZER, Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism that Would Send the Rest of Us to Prison 32 (2011).
[5] The SEC did file a complaint against former U.S. Rep. Christopher Collins, but those charges related to his actions while serving as board member for Innate Immunotherapeutics Ltd.
[6] Stop Trading on Congressional Knowledge Act of 2012, Pub. L. No. 112-105, 126 Stat. 291, 291.
[7] Tamara Keith, How Congress Quietly Overhauled Its Insider-Trading Law, NPR, (March 20, 2020), https://www.npr.org/sections/itsallpolitics/2013/04/16/177496734/how-congress-quietly-overhauled-its-insider-trading-law.
[8] Andrea Vittorio & Jacob Rund, Senators’ Stock Sales Raise Corporate Insider Trading Concern, Bloomberg Law (March 20, 2020), https://news.bloomberglaw.com/corporate-governance/senators-stock-sales-raise-corporate-insider-trading-concern.
[9] Donna M. Nagy, Insider Trading, Congressional Officials, and Duties of Entrustment, 91 B.U. L. Rev. 1105, 1154 (2011).