Politicians and Fed officials aren’t the only ones trading in…

politicians-and-fed-officials-aren’t-the-only-ones-trading-in…




Recently, there has been a lot of strife in the investment industry. Two key Federal Reserve officials have been implicated in shady stock trading, while House Speaker Nancy Pelosi has earned the moniker “Queen of Stonks” as a result of her own and her husband’s trades.

Pelosi made a few stock purchases as part of her employment that could be a conflict of interest, while Fed presidents Eric Rosengren and Robert Kaplan recently announced their resignations after being accused of controversially trading stocks while in office.

According to a Wall Street Journal study, more than 130 federal judges broke the law by hearing cases involving corporations in which they or their families had stock.

The Journal linked financial declarations by approximately 700 federal judges, who indicated holdings in large-cap individual equities, submitted each year from 2010 to 2018, to tens of thousands of court cases.

Judges questioned by the Wall Street Journal stated they were either uninformed of their transgressions or incorrectly believed they were not compelled to remove themselves from the cases.

‘I am mortified’

According to a Wall Street Journal study, more than 130 federal judges broke the law by hearing cases involving corporations in which they or their families had stock.

The Journal linked financial declarations by approximately 700 federal judges, who indicated holdings in large-cap individual equities, submitted each year from 2010 to 2018, to tens of thousands of court cases.

Judges questioned by the Wall Street Journal stated they were either uninformed of their transgressions or incorrectly believed they were not compelled to remove themselves from the cases.

In 2021, Batten claimed he stopped investing in individual companies and switched to mutual funds, which don’t require him to recuse himself.

While considering 18 lawsuits involving one or more of those businesses, Judge Janis Sammartino of California, another Bush appointee, traded in equities such as Bank of America, Deutsche Bank, HSBC, JPMorgan, and Wells Fargo. She heard 54 cases involving a conflict of interest in all.

Sammartino’s representative told the Wall Street Journal that because her investments are stored in a managed account, she doesn’t see how there could be a conflict.

What the Administrative Office of the US Court said

“The Wall Street Journal’s article on cases where disputes were mistakenly overlooked before a case was resolved or moved is concerning, and the Administrative Office is looking into it.”

Key findings:

1. Since 2010, judges selected by practically every president, from Lyndon B. Johnson to Donald Trump, have failed to resign from 685 cases across the United States.

2. About 66 percent of federal judges disclosed their stock interests, with one in every five of them hearing at least one case involving those stocks.

3. 56 judges urged court clerks to notify parties engaged in 329 lawsuits that they should have been recused after being apprised of their infractions. This suggests that new judges may be assigned to the cases, which could have an impact on the outcomes.

4. Approximately 66 percent of the judgements made during their participation in such instances were in favor of personal financial interests.

5. At least one case included a stock in which 129 federal district judges and two federal appellate judges had a vested interest as a plaintiff or defendant.

6. 61 judges or members of their families not only owned or traded stocks in corporations that were plaintiffs or defendants in their cases, but also traded them during the proceedings.

7. Despite the fact that stock valuation is irrelevant under the law, stockholdings totaled more than $15,000 in 173 cases and $50,000 in 21.

8. The infractions violate a key principle of US law established by Congress in 1792: no one should be a judge in their own case.




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