15 ms·

Federal judges or their brokers traded stocks of litigants during cases

181 points by colinprince 5y ago

ramesh31 5y ago
The US needs a blanket federal law, perhaps even a constitutional amendment, that precludes any publicly elected official or appointee at any level from directly owning individual stocks. How could anyone possibly argue against that?
- noja 5y ago
  Why make it so confined? Do not allow them to profit from their position.
- lisper 5y ago
  I can think of at least three plausible counter-arguments: 1. That's overly restrictive. Why not let them own individual stocks in, say, a blind trust? 2. It's a free country. It's up to the voters to decide if they want to elect someone who profits from their position. What is needed is a law requiring public disclosure, not prohibition. 3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve. This is not to say that I disagree with the policy position, only that it's not the slam-dunk you seem to think it is.
  - ramesh31 5y ago
    >If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve. Dissuading the wealthy from seeking office sounds like a feature, not a bug to me.
    - unmole 5y ago
      > Dissuading the wealthy from seeking office sounds like a feature, not a bug to me. Around 55% of Americans own stock.
      - murphyslab 5y ago
        "The wealthiest 10% of Americans own a record 89% of all U.S. stocks" — CNBC https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-americans-own-a-record-89percent-of-all-us-stocks.html https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-... If you aren't one of that "wealthiest 10%" it would not be difficult to divest your stock holdings in exchange for an index fund.
        PeterisP 5y ago
        I would presume that almost everyone qualified to be a federal judge to be among the wealthiest 10% - the median lawyer income is approximately 90-th percentile, and I would presume that the seniority and skills needed for such a position would disqualify most of the less experienced and/or weaker lawyers.
        DFHippie 5y ago
        Income is not the same as wealth. They are correlated, but you're blurring lines. The wealthiest individuals accrue a negligible amount of their wealth from income. And the power law relationship between wealth and stock ownership doesn't end when you cross the 90th percentile either.
      - mattficke 5y ago
        That includes things like index funds. The vast majority of people do not own individual equities.
  - Broken_Hippo 5y ago
    1. There is no way for a fairly normal person working a fairly normal job (probably service industry) to verify any of the blind trust stuff and past politicians have helped make a mockery of the whole thing. To be fair, though, there are other ways. You can reform things so that there are minimum holding times for stocks alongside rules that make selling stocks take more time. If you need to hold onto the stocks for 6 weeks after you say you want to sell, you are going to have a harder time selling. You can also restrict times officials can sell. 2. Again, how is a normal person - say, a retail employee - ever going to find out about this? Even with public disclosure, all folks need to do to hide their doings is to make the language in the disclosure full of technical jargon instead of everyday language. 3. That's a bonus, not a feature. Maybe it'll encourage normal folks to take office more often - but of course, we'd have to do other changes to make that happen.
  - RandomLensman 5y ago
    A lot of high-powered jobs come with strong restrictions and controls around stock ownership/trading. Does not seem to dissuade people from pursuing careers in banking or strategy consulting, for example. They are not blanket total bans in most cases, but single name stuff is often very restricted, broad market less so. Also does come with transparency requirements.
  - csee 5y ago
    2. Think of it like term limits. We don't let people sit in office forever just because it's a free country. No, these are constraints implemented democratically by voters to protect against bad outcomes that aren't well addressed by future direct voting. 3. You would reduce the pool of people who have corrupt intent. Owning individual stocks isn't more profitable than owning ETFs.
    - sokoloff 5y ago
      Owning individual stocks (even temporarily or unvested) is a substantial fraction of compensation of many people that I want to be able to participate in local politics.
      - csee 5y ago
        Owning individual stocks is the same expected value than owning ETFs for almost all retail investors who are non-corrupt. Studies have looked at this and shown that regular investors in single stocks consistently underperform. So there's no real financial reason (in expectation terms) to do so unless they have corrupt intent. Of course someone that just got rich off NIO or GME probably differs but that doesn't speak to expected value which is all that matters for decision making.
        sokoloff 5y ago
        Many FAANG(-N) employees receive more in compensation in the form of shares of an individual company than they do in cash. I don’t want to force them to quit their job (or cut their comp by more than 50%) if they want to contribute in local politics. If this were broadly adopted, companies would be forced to switch to all-cash offers, to create long-term incentive plans that don’t use something the legislation defines as shares, or just be content to exclude politically active people from being employees. Some might be happy with that last outcome.
        DFHippie 5y ago
        The original phrasing wasn't "contribute in local politics" but "take public office". Presumably if you take public office you give up your FAANG employment. I don't think anyone is saying you can't vote or petition government for the redress of grievances if you own individual stocks.
  - actually_a_dog 5y ago
    Well... 1. Too bad. There are plenty of other good investments out there. 2. Too bad. The removal of incentives to do slimy things like the ones that are subject of this article is the greater good here. 3. Too bad. Maybe those people who choose to serve will be those who aren't in it to fleece the system of every dollar they can. I'm not sure you'd find my "counterarguments" any more persuasive than I find yours. I'm more interested in what the systemic consequences of such a policy would be, and, it seems to me that they tip in a direction that removes incentives to be corrupt, which sounds pretty darn good to me. I care a lot less about the effects on people who are currently in the position to exploit the system.
  - hellbannedguy 5y ago
    "3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve." Great! America needs politicians whom are not wealthy boys, and girls.
- systemvoltage 5y ago
  One argument that I can think of is talented people will instead gravitate towards private industry and are disincentivzed to become public servants. Not owning invidual stock can be common shares is pretty broad. Or otherwise we would have to define what class of investment instrument should be banned. Do we also prevent buying private company shares? What about other financial derivates such as options and futures where you technically don't own the underlying stock? Do we limit real estate investments as well? If they earn a salary, where could they invest their savings? If we allow real estate investment, then public servants (1.8M US Citizens) would blow up the real estate market. There are so many secondary and tertiary effects, that would have major consequences to the economy and the functioning of the government. Not allowing any investment opportunity means they would sucuumb to the inflation rate and cannot retire.
  - irrational 5y ago
    Have you even seen the kind of people who become public “servants”? Who exactly would you classify as talented?
    - markvdb 5y ago
      Both my bosses. They each head a public art academy. Both are incredibly talented, motivated people. They serve the public as best as they can. The same goes for several of my colleagues.
    - lazyasciiart 5y ago
      My father, my grandfather, my brother, many of my friends...
      - irrational 5y ago
        Uh, Trump is a father, grandfather, brother, friend (?), to people. That doesn’t really prove that someone is talented.
        lazyasciiart 5y ago
- m0zg 5y ago
  Guess who writes the laws? People who are neck deep in insider trading to the point where the speaker of the House outperforms some of the best performing hedge funds. Don't hold your breath on this one. And the law would need to be signed by a dude whose son "sells art" for $75K apiece and takes jobs he himself admits are only offered to him because he has the right last name. And finally, if by miracle such a law were to be passed and signed, to enforce it you'd need to go to a judge who's also corrupt as fuck and trading stocks from the bench, and whose mortgage on his third beach home would be jeopardized if he was to agree with you. It's rotten all the way through now.
  - NicoJuicy 5y ago
    The husband of the person you mentioned was already well off before she was in politics. Better yet, it was because her husband success that she worked for 20 years for free for the party.
    - m0zg 5y ago
      He's much better off now. A genius grade trader. It's a goddamn miracle. Warren Buffet doesn't even come close to such prowess. What's funny is everyone knows these are pretty damning facts that are not good for the country in the long term. And yet my posts will be flagged anyway.
      - craftinator 5y ago
        Not only unhinged, but whiney too. A true Renaissance man!
      - NicoJuicy 5y ago
        Waren Buffet doesn't even invest in tech. Something her husband did before she was speaker and he already had much success before.
        m0zg 5y ago
        He does. Berkshire owns a ton of Apple (114 billion dollars worth) and some other tech/pharma companies. But hey, if you think insider trading is so wonderful and ethical, let's make it "fine" for everyone and abolish stock trading windows at major corporations, as well as restrictions on execs. Why should only congresspeople be able to partake?
- markvdb 5y ago
  As others have said, a blanket stocks prohibition might make the public sector uncompetitive. Blind trusts seem to be quite a bit too permissive to me. Offer them the performance of a stock index fund on their stock holdings, for the duration of their public mandate.
- mchusma 5y ago
  No business owner could be in office? Like someone who owned stock for 20 years with no plans to sell couldn't run? Seems harsh. I think limited trading is what you mean (buying and selling). Insiders at companies have limited windows to trade. Makes more sense.
- topspin 5y ago
  > How could anyone possibly argue against that? Arguing against that is easy. The elite have so many better ways to profit from their positions that outlawing stock ownership is laughably naïve. Trading stocks against knowledge you obtained from your government position is an easy way to get busted, so you may assume the people caught up in this represent merely the profoundly stupid; the smart elites don't get nabbed in such simple minded schemes. Yes, there are very stupid federal judges; their appointments are a product a political haymaking that has their actual competence way down the list of priorities. So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. If you're serious about meaningful efforts to hinder corruption think in terms of transparency. Give the electorate the means to know who is bought and paid for by whom. Without that you're wasting your time.
  - DFHippie 5y ago
    > So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. Time is a pretty small consideration here. One can and should apply many means to lessen corruption. Transparency is certainly important, but no means is going to cover all cases or be 100% effective. Reduce the possibility of conflict of interest and increase transparency. The problem with transparency, if you're relying on democracy to do the rest, is that any sufficiently clever corruption scheme is simply not going to be understood by the public you're relying on to oppose it. If you give them an explanation in detail they mostly see simply that it's detailed. It looks no different from a conspiracy theory to most people, who will barely be following the issue anyway. Most voters are low information voters. The information they need is which party backs which position. They in effect vote as they're told, not because they're stupid but because none of this interests them.
- dataflow 5y ago
  Ban trades while they have the position, not ownership. If they had it long before they got the position they shouldn't have to sell it just for the sake of serving the country.
- elvischidera 5y ago
  Naive question: If you preclude a politician from owning stocks, can't they execute such trades via an off-the-radar friend? And receive profits via "gifts". I imagine this is already illegal? But isn't it harder to prove if done right?
- sokoloff 5y ago
  I don’t need the local dog catcher to be blocked from owning shares in Apple if they want to. I don’t want my local Google employees to be prohibited from running for city council or school committee.
- indymike 5y ago
  > How could anyone possibly argue against that? The very basis of self government (citizens being in charge) is allowing people to run for office who are every day people. This idea would require anyone who is even a part owner af a tiny business to divest in order to run. Additionally, a lot of common small businesses have no real value if the owner doesn't come with the business (a solo law practice is an example)... oh, and trusts are corporations... so this idea sounds wonderful but is very exclusionary.
- Consultant32452 5y ago
  If we just get the people who write and enforce the laws to pass a law that stops them from being corrupt the corruption will end.
- closeparen 5y ago
  Just as soon as we prohibit homeowners from serving in local governments.
lordnacho 5y ago
The real problem is you have a culture where people think the law is the edge of what is acceptable. Whether it is legal or not, I would not be punting on stocks that I was a judge for, it simply stinks and shouldn't be done. There's probably a lot of things that are formally legal but corrosive to society.
- lend000 5y ago
  It's nice to be able to blame something on a culture, but the reality is that some percentage of people are somewhere on the spectrum of morality where they are prone to doing this. I don't imagine judges are a particularly amoral group, despite being lawyers, but politicians certainly are. I'm always dumbfounded when people want to give politicians more power.
  - lixtra 5y ago
    >> think the law is the edge of what is acceptable. > particularly amoral group, > but politicians certainly are. To be fair, if all politicians were always morally rooted in the center of the law, nothing would ever change. No marijuana, no gay marriage. Or more appropriate: There’s a certain overlap of laws (and constitutional rights) that blur the edge of law (here: pursuit of happiness for the judge’s vs. corruption of justice).
- MrBuddyCasino 5y ago
  > There's probably a lot of things that are formally legal but corrosive to society. Plus the process of corruption is slow and creeping. A generation doesn't know whats it like growing up a generation or two before, so the current state of affairs is taken for granted. At some point, the idea of a high-trust society where people don't need to lock their doors and children can just roam the neighbourhood freely becomes a faint memory and unreal utopia. Starting a family in their twenties, the prospect of home ownership, and being able to do so on a single income has already become unimaginable.
  - sokoloff 5y ago
    The latter is not unimaginable to (and done regularly by) millions of people living in lower cost areas of the country.
Jerry2 5y ago
Everything's corrupted. Pretty much every branch of government is rife with corruption. Even the enforcement is corrupt. Money has infiltrated everything and justice is now truly blind. And if by some miracle you're tried and found guilty, you can even buy your way out of serving any time and you can even buy a presidential pardon and have your crime expunged. If you're rich, vast majority of laws simply don't apply to you. Yet there's so many laws on books and many of those laws are so vague that an average person commits several felonies every day. [1] [1] https://www.wsj.com/articles/SB10001424052748704471504574438900830760842 https://www.wsj.com/articles/SB10001424052748704471504574438...
- grecy 5y ago
  > Money has infiltrated everything Worse, money is protected speech, and using it to buy influence is protected by the law!
  - EastOfTruth 5y ago
    bribes/lobbying should be illegal... please get a referendum going on this subject
    - jimktrains2 5y ago
      Why do you want to make it illegal for me to contact my representative and voice my opinion on upcoming legislation -- that's also lobbying.
      - FpUser 5y ago
        As long as id does not involve money direct or indirect between "lobbyist" and the official sure go and convince your rep. Just do not promise cushy job later or for relatives or any other creative ways to buy your politicians.
    - grecy 5y ago
      The challenge that the USA faces is the people who have the power to change it are the very ones who benefit the most from it. There are MANY established institutions in the USA that will fight tooth and nail not to change, because the established players are getting exceedingly rich the way things are now, to the detriment of everyone else.
tzs 5y ago
How about treating judges and legislators as if they were insiders of every public company and applying Section 16 of the Securities Exchange Act of 1934 to them? Section 16 currently applies to officers, directors, and anyone who holds 10% of the stock of a company. These people have to disclose all of their trades, and they are not allowed to make any profitable "short-swing" trades in the stock. A trade is a short-swing trade if it occurs within 6 months of a trade in the opposite direction. Section 16 is brilliant in how it is enforced. It allows any shareholder to sue the short-swing trader. The plaintiff does not have to have been a shareholder at the time of the trade. They only have to be a shareholder at the time of the suit. If the plaintiff wins the trader has to return all short-swing profits to the company and pay the plaintiff's attorney fees. Because the people covered by Section 16 have to report their trades, and because there isn't really a defense for short-swing trading, it is an open and shut case. The data is available from the SEC in electronic form, and there are lawyers who get it and do automated checks to find short-swing trades. Then it is an easy matter for them to buy a share if they don't already have one, sue the short-swing trader, trivially win the open and shut case, and collect attorney fees. If that wasn't enough to discourage insiders from short-swing trading, Section 16 provides more discouragement by being brutal in how it defines profit from a short-swing trade. Consider this sequence of trades by a Section 16 insider: Jan 1: buy N shares at $100/share Feb 1: sell N shares at $90/share Mar 1: buy N shares at $80/share Apr 1: sell N shares at $70/share The person is clearly a terrible trader. That sequence of trades has lost them $20/share. But Section 16 doesn't look at the overall results. It just looks it individual trades and tries to match them with individual trades going the other way within 6 months (before or after) and if the sell is higher than the buy that is short-swing profit. Section 16 sees the above trades as a short-swing profit of $10 x N from the purchase on Mar 1 and the sale on Feb 1. The net result then for the insider who made those ill conceived trades is that they lose $20/share on the trades themselves, and they end up having to pay an additional $10/share to the company, and pay the attorney fees of whoever managed to file first to sue them.
- nerdponx 5y ago
  I love this idea.
- Consultant32452 5y ago
h2odragon 5y ago
They do this whole ritual about Jury Selection, you can't be a Juror if you've got family in law enforcement, etc etc. Could we have a Jury, once assembled, apply those same rules tot he rest of the Court? "Your Honor have you ever held ownership in the companies involved in this case? Ever been married or intimate with any of the parties in this case?"
- colejohnson66 5y ago
  There are ethics laws for lawyers and judges. The problem is: the enforcer of those ethics laws are partially the judges themselves. It’s the same issue with cops breaking the law; cops don’t rat on/arrest other cops.
  - h2odragon 5y ago
    It seems like we have a lot of social problems like that; we have laws about them, but the enforcement became spotty somehow... Some people can start an online bank, or have a "taxi app"; and it's OK; but everyone else has the laws against it enforced. Perhaps some of the conspiracy theorists talking about the undermining of the prosecutor and court systems since the 90's have been onto something.
  - MichaelZuo 5y ago
    Surely superior judges make the decisions relating to inferior judges? It’s hard to believe judges at the same level in the hierarchy are making those decisions for themselves in any capacity.
aomobile 5y ago
Needs to be regulated Asap. Corruption is cancer.
web2sucks 5y ago
This is why small government is so important.
- deleted 5y ago
  [deleted]
- adrr 5y ago
  Small government isn’t immune from corruption. City level has some of the worst corruption.
tonmoy 5y ago
Technically these judges should have recused themselves, but is it really a big deal that the judges (or their families) had financial advisors or stock brokers held shares in companies they were probably not even aware of was a defendant? The real question would be how much did these judges make by buying or selling those stocks during the cases compared to rest of their portfolio. I would imagine it’d be negligible
harry8 5y ago
Matt Levine has noted in modern America everything is securities fraud; the most egregious of crimes are being prosecuted as securities fraud rather than whatever the actual crime was. How does security fraud apply to this? Or is that why it happens? You can't point to a "shareholder loss" and all other stakeholders in the company, the legal system and society don't get enforcement when they are the victims of this kind of crime? The company can't be held responsible if a corrupt judge acts corruptly (or impersonates someone who is corrupt displaying a stupidity that should bar them from any position of responsibility), if that judge did not involve the company directly in that corruption.
stevespang 5y ago
Title should be: OBVIOUS CORRUPTION: Federal Judges or Their Brokers Traded Stocks of Litigants During Cases
heythere22 5y ago
https://archive.md/j7Tkh https://archive.md/j7Tkh

181 points by colinprince 5y ago

The US needs a blanket federal law, perhaps even a constitutional amendment, that precludes any publicly elected official or appointee at any level from directly owning individual stocks. How could anyone possibly argue against that?

noja 5y ago
Why make it so confined? Do not allow them to profit from their position.
lisper 5y ago
I can think of at least three plausible counter-arguments: 1. That's overly restrictive. Why not let them own individual stocks in, say, a blind trust? 2. It's a free country. It's up to the voters to decide if they want to elect someone who profits from their position. What is needed is a law requiring public disclosure, not prohibition. 3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve. This is not to say that I disagree with the policy position, only that it's not the slam-dunk you seem to think it is.
- ramesh31 5y ago
  >If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve. Dissuading the wealthy from seeking office sounds like a feature, not a bug to me.
  - unmole 5y ago
    > Dissuading the wealthy from seeking office sounds like a feature, not a bug to me. Around 55% of Americans own stock.
    - murphyslab 5y ago
      "The wealthiest 10% of Americans own a record 89% of all U.S. stocks" — CNBC https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-americans-own-a-record-89percent-of-all-us-stocks.html https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-... If you aren't one of that "wealthiest 10%" it would not be difficult to divest your stock holdings in exchange for an index fund.
      - PeterisP 5y ago
        I would presume that almost everyone qualified to be a federal judge to be among the wealthiest 10% - the median lawyer income is approximately 90-th percentile, and I would presume that the seniority and skills needed for such a position would disqualify most of the less experienced and/or weaker lawyers.
        DFHippie 5y ago
        Income is not the same as wealth. They are correlated, but you're blurring lines. The wealthiest individuals accrue a negligible amount of their wealth from income. And the power law relationship between wealth and stock ownership doesn't end when you cross the 90th percentile either.
    - mattficke 5y ago
      That includes things like index funds. The vast majority of people do not own individual equities.
- Broken_Hippo 5y ago
  1. There is no way for a fairly normal person working a fairly normal job (probably service industry) to verify any of the blind trust stuff and past politicians have helped make a mockery of the whole thing. To be fair, though, there are other ways. You can reform things so that there are minimum holding times for stocks alongside rules that make selling stocks take more time. If you need to hold onto the stocks for 6 weeks after you say you want to sell, you are going to have a harder time selling. You can also restrict times officials can sell. 2. Again, how is a normal person - say, a retail employee - ever going to find out about this? Even with public disclosure, all folks need to do to hide their doings is to make the language in the disclosure full of technical jargon instead of everyday language. 3. That's a bonus, not a feature. Maybe it'll encourage normal folks to take office more often - but of course, we'd have to do other changes to make that happen.
- RandomLensman 5y ago
  A lot of high-powered jobs come with strong restrictions and controls around stock ownership/trading. Does not seem to dissuade people from pursuing careers in banking or strategy consulting, for example. They are not blanket total bans in most cases, but single name stuff is often very restricted, broad market less so. Also does come with transparency requirements.
- csee 5y ago
  2. Think of it like term limits. We don't let people sit in office forever just because it's a free country. No, these are constraints implemented democratically by voters to protect against bad outcomes that aren't well addressed by future direct voting. 3. You would reduce the pool of people who have corrupt intent. Owning individual stocks isn't more profitable than owning ETFs.
  - sokoloff 5y ago
    Owning individual stocks (even temporarily or unvested) is a substantial fraction of compensation of many people that I want to be able to participate in local politics.
    - csee 5y ago
      Owning individual stocks is the same expected value than owning ETFs for almost all retail investors who are non-corrupt. Studies have looked at this and shown that regular investors in single stocks consistently underperform. So there's no real financial reason (in expectation terms) to do so unless they have corrupt intent. Of course someone that just got rich off NIO or GME probably differs but that doesn't speak to expected value which is all that matters for decision making.
      - sokoloff 5y ago
        Many FAANG(-N) employees receive more in compensation in the form of shares of an individual company than they do in cash. I don’t want to force them to quit their job (or cut their comp by more than 50%) if they want to contribute in local politics. If this were broadly adopted, companies would be forced to switch to all-cash offers, to create long-term incentive plans that don’t use something the legislation defines as shares, or just be content to exclude politically active people from being employees. Some might be happy with that last outcome.
        DFHippie 5y ago
        The original phrasing wasn't "contribute in local politics" but "take public office". Presumably if you take public office you give up your FAANG employment. I don't think anyone is saying you can't vote or petition government for the redress of grievances if you own individual stocks.
- actually_a_dog 5y ago
  Well... 1. Too bad. There are plenty of other good investments out there. 2. Too bad. The removal of incentives to do slimy things like the ones that are subject of this article is the greater good here. 3. Too bad. Maybe those people who choose to serve will be those who aren't in it to fleece the system of every dollar they can. I'm not sure you'd find my "counterarguments" any more persuasive than I find yours. I'm more interested in what the systemic consequences of such a policy would be, and, it seems to me that they tip in a direction that removes incentives to be corrupt, which sounds pretty darn good to me. I care a lot less about the effects on people who are currently in the position to exploit the system.
- hellbannedguy 5y ago
  "3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve." Great! America needs politicians whom are not wealthy boys, and girls.
systemvoltage 5y ago
One argument that I can think of is talented people will instead gravitate towards private industry and are disincentivzed to become public servants. Not owning invidual stock can be common shares is pretty broad. Or otherwise we would have to define what class of investment instrument should be banned. Do we also prevent buying private company shares? What about other financial derivates such as options and futures where you technically don't own the underlying stock? Do we limit real estate investments as well? If they earn a salary, where could they invest their savings? If we allow real estate investment, then public servants (1.8M US Citizens) would blow up the real estate market. There are so many secondary and tertiary effects, that would have major consequences to the economy and the functioning of the government. Not allowing any investment opportunity means they would sucuumb to the inflation rate and cannot retire.
- irrational 5y ago
  Have you even seen the kind of people who become public “servants”? Who exactly would you classify as talented?
  - markvdb 5y ago
    Both my bosses. They each head a public art academy. Both are incredibly talented, motivated people. They serve the public as best as they can. The same goes for several of my colleagues.
  - lazyasciiart 5y ago
    My father, my grandfather, my brother, many of my friends...
    - irrational 5y ago
      Uh, Trump is a father, grandfather, brother, friend (?), to people. That doesn’t really prove that someone is talented.
      - lazyasciiart 5y ago
m0zg 5y ago
Guess who writes the laws? People who are neck deep in insider trading to the point where the speaker of the House outperforms some of the best performing hedge funds. Don't hold your breath on this one. And the law would need to be signed by a dude whose son "sells art" for $75K apiece and takes jobs he himself admits are only offered to him because he has the right last name. And finally, if by miracle such a law were to be passed and signed, to enforce it you'd need to go to a judge who's also corrupt as fuck and trading stocks from the bench, and whose mortgage on his third beach home would be jeopardized if he was to agree with you. It's rotten all the way through now.
- NicoJuicy 5y ago
  The husband of the person you mentioned was already well off before she was in politics. Better yet, it was because her husband success that she worked for 20 years for free for the party.
  - m0zg 5y ago
    He's much better off now. A genius grade trader. It's a goddamn miracle. Warren Buffet doesn't even come close to such prowess. What's funny is everyone knows these are pretty damning facts that are not good for the country in the long term. And yet my posts will be flagged anyway.
    - craftinator 5y ago
      Not only unhinged, but whiney too. A true Renaissance man!
    - NicoJuicy 5y ago
      Waren Buffet doesn't even invest in tech. Something her husband did before she was speaker and he already had much success before.
      - m0zg 5y ago
        He does. Berkshire owns a ton of Apple (114 billion dollars worth) and some other tech/pharma companies. But hey, if you think insider trading is so wonderful and ethical, let's make it "fine" for everyone and abolish stock trading windows at major corporations, as well as restrictions on execs. Why should only congresspeople be able to partake?
markvdb 5y ago
As others have said, a blanket stocks prohibition might make the public sector uncompetitive. Blind trusts seem to be quite a bit too permissive to me. Offer them the performance of a stock index fund on their stock holdings, for the duration of their public mandate.
mchusma 5y ago
No business owner could be in office? Like someone who owned stock for 20 years with no plans to sell couldn't run? Seems harsh. I think limited trading is what you mean (buying and selling). Insiders at companies have limited windows to trade. Makes more sense.
topspin 5y ago
> How could anyone possibly argue against that? Arguing against that is easy. The elite have so many better ways to profit from their positions that outlawing stock ownership is laughably naïve. Trading stocks against knowledge you obtained from your government position is an easy way to get busted, so you may assume the people caught up in this represent merely the profoundly stupid; the smart elites don't get nabbed in such simple minded schemes. Yes, there are very stupid federal judges; their appointments are a product a political haymaking that has their actual competence way down the list of priorities. So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. If you're serious about meaningful efforts to hinder corruption think in terms of transparency. Give the electorate the means to know who is bought and paid for by whom. Without that you're wasting your time.
- DFHippie 5y ago
  > So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. Time is a pretty small consideration here. One can and should apply many means to lessen corruption. Transparency is certainly important, but no means is going to cover all cases or be 100% effective. Reduce the possibility of conflict of interest and increase transparency. The problem with transparency, if you're relying on democracy to do the rest, is that any sufficiently clever corruption scheme is simply not going to be understood by the public you're relying on to oppose it. If you give them an explanation in detail they mostly see simply that it's detailed. It looks no different from a conspiracy theory to most people, who will barely be following the issue anyway. Most voters are low information voters. The information they need is which party backs which position. They in effect vote as they're told, not because they're stupid but because none of this interests them.
dataflow 5y ago
Ban trades while they have the position, not ownership. If they had it long before they got the position they shouldn't have to sell it just for the sake of serving the country.
elvischidera 5y ago
Naive question: If you preclude a politician from owning stocks, can't they execute such trades via an off-the-radar friend? And receive profits via "gifts". I imagine this is already illegal? But isn't it harder to prove if done right?
sokoloff 5y ago
I don’t need the local dog catcher to be blocked from owning shares in Apple if they want to. I don’t want my local Google employees to be prohibited from running for city council or school committee.
indymike 5y ago
> How could anyone possibly argue against that? The very basis of self government (citizens being in charge) is allowing people to run for office who are every day people. This idea would require anyone who is even a part owner af a tiny business to divest in order to run. Additionally, a lot of common small businesses have no real value if the owner doesn't come with the business (a solo law practice is an example)... oh, and trusts are corporations... so this idea sounds wonderful but is very exclusionary.
Consultant32452 5y ago
If we just get the people who write and enforce the laws to pass a law that stops them from being corrupt the corruption will end.
closeparen 5y ago
Just as soon as we prohibit homeowners from serving in local governments.

lordnacho 5y ago

The real problem is you have a culture where people think the law is the edge of what is acceptable. Whether it is legal or not, I would not be punting on stocks that I was a judge for, it simply stinks and shouldn't be done. There's probably a lot of things that are formally legal but corrosive to society.

lend000 5y ago
It's nice to be able to blame something on a culture, but the reality is that some percentage of people are somewhere on the spectrum of morality where they are prone to doing this. I don't imagine judges are a particularly amoral group, despite being lawyers, but politicians certainly are. I'm always dumbfounded when people want to give politicians more power.
- lixtra 5y ago
  >> think the law is the edge of what is acceptable. > particularly amoral group, > but politicians certainly are. To be fair, if all politicians were always morally rooted in the center of the law, nothing would ever change. No marijuana, no gay marriage. Or more appropriate: There’s a certain overlap of laws (and constitutional rights) that blur the edge of law (here: pursuit of happiness for the judge’s vs. corruption of justice).
MrBuddyCasino 5y ago
> There's probably a lot of things that are formally legal but corrosive to society. Plus the process of corruption is slow and creeping. A generation doesn't know whats it like growing up a generation or two before, so the current state of affairs is taken for granted. At some point, the idea of a high-trust society where people don't need to lock their doors and children can just roam the neighbourhood freely becomes a faint memory and unreal utopia. Starting a family in their twenties, the prospect of home ownership, and being able to do so on a single income has already become unimaginable.
- sokoloff 5y ago
  The latter is not unimaginable to (and done regularly by) millions of people living in lower cost areas of the country.

Jerry2 5y ago

Everything's corrupted. Pretty much every branch of government is rife with corruption. Even the enforcement is corrupt. Money has infiltrated everything and justice is now truly blind. And if by some miracle you're tried and found guilty, you can even buy your way out of serving any time and you can even buy a presidential pardon and have your crime expunged. If you're rich, vast majority of laws simply don't apply to you. Yet there's so many laws on books and many of those laws are so vague that an average person commits several felonies every day. [1] [1] https://www.wsj.com/articles/SB10001424052748704471504574438900830760842 https://www.wsj.com/articles/SB10001424052748704471504574438...

grecy 5y ago
> Money has infiltrated everything Worse, money is protected speech, and using it to buy influence is protected by the law!
- EastOfTruth 5y ago
  bribes/lobbying should be illegal... please get a referendum going on this subject
  - jimktrains2 5y ago
    Why do you want to make it illegal for me to contact my representative and voice my opinion on upcoming legislation -- that's also lobbying.
    - FpUser 5y ago
      As long as id does not involve money direct or indirect between "lobbyist" and the official sure go and convince your rep. Just do not promise cushy job later or for relatives or any other creative ways to buy your politicians.
  - grecy 5y ago
    The challenge that the USA faces is the people who have the power to change it are the very ones who benefit the most from it. There are MANY established institutions in the USA that will fight tooth and nail not to change, because the established players are getting exceedingly rich the way things are now, to the detriment of everyone else.

tzs 5y ago

How about treating judges and legislators as if they were insiders of every public company and applying Section 16 of the Securities Exchange Act of 1934 to them? Section 16 currently applies to officers, directors, and anyone who holds 10% of the stock of a company. These people have to disclose all of their trades, and they are not allowed to make any profitable "short-swing" trades in the stock. A trade is a short-swing trade if it occurs within 6 months of a trade in the opposite direction. Section 16 is brilliant in how it is enforced. It allows any shareholder to sue the short-swing trader. The plaintiff does not have to have been a shareholder at the time of the trade. They only have to be a shareholder at the time of the suit. If the plaintiff wins the trader has to return all short-swing profits to the company and pay the plaintiff's attorney fees. Because the people covered by Section 16 have to report their trades, and because there isn't really a defense for short-swing trading, it is an open and shut case. The data is available from the SEC in electronic form, and there are lawyers who get it and do automated checks to find short-swing trades. Then it is an easy matter for them to buy a share if they don't already have one, sue the short-swing trader, trivially win the open and shut case, and collect attorney fees. If that wasn't enough to discourage insiders from short-swing trading, Section 16 provides more discouragement by being brutal in how it defines profit from a short-swing trade. Consider this sequence of trades by a Section 16 insider: Jan 1: buy N shares at $100/share Feb 1: sell N shares at $90/share Mar 1: buy N shares at $80/share Apr 1: sell N shares at $70/share The person is clearly a terrible trader. That sequence of trades has lost them $20/share. But Section 16 doesn't look at the overall results. It just looks it individual trades and tries to match them with individual trades going the other way within 6 months (before or after) and if the sell is higher than the buy that is short-swing profit. Section 16 sees the above trades as a short-swing profit of $10 x N from the purchase on Mar 1 and the sale on Feb 1. The net result then for the insider who made those ill conceived trades is that they lose $20/share on the trades themselves, and they end up having to pay an additional $10/share to the company, and pay the attorney fees of whoever managed to file first to sue them.

nerdponx 5y ago
I love this idea.
Consultant32452 5y ago

h2odragon 5y ago

They do this whole ritual about Jury Selection, you can't be a Juror if you've got family in law enforcement, etc etc. Could we have a Jury, once assembled, apply those same rules tot he rest of the Court? "Your Honor have you ever held ownership in the companies involved in this case? Ever been married or intimate with any of the parties in this case?"

colejohnson66 5y ago
There are ethics laws for lawyers and judges. The problem is: the enforcer of those ethics laws are partially the judges themselves. It’s the same issue with cops breaking the law; cops don’t rat on/arrest other cops.
- h2odragon 5y ago
  It seems like we have a lot of social problems like that; we have laws about them, but the enforcement became spotty somehow... Some people can start an online bank, or have a "taxi app"; and it's OK; but everyone else has the laws against it enforced. Perhaps some of the conspiracy theorists talking about the undermining of the prosecutor and court systems since the 90's have been onto something.
- MichaelZuo 5y ago
  Surely superior judges make the decisions relating to inferior judges? It’s hard to believe judges at the same level in the hierarchy are making those decisions for themselves in any capacity.

aomobile 5y ago

Needs to be regulated Asap. Corruption is cancer.

web2sucks 5y ago

This is why small government is so important.

deleted 5y ago
[deleted]
adrr 5y ago
Small government isn’t immune from corruption. City level has some of the worst corruption.

tonmoy 5y ago

Technically these judges should have recused themselves, but is it really a big deal that the judges (or their families) had financial advisors or stock brokers held shares in companies they were probably not even aware of was a defendant? The real question would be how much did these judges make by buying or selling those stocks during the cases compared to rest of their portfolio. I would imagine it’d be negligible

harry8 5y ago

Matt Levine has noted in modern America everything is securities fraud; the most egregious of crimes are being prosecuted as securities fraud rather than whatever the actual crime was. How does security fraud apply to this? Or is that why it happens? You can't point to a "shareholder loss" and all other stakeholders in the company, the legal system and society don't get enforcement when they are the victims of this kind of crime? The company can't be held responsible if a corrupt judge acts corruptly (or impersonates someone who is corrupt displaying a stupidity that should bar them from any position of responsibility), if that judge did not involve the company directly in that corruption.

stevespang 5y ago

Title should be: OBVIOUS CORRUPTION: Federal Judges or Their Brokers Traded Stocks of Litigants During Cases

heythere22 5y ago

https://archive.md/j7Tkh https://archive.md/j7Tkh