A federal judge in Seattle who recently dismissed a $72 million verdict against Boeing BA revealed that he accidentally traded the company’s stock while overseeing the case.
What Happened: Judge James Robart told Business Insider that his wife’s IRA, managed by a bank, had bought and sold between $1,000 and $15,000 worth of the company’s stock last year in April while presiding over the case.
Upon learning about this, Robart promptly sold the stocks, with financial disclosures reportedly indicating the shares were sold in May and June.
Boeing did not immediately respond to Benzinga's request for comment.
The case involves Zunum Aero, an electric aircraft startup that sued Boeing in 2020, alleging conspiracy to deprive it of funding and steal its plans. A jury awarded Zunum $72 million in June, but Robart later dismissed the verdict, citing insufficient testimony on Zunum’s trade secrets.
Robart described the stock trades as an error and stated that he took immediate steps to rectify it. However, he did not inform the lawyers for either side and made no public acknowledgment of the trades, except for the legally required financial disclosures.
“There could be some market movement, but it’s not going to influence my decision,” he said.
Why It Matters: The financial activities of federal judges have been under scrutiny recently, with reports of 131 federal judges breaching ethics laws by not recusing themselves from cases where they or their family members held stock.
Robart, who was not among the judges in the report, stated that he was cautious about his trading. He was unaware that his wife’s IRA was in a pooled fund that traded individual stocks until he received a monthly report on its trading activity.
Legal ethics expert, Bill Hodes, suggested that as long as the trades were accidental, quickly rectified, and not repeated, it might be considered a technical violation.
Gabe Roth, from the group Fix The Court, stated that the level of care Robart took was what judges are supposed to do. “I think he probably should’ve mentioned this to the parties,” Roth said.
Meanwhile, Boeing has been facing a series of setbacks, including structural cracks in its 777X jetliner, which led to the grounding of its test fleet.
The company also appointed a new CEO, Kelly Ortberg, amid safety concerns. Ortberg also relocated to Seattle to address the safety crisis, indicating the severity of the situation.
Boeing and Spirit AeroSystems executives testified at a hearing earlier this month regarding the in-flight blowout on a Boeing 737-9 MAX in January. This incident led to a series of repercussions for Boeing, including a temporary grounding of the MAX 9, a halt on production expansion by the Federal Aviation Administration (FAA), a criminal investigation, and the departure of several key executives.
Price Action: Boeing was trading 0.33% higher in premarket on Thursday, according to data from Benzinga Pro.
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