7 Members Of Congress Failed To Disclose Stock Transactions: Who Was Named, And What's Next?

The call for members of Congress to be banned from buying and selling stocks continues to heat up with a new report that seven members of the House of Representatives failed to disclose their stock trades.

What Happened: An ethics group found that seven U.S. House of Representatives members didn’t report stock trades. The members of Congress included in the report are four Democrats and three Republicans, NPR reports. 

Five of the seven named parties serve on the House Financial Services Committee, which could give them early information on government policies.

The report was filed by the Campaign Legal Center, a nonpartisan entity.

The STOCK Act, signed into law by President Barack Obama in 2012, was put into place to discourage insider trading by members of Congress. The law, also known as Stop Trading on Congressional Knowledge Act, made it mandatory for members of Congress to file reports when they bought or sold stocks within 45 days of each trade worth over $1,000.

The new report shows that in the case of the seven named parties, they never filed a proper disclosure at all. 

“The lack of accountability we’ve seen in regard to STOCK Act compliance is basically giving elected officials the green light to buy and sell stocks based on information gained from committee meetings without any transparency for their voters,” Campaign Legal Center’s General Counsel Kedric Payne said.

Related Link: 8 Stocks Prolific Trader Sen. David Perdue Sold While In Congress

The Seven Named Parties: Tom Suozzi, a Democrat from New York, failed to disclose 300 stock transactions, according to the report.

“The Congressman’s investments are managed through independent advisors with discretion over all transactions. Every transaction has been reported on his annual financial disclosure and all proper periodic disclosures will be filed on a going forward basis,” a spokesperson for Suozzi told NPR.

Other parties include Democrat Cindy Axne of Iowa, Republican Warren Davidson of Ohio, Republican Lance Gooden of Texas, Democrat Michael San Nicolas of Guam, Democrat Bobby Scott of Virginia and Republican Roger Williams of Texas.

Axne, Davidson, Gooden, San Nicolas and Williams are all members of the House Financial Services Committee.

Davidson sold shares of Workhorse Group WKHS valued between $50,000 and $100,000. Workhorse missed out on a significant deal from the United States Postal Service that sent shares crashing.

Some of the other stocks mentioned in the report including cruise lines and airlines, two sectors that got hit hard when coronavirus shutdown orders were put in place.

What’s Next: In 2021, there have been numerous violations to the STOCK Act, with members of Congress failing to disclose purchases or making the disclosure months after the deadline.

Speaker of the House Nancy Pelosi has been among those in the spotlight for disclosing trades made by her husband that could come from information the Congresswoman knows. 

Rand Paul recently failed to disclose a purchase of Gilead Sciences GILD, a company that stood to benefit from ruling on a COVID-19 treatment option. 

“We’ve had several examples where members of Congress bought or sold stocks that pertain to their work, and there actually were follow-up investigations to see whether or not they bought or sold those stocks based on nonpublic inside information,” Sen. Kirsten Gillibrand told NPR.

Gillibrand, who helped write the STOCK Act, said the rule is working.

Senator Jeff Merkley, who voted the 2012 law into place, was less enthusiastic.

“The STOCK Act is pretty much useless,” Merkley told NPR. The Congressman calls for the banning of trading stocks by members of Congress.

“It’s a huge conflict of interest for someone to be trading in, say, pharmaceutical stocks at the same time as making policy for pharmaceutical companies.”

Merkley has introduced a bill that would make it a requirement for members of Congress to divest their stock holdings within six months of taking public office.

“I can guarantee you that every year there’ll be a scandal related to stock trading.”

Merkley said he has the support from some Democratic colleagues, but the topic is not popular. A push for creating a STOCK Act 2.0 is gaining steam from some members of Congress.