My article published by the Pepperdine Journal of Business, Entrepreneurship, & The Law explores insider trading by public officials throughout the 21st century, including during the COVID-19 pandemic. You can read the whole article to learn more about Members of Congress trading stocks, purchasing property, and abusing their positions of power for financial gain in Money, Power, and Radical Honesty.
Senators Kelley Loeffler and David Perdue were cleared of any wrongdoing due to a lack of evidence, and they continued their bids for re-election in the Georgia run-off elections, which were critical for control of the Senate. Both senators faced scrutiny for trading stocks in the lead-up to the COVID-19 pandemic after receiving classified briefings. Unfortunately, this is not an isolated incident—there have been numerous instances of Congress members profiting from insider knowledge gained through their positions.
While the American public remained largely unaware of the looming crisis as COVID-19 spread, members of Congress were privy to private briefings. Many quietly sold stocks in sectors like travel and hospitality, which they anticipated would plummet, and simultaneously purchased shares in companies tied to remote-work software and medical supplies—industries expected to benefit during the pandemic.
Beyond pandemic-related trading, Congressional members frequently profit from their positions in other ways. These include benefiting from federal funds that increase the value of their personal real estate, gaining access to lucrative IPOs, and securing seats on corporate boards. Unlike corporate executives and ordinary citizens who are subject to strict insider trading laws, members of Congress often exploit loopholes and exemptions tailored to their advantage.
This article explores various proposals to address Congressional insider trading and other unethical financial practices. While many suggestions have been made, most fail to effectively prevent members of Congress from engaging in these potentially corrupt activities.
For real change, we must introduce comprehensive reform that limits the financial opportunities available to members of Congress. Key solutions include stricter reporting requirements, greater transparency, and legal measures that close loopholes allowing Congress members to profit from privileged information. These reforms are critical to ensure that elected officials prioritize the interests of the American public—not their own financial gain.
By implementing these sweeping changes, we can restore public trust in our government and ensure that those who hold public office serve the people, not their pocketbooks.
This article has also been featured on Richard Peltz-Steele’s blog, The Savory Tort and discussed on the spencerthelawyer Podcast.