According to Business Insider, which reviewed the members’ financial disclosure forms, four Democrat House members appeared to violate the STOCK Act of 2012, also known as the Stop Trading on Congressional Knowledge Act. House Democrat Reps. Josh Gottheimer (NJ), Mary Gay Scanlon (PA), Susie Lee (NV), and Brad Schneider (IL) all failed to adequately disclose their stock transactions within the allotted time required by the STOCK Act.
Members of Congress must submit periodic transaction reports within 30 to 45 days after making stock transactions over $1,000 on their behalf or on behalf of their spouses under the STOCK Act. Despite the $1,000 threshold, lawmakers are not required to give specifics about the trade, only a broad range.
In November 2021, Gottheimer and his wife “exchanged” up to $15,000 worth of Meridian Bancorp, Inc. stock for Independent Bank Corp. stock. According to Insider, the disclosure report was filed months late on August 13.
Despite the exchange of over $1,000, Gottheimer’s spokesperson Chris D’Aloia told Insider, “No shares were purchased or sold.”. Only the shares were exchanged. He added that they immediately filed when his office was notified of this exchange on August 10 of this year.
According to the spokesperson, the congressman entrusted the management of his retirement savings and investments to a third party before he took office.
In February, Gottheimer announced he would create a blind trust to protect his assets. According to House records, it is not “formally established” since, as Insider pointed out:
In Congress, “qualified blind trusts” require congressional approval and are considered the “most comprehensive approach” for preventing conflicts of interest or their appearance. To establish such a blind trust, a lawmaker must officially transfer management of their financial assets to an independent trustee. The process of establishing a blind trust can be time-consuming and costly.
In February 2021, Scanlon’s husband sold four stocks worth $95,000 and exchanged $15,000 worth of DuPont de Nemours shares. According to Insider, the disclosure report was filed on August 12 – almost a year and a half after the deadline.
Carina Figliuzzi, the congresswoman’s spokesperson, told the publication that the congresswoman discovered that certain transactions in her husband’s retirement account had not been reported in a previous filing. According to her, it is managed by an independent financial advisor and was not reported previously.
In addition, Scanlon’s spokesperson said that the congresswoman paid the $200 late fee, which is a standard penalty for late disclosures. Figliuzzi noted that Scanlon had implemented additional procedures to prevent such transactions from being overlooked again.
In addition, the report noted that Lee and her husband traded eight stocks in 2021 – between January and September 2021 – and that their total worth was $155,000. These stocks included Ally Financial Inc., Dollar Tree Inc., and Synchrony Financial Inc. The disclosure report was filed on August 13 – the same day as Gottheimer’s – months late.
The congresswoman’s office told insider that her financial advisor noticed an error in the trade list when preparing the annual disclosure report and filed a periodic transaction report. According to the office, she does not make any trades herself and has a third-party money manager. According to them, she has contacted the House Committee on Ethics.
According to the report, Schneider’s wife sold up to $150,000 worth of Trupanion, Inc. stock in February and December 2021. According to Insider, the disclosure report was filed on August 13 – the same day as Gottheimer’s and Lee’s – months after the deadline.
Casey O’Shea, the congressman’s chief of staff, told Insider that the stocks came from an investment partnership his wife had inherited from her father. According to O’Shea, the congressman discovered the trades while preparing his annual financial disclosure statements and paid the $200 fine.
STOCK Act was a bipartisan law signed by President Barack Obama on April 4, 2012, that banned insider trading by members of Congress. Both parties overwhelmingly supported the legislation.
Government Accountability Institute (GAI) President Peter Schweizer’s insider trading investigation by Congress members rocked official Washington in 2011. Schweizer’s book on the topic, Throw Them All Out, started the STOCK Act stampede.