In recent years, the US has experienced an unprecedented number of Financial Conflicts-of-Interest in its Executive and Legislative Branches. But now a Report shows, we now have Financial Conflict-of-Interest, in the federal Judiciary.
131 Federal Judges Broke-the-Law by Participating in 685 Cases in which they had a Financial Interest, chiefly because of their Holdings in Individual Stocks. This is a Violation of the Disqualification Statute for US Judges, Prohibiting them from Deciding Cases in which they have a Financial Interest.
We have an Ethical Crisis across All Three Branches of Government, including Trump's Refusal to Properly Divest.
Donna Nagy, a Professor at the Maurer School of Law at Indiana University, Published Extensively on Congressonal Insider Trading.
As for the 131 Federal Judges, holding indivual Stocks in Companies affected by Cases before them, are Required to Recuse themselves. It’s likely that some Judges aren’t Watching their Portfolios or their Spouses’ Portfolios, or aren’t aware that many Larger Publicly Traded Companies have Multiple Subsidiaries.
The Identify of those Subsidiaries is unknown to the many Investors, Judges included, who don’t Read the Parent Company’s Annual Report. Other Judges simply may Not care about Complying with a Statute that requires Recusal.
This Problem could easily be Avoided if Judges, like most Americans who Invest for their Retirement, Invested in the “mutual or common investment funds” that are Specifically Exempt from the Conflicts-of-Interest Provisions under Federal Law. It is unlikely that a Single Case would affect the Value of an entire Fund. For whatever reason, perhaps the belief that they can Beat the Market, because they have more Information than Professional Fund Managers, some Judges, like some Members of Congress, insist on Owning, and sometimes actively Trading, Individual Stocks.
Some Judges may think that, when the occasion arises, they can Sell a Stock so they can Participate in a Case. Not so fast. If the Judge has any Inside Information from the Court about how the Case might come out, Selling the Stock while in Possession of that Information could Expose the Judge to Prosecution under Federal Criminal Insider Trading Laws. The Judge who has a Conflict-of-Interest in a Case may be Stuck with a Stock by the Time the Conflict is Noticeable.
At least Three Supreme Court Justices: Chief Justice John Roberts, and Associate Justices Stephen Breyer and Samuel Alito, own Individual Stocks, and All Three have Recused themselves from Cases because of their Stock Holdings.
The Problem is, unlike on the Lower Federal Courts, there are No Replacement Justices to take their Place. A Case could be decided by Eight Justices or Seven Justices, because of Recusals. This is Problematic for the Supreme Court, which often have to Grant Review in certain Cases not just to Resolve a Particular Dispute but to clearly state what the Law is going Forward. A Supreme Court Decision that does Not have the Support of at least Five Justices has Little Value as a Precedent because the Ruling could be Reversed in a Future Case in which None of the Justices Recuse themselves.
This is also a Problem that could be easily Solved if Justices were to Invest the same way most Americans Invest their Retirement Funds, in broadly Diversified Mutual Funds.
At this point Congress must realize that there is a Crisis in Confidence in All Three Branches of Government. Many Voters believe, with some Justification, that Corruption spreads like a Disease and that Executive, Legislative, and Judicial Decisions are made with Little regard for the Interests of the Average Citizen. This Cynicism, and theRreality that underlies it, are Dangerous for the Future of Representative Democracy.
Virtually every other Federal Employee is Prohibited by Criminal Statutes from Participating in matters in which they have a Conflict-of-Interest. Holders of the Highest Federal Offices: Executive, Legislative, or Judicial, should be Required to do the same.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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