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The absurd reason a lawmaker gave for breaking stock rules

When Rep. Tom Suozzi (D-NY) appeared before congressional investigators earlier this year to explain why he failed to disclose hundreds of stock trades in a timely manner, the current Long Island congressman for governor had quite the explanation.

Suozzi actually told investigators he was too busy to deal with the “formality” of reporting hundreds of transactions – and actually blamed the Ethics Office for not sending him constant reminders or have sent a dedicated compliance staff member.

“Frankly, there’s a lot going on in Congress. I have many other things going on. And that’s just not the case – ethics is a big priority for me. But…the…some of the formalities are not necessarily something that I make a priority of,” the congressman said, according to a transcript of deposition.

Plus, he hired someone else to trade stocks for him, so he didn’t believe he had to report every time he bought and sold shares of dozens of companies.

“I felt like because I had [broker-directed] accounts they traded at their discretion, that I had an obligation to file an annual statement. And I filed an annual return every year,” he told congressional investigators this year.

In his deposition, Suozzi told investigators he left the trade to an independent stockbroker, which he believed somehow relieved him of having to show when he bought or sold. actions.

For example, when Suozzi’s stockbroker bought over $50,000 worth of Tesla stock in March 2021 – and when the broker sold off the following month, just as other members of Congress began to s concern about the automaker’s Autopilot feature – Suozzi was obligated to disclose this information within 45 days. He did not do it.

Suozzi was one of three members of Congress who were released last week when the House Ethics Committee – known for failing to take action on all but the most egregious violations – blamed their failure to report stock trades as innocent mistakes.

In a July 29 statement, the bipartisan ethics committee officially said that “there was no clear evidence that the errors and omissions…were conscious or deliberate, and that members were generally unclear about requirements”.

When he did release investigative documents three days later, it became clear that Suozzi remained defiant when forced to face his mistakes earlier this year and offered new defenses.

During a virtual meeting with House ethics lawyers on January 12, attorney Omar Ashmawy asked the congressman if any changes could be made to help politicians file their disclosures when they’re supposed to. TO DO.

Suozzi suggested that each member of Congress should have their own ethics counsellor.

“Well, I think, you know, there’s [sic] only 435 members of Congress,” Suozzi replied. “And so I think every member of Congress should have someone from the Ethics Office who is responsible for that member. So like everyone has their staffer. And that staffer should be, you know, instructed to say, ‘Hey, you know, you didn’t take your course, you didn’t file your reports, you didn’t do this, you didn’t do that.'”

That didn’t sit well with former House ethics lawyer Kedric Payne of the Campaign Legal Center, a nonprofit watchdog who first called out Suozzi for the complete lack of stock trading. transparency over five years.

“His explanation just doesn’t pass the smell test. This is the simplest rule. Report your stock trades,” Payne told The Daily Beast.

Current rules require any politician in Congress — and some employees — to report any stock trade over $1,000 within 45 days. But Suozzi, like so many others in Congress, totally neglected the rules.

It wasn’t until September 22, 2021, when the Campaign Legal Center called him and six other members of Congress that Suozzi noticed him. The very next day, he filed a “periodic transaction report,” a gargantuan 50-page accounting of more than 400 stock trades dating back to his very first week in Congress four years earlier.

“Do you see how fast he could do it? Payne asked. “He hasn’t had time to report, but he’s making it a priority to trade so many stocks.”

Records show consistent buying and selling of dozens of different types of stocks, from automakers like Ford and General Motors to chipmakers like AMD and NVIDIA.

Suozzi’s office did not respond to a request for comment Friday.

In his deposition to investigators, the congressman argued that he believed it was sufficient to file year-end reports reflecting his investment portfolio. Although these year-end reports reflect all of the shares held by a politician, they do not show the many buying and selling that take place throughout the year, and do not always indicate when a member has bought or sold shares.

The congressman was called out publicly by the Campaign Legal Center after an exhaustive search by a researcher there, Sophia Gonsalves-Brown, who reviewed each member of Congress and compared disclosures from year to year to spot when certain stocks seemed to disappear. The nonprofit then filed a formal complaint with the Congressional Ethics Office, which anyone can do by filling out a form.

Last week, however, that complaint fell through when the House Ethics Committee issued formal reprimands to Suozzi and two others who failed to file reports on time: Rep. Pat Fallon (R-TX) and Rep. Chris Jacobs (R- NEW YORK).

The Daily Beast attempted to review the excuses they had for not filing reports, but the depositions were not available to any members of Congress. According to committee staff, Congressman Fallon “chose not to cooperate, so no deposition.” Meanwhile, any official interview with Jacobs is not available to the public because the ethics committee, which is separate from the committee and headed by former congressman Mike Barnes, was deadlocked over whether to whether or not to continue the investigation. The House of Representatives is not subject to public records laws.

Fallon and Jacobs’ congressional offices did not respond to requests for comment.

The STOCK ACT violations by these politicians come at a watershed moment, when the law is under scrutiny for not going far enough to ensure that politicians do not abuse their positions of power to personally enrich themselves with sensitive information. they receive as members of Congress.

Sen. Jon Ossoff (D-GA) has called for an outright ban on members of Congress from trading stocks. And others have joined the fight to prevent politicians from taking personal advantage, especially because so many of them get away with it. For example, the Justice Department eventually dropped its investigation into how Sen. Richard Burr (R-NC) sold up to $1.7 million in stock after personally reassuring the American public that that the country was prepared to deal with the COVID-19 pandemic.

At this point, several House and Senate bills seek to prevent politicians from trading stocks in one way or another. But none received a vote, though Democrats are quietly trying to force Speaker Nancy Pelosi (D-CA) to move forward on a consensus bill.

Yet the lack of action has led The New York Times editorial board to say that “members of Congress should never trade stocks,” and Insider launched its own tool, called “Conflicted Congress,” to track the lack of transparency.

Meanwhile, the House Ethics Committee is in turmoil. Ranking Republican Rep. Jackie Walorski (R-IN) died Wednesday in a two-car crash in her home state.

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