WASHINGTON (Gray DC) -- Several U.S. senators are facing scrutiny for buying and selling stocks ahead of the coronavirus pandemic.
Senators are being scrutinized for buying and selling stocks after a closed-door briefing on coronavirus. (Source: Gray DC)
The questions raised by the senators’ trading habits could be the biggest test yet for a law designed to crack down on corruption in Congress.
Craig Holman lobbied for that law that bars Washington insiders from using their knowledge of government secrets to cash in on Wall Street.
"It applied the same insider trading law that applies to you and I and Martha Stewart to members of Congress as well," said Holman.
It’s called the STOCK Act, which was signed into law by President Obama in 2012.
Holman says the news about senators’ financial trading before the coronavirus wreaked havoc on the stock market should lead to questions from lawmakers, financial regulators, or federal agents.
"It's on their radar, they are going to be looking this," he said.
The senators facing questions about their stock trades deny any wrongdoing. Some even deny knowing what they own – leaving those decisions to their money managers.
"If you could show that the person making the decision honestly had no idea, and was making an independent decision, this isn’t going to turn out to be unethical or insider trading at all," said Georgetown Law Professor Donald Langevoort.
Langevoort says it only takes one call, email, or note to turn legal trading illegal or criminal.
Langevoort has studied insider trading in Washington for more than 30 years. We asked if public officeholder should be allowed to hold any stocks.
“At this point, we’ve not been willing to go that far. It’s a good question for people to wonder about," he said.
One senator has already asked the Senate Ethics Committee to investigate. The Securities and Exchange Commission and the Department of Justice could also get involved.
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