Pandemic Congressional Insider Trading:
Legally Suspect and Morally Bankrupt
Candidate for Congress, 52nd District
Congressman Scott Peters (D., Ca.), is in the national news for all the wrong reasons.
The San Diego Union-Tribune, Wall Street Journal and Politico all reported that Peters
sold securities between January 27 and January 31, just two days after a non-public
Congressional briefing on the impending Coronavirus emergency. According to Rolling
Stone , “Members of Congress trading against a pandemic is as low as it gets.”
While American 401k retirement plans took a beating from the ensuing financial crisis -
quickly losing 25% of their value - our wealthy Congressman suffered no such fate.
Scott Peters traded millions in securities to safeguard his fortune based on information
not available to the American public, just before the devastating economic meltdown.
Politico wrote, "Lawmakers in both chambers were being briefed via both classified and
non-classified meetings about the Coronavirus in late January and February, giving
people on Capitol Hill a closer look at how the coming pandemic might shape their lives
and finances that much of the country was lacking."
When his unethical behavior was publicly revealed, Representative Peters’ response
was cynical, shameless--and predictable. Through a spokesperson, he had the sheer
temerity to suggest these revelations distracted from the suffering of Americans rather
than igniting their outrage. This absurd deflection simply underscores his disconnection
and outsized sense of entitlement. It’s much more than hypocrisy. It is a fundamental
dereliction of duty.
Peters shrugs and simply assumes he’ll get away with it. And he wouldn’t be the first.
Congressional insider trading is a long-term problem now brought into sharp relief
during this crisis of unprecedented magnitude. At least two dozen other members of the
House and five Senators engaged in questionable securities trades in early February
after various briefings.
When will the government finally crack down on Congressional insider trading? Forbes
asks, “How can such high-profile elected officials...make these types of investment
decisions? At face value, they look like they are flouting the law and taking advantage of
private information only available to them. It’s frightening how arrogant or clueless they
are to be unaware of how the public views this perceived breach of trust. At a time when
we are depending upon our leaders in Congress, the appearance is that they are
looking out for themselves.”
This scandal should be a tipping point. Congressional profiteering shouldn’t be allowed
at any time, but especially during a time of crisis. Americans are demanding
accountability and calling for probes into Congress’ financial dealings. Peters should
submit to an investigation by an enforcement agency with teeth rather than a conflicted
ethics committee of House peers. Earlier this week, it was reported that the FBI and
SEC have opened an inquiry into these questionable Congressional trades.
As a former CEO of a NASDAQ company, I was well aware of the SEC trading
restrictions and honored them. It’s not that difficult. It simply requires integrity. As your
Congressman, I will immediately propose legislation during my first week in office to
stop these selfish actions by requiring all members of Congress to put their securities in
a blind trust, ending this outrageous violation of public trust.
For any person of any party, selling and buying securities prior to an impending crisis
based on privileged information is a colossal breach of ethics that dishonors the very
idea of public service. I call on Representative Peters to address this issue himself, not
through his staff. This is a serious violation of trust and he needs to disclose the details.
Mr. Peters, please tell your constituents why you think trading on material non-public
Congressional information is the right thing to do.
This is another example of chummy inside politics by a comfortable politician detached
from hard working Americans fighting to protect their savings. Sadly, even the most
stringent laws will be neutered when overseen by ethically challenged public officials.
As one concerned scientist said, in addition to better laws, what we really need are