Federal Officials Trading Stocks in Companies They Oversee

Stocks frequently traded ahead of agency enforcement. 

More than 2,600 federal officials either own or have traded stock in companies their agencies oversee, according to a report from the Wall Street Journal. The report also states that officials frequently traded stock in companies shortly before their agencies announced enforcement actions that affected the stock prices of those companies. 

A top official at the Environmental Protection Agency reported purchases of oil and gas stocks. The Food and Drug Administration improperly let an official own dozens of food and drug stocks on its no-buy list.  

The publication also reported that as the government was investigating Facebook, Google, Apple, and Amazon “more than 1,800 federal officials reported owning or trading at least one of four major tech stocks.”

Five other agencies also reportedly had dozens of officials that engaged in “trading stock in companies shortly before their departments announced enforcement actions, such as charges and settlements, against those companies.“ 

Officials in the office of the Secretary of Defense “reported collectively owning between $1.2 million and $3.4 million of stock in aerospace and defense companies on average each year examined by the Journal. Some held stock in Chinese companies while the U.S. was considering blacklisting the companies.” 

The Wall Street Journal review amounts to the most comprehensive analysis of investments held by executive-branch officials, who have wide but largely unseen influence over public policy. 

Under federal regulations, investments of $15,000 or less in individual stocks are not considered potential conflicts, nor are holdings of $50,000 or less in mutual funds that focus on a specific industry. The law does not restrict investing in diversified funds. U.S. law leaves it to individual agencies to decide whether or not to strengthen the federal conflict-of-interest regulations. 

As the Lord Leads, Pray with Us…

  • For U.S. governing officials to take an ethical stand regarding investment integrity and regulation.
  • For members of Congress to collectively consider the need for restrictions on stock trading by those with a conflict of interest.
  • For truth and justice to prevail in cases of deceptive dealings and corruption.

Sources: Wall Street Journal, Mint, Fox Business 


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