In April 2012, the US government passed the “Stop Trading on Congressional Knowledge” Act, cleverly abbreviated to the STOCK act. This act made it illegal for members of Congress to trade in stocks using Insider or non-public information. Moreover, it became compulsory that Congressmen should report their trades within a span of 45 days.
Over the years, American lawmakers have weakened their practice of this Act. In 2020, politicians received criticism for making timely decisions and selling expensive stocks. These were later affected severely by the COVID-19 pandemic that caused stock prices to dive.
Here, at Capitol Trades, we've taken a look at five lawmakers who dealt in some weighty stocks but sans a report within the required mark. Instead, all of these trades were reported on 23 Sep’21, at a stretch of 8 months to over 3 years.
The five politicians and their trades are detailed as follows:
Warren Earl Davidson, Representative of Ohio
Republican Davidson sits on the Financial Services Committee. He has a history of owning a Group of Manufacturing companies prior to his political career. In the past, he has pushed for laws that serve America’s growing blockchain industry.
On March 16, 2020, he received shares in Cleveland Cliffs Inc. (NYSE: CLF) and later sold said shares on 21 Sep’20. Both transactions were worth between $15K and $50K.On 28 Aug’20, Davidson’s sales in Workhorse Group Inc. (NASDAQ: WKHS) resulted in capital gains greater than $200 in the limits of $50K to $100K. He later purchased more shares from the same Issuer, this time at a lower price range of $15K to $50K.
Davidson sold 184-610 shares of EXXON Mobil (NASDAQ: XOM) on 17 May’18, in the range of $15K-$50K. Alas, the report for this trade was delayed for a whopping 1,225 days post the transaction date.
Virginia’s Representative, Donald Sternoff Beyer Jr.,
Beyer’s second-most traded sector is Financials, while he himself is seated on the Joint Economic Committee.
The Democrat traded especially in the month of Dec’20 and in thirteen different companies. The most notable trades were perhaps three of the most talked-about stocks this year: Apple Inc (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT), and Walt Disney Co. (NYSE: DIS). Beyer sold 10 Units of AAPL & MSFT stock while purchasing 10 $DIS units. The values of all three trades were in the $1K to $15K category. On the other hand, the stock price of all three rose from around 36% to 47% over the past year.
Mark Edward Green, Tennessee Representative
Republican Green has vastly traded in the Energy Sector and bought striking amounts of Dogecoin ($DOGE) this year. Likewise, he traded in five companies from the aforementioned sector, along with two in the Financial Sector. All these transactions were dated Dec’20 and Jan’21.
On 10 Dec’20, he sold shares from Shell Midstream Partners LP (NYSE: SHLX) & Antero Midstream Corp (NYSE: AM), both Energy companies, worth around $500K to $1M. In the same value range, he sold more shares on 6 Jan’21, this time from InfraCap MLP ETF (NYSEARCA: AMZA). He had already made purchases from the same issuer earlier on 23 & 24 Dec’20.
Except for NGL Energy Partners LP (NYSE: NGL), all the stocks which Green traded in had significant % increases in their prices in the past year. The largest climb was by Cresswood Equity Partners (NYSE: CEQP) whose stock price increased by 127.88%
James R. Langevin, Representative of Rhode Island
On 14 Dec, Democrat Langevin sold 8000 call options of Facebook Inc. (NASDAQ: FB) with an expiry due on 29 Jan’21. This was reported after 258 days from its filing and 283 days from its sale date. Over the course of the year, the price of $FB stock has risen by a whopping 96.43%.
North Carolina’s Representative, George Francis Murphy
As per our CapitolTrades feed, Republican Murphy has only ever traded in the Healthcare sector.
One memorable trade was that of Nymox Pharmaceutical Corp. (NASDAQ: NYMX), the sub-holding of Vanguard Funds. This selling of 75,000 units was worth anywhere from $50K to $100K but was reported 244 days from its initial transaction date, on 22 January 2021.
Bending the Rules
The stock trading of US Congressmen combined with late reporting and their criticism by the public has been going hand in hand. Neither activity, however, has shown signs of freezing over the years. On a plus note, political trades have become a wildly popular source of information for many private investors.
But of course, these incidents send a negative impression more than anything. Not a very favorable picture is painted when the people running the country themselves are sluggish in practicing and implementing the very laws they introduce.
Discover more in the world of Politicians Stock Trading with our blog.