Members of Congress are facing renewed scrutiny after a new disclosure report filed by Florida Democrat Lois Frankel revealed that she dumped First Republic Bank stock prior to its collapse and purchased JPMorgan stock before JPMorgan purchased First Republic.
According to a financial disclosure report filed on April 28, Frankel sold between $1,001 and $15,000 in First Republic stock on March 16 and then bought between $1,001 and $15,000 in JPMorgan stock on March 22.
Frankel told CNN that her “account is managed independently by a money manager who buys and sells stocks at his discretion.” Congresswoman Frankel is not facing any investigations.
The Daily Caller was first to report the news.
The 2012 STOCK Act made it illegal for members of Congress to knowingly trade, buy or sell stocks based on material information obtained in their official capacity as a member of Congress. The law also requires members of Congress file timely financial reports disclosing their trades.
Compliance with the law has been sporadic given the lack of enforcement mechanisms. In one prominent instance, former Republican Senator Kelly Loeffler was the subject of an investigation after she sold millions of dollars in stock before the market collapsed in Spring 2020.
CNN reported in May 2020 that the Justice Department notified attorneys for Loeffler that she would not face charges over the transactions. Loeffler denied any wrongdoing related to the sales.
There have been a number of efforts since 2012 to strengthen the law. In January, Virginia Rep. Abigail Spanberger and Republican Rep. Chip Roy of Texas reintroduced the bipartisan Transparent Representation Upholding Service and Trust (TRUST) in Congress Act, which would ban members of Congress and their families from trading individual stocks.
“We are long overdue for a vote on legislation to ban Members of Congress and their spouses from trading individual stocks,” Spanberger said in a statement in January. “Our TRUST in Congress Act would demonstrate that lawmakers are focused on serving the interests of the American people – not their own stock portfolios,” she added. Last Congress, the bill failed to receive sufficient support to get a floor vote.