In its recent reports, Finbold revealed that several US Congress members and politicians have been investing in war-related stocks amid growing tensions in the Middle East. This development raises concerns about potential conflicts in the region and the impact on global stability.
These political figures have been targeting sectors such as defense, cybersecurity, and energy, which stand to profit during times of geopolitical turmoil.
Interestingly, one of those individuals was US Representative John Rutherford, a member of the House Ethics Committee, which is responsible for enforcing the STOCK Act, among other things.
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Rutherford, who, for instance, bought shares of a US defense contractor (NYSE: RTX) on the day of Russia’s invasion of Ukraine, allegedly breached the same STOCK Act he is responsible for enforcing, more than 150 times, according to Quiver Quantitative.
The representative has never been investigated over these reported violations, the account noted in its November 3 post on X.
What is the STOCK Act?
Enacted in 2012 by former US president Barack Obama, the STOCK Act, or “Stop Trading on Congressional Knowledge Act,” is a US federal law.
It aims to prevent insider trading by members of Congress, their staff, and government officials. The Act requires them to disclose their financial transactions and investments, making their trading activities more transparent.
Put simply, it helps promote ethical behavior and accountability by ensuring that public servants do not profit from non-public information acquired through their positions in government.
Rutherford’s 134 STOCK Act violations between 2017 and 2018
Under the STOCK Act, Congress members and other US representatives are required to report their securities trades over $1,000 within 45 of the execution on forms known as ‘periodic transaction reports’ (PTRs).
Last year, reports revealed that there is “substantial reason to believe” that Rutherford and another US representative, Pat Fallon, both violated the act by failing to properly report their stock trades. These suspicions were reported by the Office of Congressional Ethics (OCE).
For instance, Fallon’s PTRs “evidence a pattern of late disclosure of reportable transactions, which continued even after he was on notice of his STOCK Act filing obligations,” the OCE report said.
In the period between January and December 2021, there were 122 occasions where the representative failed to disclose transactions between $9 million and $21 million.
Similar violations were revealed for Rutherford, who conducted 136 late reportable disclosures between $631,000 and $3.2 million in the period from July 2017 to August 2018. Out of those, 134 of those should have been penalized, the OCE noted in the report.
