The "Stop Trading on Congressional Knowledge Act" (STOCK Act) first became law in 2012. It affirmed that insider trading laws applied to members of Congress and enacted financial reporting and disclosure requirements for members.
A 60 Minutes report in 2012 is credited with triggering congressional action on the STOCK Act which had been languishing in Congress for years. The report highlighted lucrative and "well-timed" stock transactions by congressional leaders from both parties that had an improper appearance.
The STOCK Act could be much stronger. For example, the penalty for violating its reporting requirements is $200. That penalty could include numerous trades that were not timely reported, not necessarily $200 per trade. A veritable slap on the wrist.
On Sept. 19, 2024, the Washington Free Beacon , reported that U.S. Rep. Greg Landsman had failed to comply with the STOCK Act in connection with "more than 87" stock transactions since becoming a member of Congress. His first reported trade was nine days after he was sworn in. The most recent trade reported appears to be a June 20, 2024 transaction.
Simple math would say that the penalty should be the sum of $200 times 87 transactions, which is $17,400. It is anyone’s guess what "congressional math" will say, but it is likely to be much less if not altogether forgiven by the "bipartisan" Ethics Committee.
Landsman’s first Periodic Transaction Report (PTD) provides details about 91 transactions. It includes which stocks were traded and when, but only provides dollar ranges in terms of the value of the transactions. Landsman reported 83 transactions ranging in value from $1,000 to $15,000 and eight transactions ranging from $15,000 to $50,000. The corporate stocks were reported to be in "some of the most profitable companies of all time." In addition, they reportedly include corporations in industries that he has ardently criticized.
The PTD indicates that Landsman claimed capital gains of more than the $200 reporting threshold on 28 of the transactions. A cross-check with Landsman’s financial disclosure report is required to get a sense of his actual capital gains from his stock transactions.
New members of Congress must attend an ethics briefing within 60 days of taking office, which includes familiarization with the STOCK Act. A spokesperson for Landsman is reported to have said, "as soon as Greg learned of the transactions, he immediately reported them." There was no further explanation reported.
Unfortunately, some may say this is business as usual. But just a month after filing his delinquent transaction reports, Landsman issued a press release to announce his first television campaign ad. The press release states that he kept his promise to be a "new kind of national leader." It highlights his "refusal to accept Corporate PAC money;" that he is "fighting to ban members of Congress from using their position to get rich;" and his "commitment to reliable, transparent leadership."
To fix the situation, i.e., "walk the talk," Landsman could take several actions: donate $18,000 to charity; post his public annual financial disclosure reports, as well as all subsequent PTDs, on his social sites and websites; place his stock holdings in a blind trust to include his spouse; and finally, he could provide his constituents with a better explanation for his non-compliance.
Todd J. Zinser is a Cincinnati native and resides in West Price Hill. He retired as the Inspector General of the U.S. Department of Commerce after 31 years of conducting audits and investigations of federal officials, programs, and operations. He remains a certified fraud examiner.
This article originally appeared on Cincinnati Enquirer: Opinion: Landsman needs to explain why he failed to disclose stock trades
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