Slaughter Pushes for Investigations into Republican Stock Trading Scandal Following Explosive New Report
WASHINGTON, DC — Congresswoman Louise Slaughter (NY-25) has asked the Securities and Exchange Commission, the acting U.S. Attorney for the Southern District of New York, the House Committee on Ethics, and the Office of Congressional Ethics to investigate the major stock trading scandal among House Republicans uncovered in an explosive new report today. The report bolsters allegations of insider trading by Congressman Chris Collins (NY-27) and a growing number of Republican colleagues and confirms that Collins used taxpayer-funded government resources for personal gain – a clear violation of House rules. To date, at least eight current and former Republican members of the House of Representatives, as well as spouses, children, and staff have invested in the same small Australian biotech firm in which Congressman Collins is the largest shareholder and board member.
“Upholding the public trust is the most sacred responsibility we have as members of Congress. I led the six year fight to get the STOCK Act signed into law after learning that members of Congress and their staffs were abusing their positions by making money through their taxpayer-funded jobs. The story today is truly shocking and makes it clear that some members of Congress are embroiled in a major stock trading scandal that violates the public trust and likely the law. That’s why I’m calling for thorough investigations by the SEC, the U.S. attorney, the House Committee on Ethics, and the Office of Congressional Ethics. The public needs to be able to trust we are working on their behalf and are not out to enrich ourselves,” said Slaughter.
Slaughter authored the STOCK Act in 2006 to ban insider trading by federal officials, including members of Congress. After her six year fight and a groundswell of public support following a 60 Minutes investigation, the legislation was passed and signed into law on April 4, 2012. The bill prohibits insider trading by members of Congress, their staff, and other government employees and requires groundbreaking new disclosures that shine a light into the trading habits of public officials, including a requirement for members of Congress to file Periodic Transaction Reports of every sale or purchase of a stock within 30-45 days of a trade. The law is intended to bar members of Congress from also taking part in IPOs not available to the general public regardless of the location of the company.
Slaughter has already called on the SEC to conduct a complete investigation into the questionable stock trades made by Collins and has introduced legislation to strengthen the STOCK Act. The bill would close the ethics loopholes Collins has taken advantage of to purchase exclusive stock deals not available to the general public and take part in initial public offerings (IPOs) outside the United States.
Congressman Collins is the largest shareholder of Australian pharmaceutical company Innate Immunotherapeutics, Ltd. and serves on its board by utilizing a loophole in House ethics rules. It has recently come to light that Collins bought $2.2 million worth of stock in that IPO that Innate conducted on the Australian Stock Exchange in 2013 but did not signify that the purchase was an IPO in filings to the House Ethics Committee that are required under the STOCK Act. Innate Immunotherapeutics held a private placement offering in August 2016. Collins, along with then-Rep. Tom Price, participated in that offering. Collins alone purchased four million shares priced below market value. In addition, the 21st Century Cures Act was within the jurisdiction of the House Energy and Commerce Committee, on which Collins serves on its Health Subcommittee. It was later passed by Congress and signed into law in December, and the stock of Innate Immunotherapeutics tripled.
The new report released today uncovered that half a dozen Republican colleagues say Collins tipped them off about the money they could make through investing in Innate Immunotherapeutics and pushed them to do so. It follows reports that Collins recently made a series of questionable statements suggesting he may have given stock advice to numerous people. Reporters recently overheard Collins in the Speaker’s lobby asking, “Do you know how many millionaires I’ve made in Buffalo the past few months?”
It was reported in April that five additional members of Congress – Congressman Mullin, Congressman Lamborn, Congressman Long, Congressman Culberson, and Congressman Conaway – made purchases in Innate Immunotherapeutics.
Slaughter was the first member of Congress to call on the Securities and Exchange Commission (SEC) to conduct a complete investigation into questionable stock trades by Collins and Health and Human Services Secretary Tom Price when he was a member of the House of Representatives. Filings required under the STOCK Act show that while serving in Congress, Sec. Price made hundreds of stock trades since those disclosures first became mandatory in 2012, including reported transactions involving stocks of 40 different companies in the health care sector. As former chairman of House Budget Committee and member of the House Ways and Means Subcommittee on Health, Sec. Price was privy to information not available to the public.
In letters to the SEC, Slaughter highlighted the fact that these trades by Collins and Price were made and often timed to achieve significant earnings or avoid losses, drawing into question whether these transactions were triggered by insider knowledge.
In April, Slaughter pushed U.S. Attorney General Jeff Sessions for answers regarding the firing of former U.S. Attorney for the Southern District of New York Preet Bharara. Recent reports suggest President Trump reversed course and fired Bharara, who was reportedly overseeing an investigation into the questionable stock trades by Secretary Price. Slaughter also separately asked Acting U.S. Attorney for the Southern District of New York Joon Kim to continue any investigation already underway until all the facts are uncovered.