131 Federal Judges Broke the Law by Hearing Cases Where They Had a Financial Interest (wsj.com) 92
The Wall Street Journal: More than 130 federal judges have violated U.S. law and judicial ethics by overseeing court cases involving companies in which they or their family owned stock. A Wall Street Journal investigation found that judges have improperly failed to disqualify themselves from 685 court cases around the nation since 2010. The jurists were appointed by nearly every president from Lyndon Johnson to Donald Trump. About two-thirds of federal district judges disclosed holdings of individual stocks, and nearly one of every five who did heard at least one case involving those stocks. Alerted to the violations by the Journal, 56 of the judges have directed court clerks to notify parties in 329 lawsuits that they should have recused themselves. That means new judges might be assigned, potentially upending rulings. When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests.
the victims need to get free legal help for there (Score:3, Insightful)
the victims need to get free legal help for there new trail!
But are they friendly judges -- Rocky the flying s (Score:2)
s/there/their/g
s/trail/trial/
Sloppy writing even when the point might be interesting? Or just FP haste?
Too bad I'm not surprised by the story. Not even interested enough to RTFA and see the breakdown of where the crooked judges came from.
Even Daffy Duck the Scarlet Pimpernel, has lost hope?
How did they adjudicate the case? (Score:1, Interesting)
Re:How did they adjudicate the case? (Score:5, Insightful)
Isn't that the real question? If they showed a discernable bias, then we have a real issue.
What I would like to know is whether these were substantive violations. How many of these are 1% of an index fund, which is unfortunate and how many are a significant interest which is negligence at best?
Re: How did they adjudicate the case? (Score:3)
Re:How did they adjudicate the case? (Score:4)
Isn't that the real question? If they showed a discernable bias, then we have a real issue.
What I would like to know is whether these were substantive violations. How many of these are 1% of an index fund, which is unfortunate and how many are a significant interest which is negligence at best?
I, too, was wondering that point. I would guess that the 56 judges that directed their clerks to send the notices were judges that fall more under the unfortunate, insignificant interest. The other 75, I wonder why they didn't take any noted action.
Re: How did they adjudicate the case? (Score:3)
How many of these are 1% of an index fund
I don't think that matters. A decision producing a 20% gain in one's portfolio (for example) is the same whether they are the sole beneficiary or just a small shareholder.
Re: How did they adjudicate the case? (Score:4, Insightful)
Right but its not at all unusual for someone to have SPY, QQQ, and INDU all in the same portfolio. if you do than you have exposure to probably just about every stock on the domestic market.
Its basically a bet on US GDP growth! Which is generally a safe bet.
So does the fact that you have a 1000 shares of SPY of which say HBAN makes up 0.3% of; mean you can't hear a case that involves Huntington Bank? You have this tiny interest in HBAN's market value and no-ability to transact it directly you'd have to sell your index holding to get rid of it. We have to draw the line somewhere because so many of these securities are aggregated in other securities.
If we don't draw such a line than the only option is all Judges would have to have all their non-cash investments in a blind trust. If we are going to that than we'd be start with CONgress!
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The point of GP's post is that is no decision will make a significant gain (like 20% for example) in one's portfolio if the stock in question comprises 1% of an index fund the judge is holding.
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I'd also be curious how many had knowledge, up front, that they were a stake holder. If they have a retirement hedge fund, chances are EXTREMELY low they know the individual companies involved in the fund. I think I know two of the companies I technically own stock in due to my retirement fund. If any of the other companies were to come up in some aspect of my job I'd have zero idea.
Very likely they had knowledge (Score:4)
Maybe the Op was edited, but it's right in there: "About two-thirds of federal district judges disclosed holdings of individual stocks"
Holdings of individual stocks means direct ownership.
Given my retirement investment portfolio consists of a number of index mutual funds, if I was a judge hearing cases, odds are I own a smidge of the stock for any publicly traded company that I might have come before me. But I don't have a good grasp on just what those companies are, or how much of each I actually own second-hand through the mutual fund.
In this case, I think it's like knowing full well that I own $10k of microsoft stock, and MS vs Adobe is hitting my court.
That said, if I was a judge hearing such cases, I think I might consider whether to do "blind investment" like some POTUS candidates do, where they hire a manager who is deliberately told to not tell them what they own, in order to avoid bias.
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Given my retirement investment portfolio consists of a number of index mutual funds, if I was a judge hearing cases, odds are I own a smidge of the stock for any publicly traded company that I might have come before me. But I don't have a good grasp on just what those companies are, or how much of each I actually own second-hand through the mutual fund.
Was thinking that myself, I have some investments for retirement that own stocks in god-knows-what, every year I get a monster PDF that breaks it down into some larger invididual companies and then smaller funds with who-knows-what in them, but all I ever read is the first page because I really don't care about the breakdown minutiae, just the overall return. I expect it's the same for the judges, in some cases they'll have a clerk report every little entity they own a handful of shares in without even bei
Knowledge levels (Score:2)
Well, to be fair to the regulations, I don't think that they count pass-through vehicles like mutual funds. I know for my security clearance paperwork, for example, that they didn't care that I had money in the "I" fund for the TSP retirement program*, they only cared if I owned something foreign *specifically*, like say property in South Korea, or maybe South Korean Samsung stock.
Where it gets "unknowable", or at least unprovably knowable, is that you're also supposed to share what your relatives own as w
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Most likely none. The story covers an 11 year time span and the actual securities in index funds change over time.
You can find out what securities are in a fund today, but there is no repository that will tell you what was in them yesterday much less every change that took place in the makeup of the fund over 11 years. You might be able to get some of that information if you subpoena the fund management company but the Wall Street Journal can't get a subpoena just to write a story.
The judges in question d
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How many of these are 1% of an index fund, which is unfortunate and how many are a significant interest which is negligence at best?
The summary mentions... (emphasis mine)
About two-thirds of federal district judges disclosed holdings of individual stocks
...which would seem to preclude index funds, target date retirement funds, or others where the holder may not have as much insight into which specific stocks they own.
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Re: How did they adjudicate the case? (Score:2)
Re:How did they adjudicate the case? (Score:4, Insightful)
Isn't that the real question? If they showed a discernable bias, then we have a real issue.
Whether they showed bias is irrelevant.
If there is a conflict of interest then the judge should have been recused. Even if all their decisions appear to be fair, consistent failure to recuse should result in removal because that's the only way to get rid of the bad actors. For one thing to determine bias, what you're asking for is basically to conduct a retrial, and we don't want to do that. The big problem is that the parties to the case often have no way of knowing the judge's investments and business connections.
Re:How did they adjudicate the case? (Score:4, Informative)
It's right there in the summary, if you'd bothered to read it in your haste to post.
"about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests."
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about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests.
By itself, this doesn't prove a stock ownership bias because there may be other effects at play. E.g. if many of the cases were individuals vs. corporations, did rulings favor corporations in general (presumably the judges didn't own stocks in individuals)? And, the quoted figure appears to be a collective average, and some individuals may have had an ownership bias while others did not.
So, based on what is presented in the summary, bias isn't proven, but there is certainly cause for concern and furth
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Its hard to prove bias, people have different opinions, for proof see the whole internet. The point is we can't know what the judges biases are, I can't even be sure what my biases are, let alone someone else's. from https://www.psychologytoday.co... [psychologytoday.com]
Human beings are not always—in fact, probably not often—the objective, rational creatures we like to think we are. In the past few decades, psychologists have demonstrated the many ways people deceive themselves in the process of reasoning.
The key here is that we deceive ourselves so we are not even aware we are bias.
That is why there is the law in the first place, and you can prove that a judge presided over a case they had a financial interest in.
There is also the need for the justice system to
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Many of these were financial cases, where it's not as black-and-white as even violent crime cases.
You would have to, I think, consider not merely the broad 'guilty/not-guilty' decision, but more often the nature and extent of fines, reparations or recovery, and the possible criminal penalties paid or not paid by the defendants.
It's very different to fine a multi-billion dollar company $100,000 and let it go, than it is to find criminal liability and convict the principals of felonies, often denying them the
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When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests.
but I'm not sure how helpful that is.
The real point here is that more than 130 federal judges have violated U.S. law and judicial ethics, etc, but of course why wouldn't they? There are no consequences in getting caught doing it, so they'd have to be stupid to not do it.
So, where are the charges? (Score:5, Insightful)
If these judges broke federal laws, then where are the indictments? Or, do they just get to "retire early" like the Fed presidents who were just caught pumping stocks they owned using funny money they printed from whole cloth?
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If these judges broke federal laws, then where are the indictments? Or, do they just get to "retire early" like the Fed presidents who were just caught pumping stocks they owned using funny money they printed from whole cloth?
Agreed, although the two Federal Reserve presidents you're referencing technically did not break laws, unlike these judges. I can't tell if the WSJ actually cites specific law that was broken or anything as it's paywalled, but I presume they're not just throwing around the phrase, "violated U.S. law," while only meaning the judicial ethics issue.
Re:So, where are the charges? (Score:4, Insightful)
Seems to me like being fired and possibly disbarred should be the minimum punishment for a judge willfully violating the ethical responsibilities of their office. Once they've proven they're willing to do so, how can they ever be trusted in the future?
However, it sounds like the actual "punishment" was being encouraged to send an embarrassing memo. I really wish I was surprised.
Re:So, where are the charges? (Score:5, Insightful)
If these judges broke federal laws, then where are the indictments? Or, do they just get to "retire early" ...
They'll run for Congress so they can make some real insider-trading money ...
3 Members Of Congress Failed To Properly Disclose Up To $22 Million Of Stock Trades [forbes.com]
7 House Lawmakers Didn't Disclose Stock Trades [npr.org]
Re:So, where are the charges? (Score:4, Informative)
"If these judges broke federal laws, then where are the indictments? Or, do they just get to "retire early" like the Fed presidents who were just caught pumping stocks they owned using funny money they printed from whole cloth?"
Federal judges are appointed for life, and removing them requires impeachment by the House and trial in the Senate. That's not a trivial process.
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That's not a trivial process.
Yeah, I guess we should moderate our efforts to get rid of crooked judges, right? Should we *just relax and enjoy it* then?
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"Should we *just relax and enjoy it* then?"
Assholes and rats get paid good money for pretending that they do.
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Everyone working for the government is also paid by the government so no matter what political affiliation they all play for the same team and get paychecks from the same employer.
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From what I have read regarding one specific case the judge was not aware of the stock holdings— it was either a minor holding or a holding or a family member’s account that they were not aware of. Some review occurred and there was increased scrutiny of holdings.
If you or a family member own stock, there is a pretty good chance you would get caught by this, even if you acted impartially.
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I assume this is what you are talking about [cnbc.com]: Trading in stock while having an influence on monetary policy is pretty different from adjudicating a case in which you have a financial interest. Interest rates and the dollar supply affect everyone and all companies, so it would be tough to devise a policy that was beneficial to AAPL but not to MSFT or the general public. (Unless your critique is of the Fed is that it takes the side of capital, though even then inflating the money supply is good for debtors at
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I don't know I bet if I got to be fly on the wall at FOMC meetings I could do pretty well swapping in and out Treasury Bond ETFs, Foreign Currencies, MuniBonds, Cash, Bank Sector ETFs, and Domestic Index funds..
It would not make you millions over night but being able to take your correct guess rate swing trading funds covering those broad categories from say 45% of the time to 90% of the time would let hardworking active traders go from barely beating the market to steady double digit ROI on capital.
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Silly rabbit, laws are for peons.
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That's not how it works though. Once you (the federal prosecutor in this case) realize a law was breach, you have to gather evidence, build a case, and then decide whether to prosecute or not.
The article said that the "judges or family member owned stocks". That's potentially a very wide statement. Maybe your daughter bought 2 tesla stock 5 years ago; how would you know that? Maybe you bought some index funds that contains a company that you ruled on. Maybe the financial planner you work with recommended bu
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You don't (want) federal prosecutors going after cases they can't win. It is a waste of everybody's time. You want them to focus on cases where they can potentially make it.
I partially agree. In some cases there is merit to bringing cases that have middle to low chances of success in order to raise general public awareness.
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Perhaps these laws have no criminal penalties for violating them?
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And this is unusual because? (Score:2)
I simply assumed that this was the way things are around here these days.
Well how do they invest then? (Score:5, Insightful)
I can't prove it, and no one can, but just how many of these cases were people not even realizing what connection they might have had with the stock involved? Do you really think these judges did it on purpose? I don't.
So how does a simple system that is automatic and doesn't require a ton of time to manage get put in place that DOESN'T add a ton of overhead or cost? Like some sort of web application that tracks all their investments and compares them, realtime, and then highlights (publicly) any potential conflicts.
Re: Well how do they invest then? (Score:2)
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You don't, if you can't police your own conflicts of interest.
I know a couple of people high up in the business consulting world. They touch so many companies and see so much internal information that they can't easily invest in the stock market without running into conflicts of interest. Therefore, they largely stay out of it and instead invest in art, which has good returns on top of bringing them joy.
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Buddy of mine is similar, though only because he doesn't understand stocks, has habits of picking bad companies to invest in, etc.
So his retirement fund is a bunch of classic cars and machine guns. The machine guns have consistently beat the market and various indexes since he got into them 30 years ago....
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Do you really think these judges did it on purpose? I don't.
Agreed that it would be easy to be unaware of ownership. I'm not sure that implies that all 131 were unaware. I think the appropriate response to an identified conflict is for a prosecutor to assess the details of it for criminal intent. And that our justice system will be better if we hold judges to a high standard.
So how does a simple system that is automatic and doesn't require a ton of time to manage get put in place that DOESN'T add a ton of overhead or cost?
Great question! Seems like a brokerage could offer a service of cross checking a client's portfolio against a given stock ticker. It would take some work to set up, but would be valuable to
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In practice it would be really difficult to implement correctly. Not because of the technical reasons, but because everybody owns everything in practice.
If you are a judge in California, chances are your are part of CalPers. And CalPers invests in tech company stocks. So, if we really want to avoid conflict of interest, no judge in California should be looking into any tech company, since those stocks could be held by their retirement account, today or possibly in the future.
This would be absurd, so that is
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The summary indicates that these were actual stocks owned, not portions of funds. So that should be significantly easier to sort out. And we aren't talking about day traders here who are buying and selling stocks constantly all day. These are most likely people that make investment decisions pretty rarely and should have an easy time of maintaining a list of businesses that they are invested in and should avoid presiding over in their court.
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According to the Forbes version of this article (https://www.forbes.com/sites/graisondangor/2021/09/28/over-100-federal-judges-heard-cases-despite-conflicts-of-interest-report-says/?sh=4a4261804ae6):
"In 21 cases, a judge or family held more than $50,000 in stock of a company involved in the litigation, while in 173 cases the holdings were higher than $15,000."
And with about two-thirds of the cases being ruled in a favorable judgement to the judge, it makes it more l
Re: Well how do they invest then? (Score:2)
Can you rule out subconscious influence? I can't. This is why such conflicts of interest must be avoided, instead of claiming integrity. Ideally, yes, it shouldn't matter. Realistically, it's a different matter.
Meaningless number (Score:5, Insightful)
When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests.
I have to complain that this is an utterly meaningless number unless we are also what fraction of rulings on motions were favorable on similar cases in which they did not hold stock.
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I both agree and disagree. If they consistently made the same favorable rulings to corporations they had no financial interest in, is that a good thing or a bad thing? They are supposed to be impartial - but that would not be the case.
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They are supposed to be impartial - but that would not be the case.
And I both agree and disagree with you. I agree that a general bias in favor of corporations is undesirable (for me as an individual, at least). I disagree the rulings prove impartiality.
They suggest it. But, one would also need to consider whether, on average, the sides have equal merit. E.g. Does lobbying produce laws favoring corporations? Do corporations tend have better lawyers? Are some cases brought against corporations frivolous? It seems like there are a lot of opportunities to skew the ru
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I have to complain that this is an utterly meaningless number unless we are also what fraction of rulings on motions were favorable on similar cases in which they did not hold stock.
Your statement is meaningless. Every ruling is in favor of one side of the argument or the other. The two-thirds in the article hints at a bias towards the side the judge has an interest in but is also very misleading. I suspect that more than 2 thirds of these cases the dispute is between a party that does not have stock and a publicly traded company. Better tests for bias are when there are two publicly traded companies how often does the judge rule in a way that benefits him and when only one of the
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Better tests for bias are when there are two publicly traded companies how often does the judge rule in a way that benefits him and when only one of the parties is publicly traded how often does the judge rule in favour of the publicly traded company.
but then you can argue a judge is more likely to have shares in a large company, but small companies are not going to have as expensive lawyers, (put other reasons why large companies would win more often here).
Yes the statement can is misleading, but the fact that it can be seen as bias is a problem in itself. As a side note being able to afford better lawyers should not mean you are more likely to get a better outcome, but that is what I believe is the main driver behind the injustice of the legal system
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I would further note that one of the factors of a successful company would be, in general, to not routinely end up on the wrong side of lawsuits.
As such, companies are more desirable to invest in, and *anyone's* stock portfolio is likely to see at least *some* bias, above 50%, in such rulings.
*how much* I can't tell you, whether wearing my economist, lawyer, or statistician hats.
Also, there are a significant number of junk suits looking for a jackpot against corporations; these would also be expected to ca
I'm schocked (Score:2)
https://www.youtube.com/watch?... [youtube.com]
Seriously though, we need a law that forces office holders to (in some manner) divest themselves of all investments other than things like index funds.
What about family businesses? Especially divest of those for any office that has a lifetime appointment. If you want to be a judge, then be a judge.
Being an administrative law judge in the USA is one of sweetest deals you can get; most people don't even know they exist.
IMHO, judgeships should have a limit of something like ten
What about mutual funds? (Score:2)
Re:What about mutual funds? (Score:5, Insightful)
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No one is above the law.. (Score:2)
While it's possible that some of these judges may be innocent, or did not conduct themselves in an unprofessional or biased manner in their cases, it does not mean they are above the law. Someone who runs over a person trying to commit suicide is still charged with manslaughter and due process still rolls. I say the same thing for politicians on both sides, or all sides of the isle.
Judges, especially, should know better. And when they realize they've made a mistake, they should bring that issue forward a
The DOJ and federal bench is (Score:1)
Just checking (Score:2)
Is Clarence Thomas one of the 131?
His conflicts of interest have been well documented for years and equally well ignored.
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Does he have a conflict of interest, he never said anything to me.
This is for people who don't know that he doesn't ask many questions during trials, i.e. he never says anything.
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Although he doesn't speak in court often that part is not important. It has to do with when he writes and participates in rulings. Including some where his wife realizes financial gain as the result of the decision.
How this is tolerated is beyond me.
"Justice" for Profit (Score:4, Interesting)
(see https://news.law.fordham.edu/j... [fordham.edu])
Thus any judge, prosecutor, police officer or even jury member is in conflict of interest if they have stock in either of the two main companies that run prisons
Is it any wonder that the US has the highest incarceration rate in the world?
(see https://worldpopulationreview.... [worldpopul...review.com])
If you want to know who the corporations are:
https://www.marketscreener.com... [marketscreener.com]
https://www.marketscreener.com... [marketscreener.com]
Profit for Prison Unions too (Score:4, Insightful)
I'd argue that this is actually less of a factor than the prison unions for guards, which regularly campaigns, quite visibly, for tougher(IE longer) sentencing.
More people in prison means more jobs for prison guards, more job security, and all that.
Bureaucrats, Judges and Politians (Score:2)
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Judicial System (Score:1)
business as usual (Score:2)
"When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family's financial interests."
If you think that is bad, wait until you get the results of the rulings on motions that came down in favor of their political or ideological interests!
"Texas has not demonstrated a judicially cognizable interest in the manner in which another State conducts its elections"
VTSMX (Score:3)
Johnson? (Score:2)
There are still judges around that were appointed by Johnson? He left office over 50 years ago!
US judges breaking the law? (Score:1)
How can this be, everyone knows the US legal system is the fairest most unbiased legal system in the world, my world is shattered.
Non-paywall version (Score:2)
https://www.forbes.com/sites/graisondangor/2021/09/28/over-100-federal-judges-heard-cases-despite-conflicts-of-interest-report-says/?sh=4a4261804ae6
Corruption (Score:2)
That's why they call it corruption - it starts off small and seemingly harmless, but the rot sets in and is hard to remove and therefore only increases.
Justice is a public process and needs to be both clean and seen to be clean. No wonder the US is in decline, as every other empire in history, as they normalize corruption.
News for nerds ? (Score:1)
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Shopping for judges (Score:2)
It seems to me that this is similar to other memes on slashdot.
1. Find a judge you like.
2. Send him 10,000 shares.
3. Present your case.
4. Profit!
The Powerful Can Do No Wrong (Score:1)
Only dirty, poor people are capable of possessing the mens rea that necessitates punishment.
More government corruption (Score:1)
Thucydides (Score:2)
"Who's right doesn't matter, who has the power does" --Thucydides (b. 400 BC)