Over the last few weeks, we have seen President-elect Donald Trump select
a number of remarkably wealthy and seasoned financial investors as members
of his Cabinet and sub-Cabinet. Government Executive turned to federal
employment attorney Debra D'Agostino for insight into whether or not
the 2012 STOCK Act may dissuade some of these investors from accepting
a White House position.
The Stop Trading on Congressional Knowledge ("STOCK") Act was
put in place to prevent federal employees from insider trading. Since
2012, however, the law has seen a number of revisions that limit the scope
and specificity of its restrictions. Because of these changes, Attorney
D'Agostino remains skeptical whether or not any investor entering
the new administration's Cabinet will take the law seriously.
"I can’t fathom how this is going to deter anyone from much
of anything since disclosure is not really enforced," she told Government
Executive. Experts agree that the original draft of the law would pose
a serious issue for some investors, but now that it’s been blunted,
even the Obama Administration seems to have deprioritized enforcement.
Attorney D'Agostino reiterated, however, that an assumed lack of enforcement
does not mean that serious complications are unlikely to arise. "[The
STOCK Act] offers very little guidance on how insider trading laws for
disclosure in the financial world apply to the government world,"
she explained. "In this day and age when the president tweets, what
is the line between public and private information? It’s difficult
for the SEC to determine what piece of information or proof was material
to any trade."
She also points out the President-elect himself has yet to take precautions
to prevent financial conflicts of interest-- such as setting up a blind
trust for his assets. "It would be hard for the public to expect
those below him to adhere to higher standards than he is holding himself
to," she said. "We’re in uncharted territory."
You can read more of Attorney D'Agostino's insight in "Trump's
Top Nominees Unlikely to Be Deterred by STOCK Act" at the
Government Executive site.