131 federal judges failed to recuse themselves from cases in which they had financial interest

[Kid Berwyn]

131 federal judges failed to recuse themselves from cases in which they had financial interest: report

BY MONIQUE BEALS
The Hill (from WSJ)- 09/28/21

One hundred and thirty-one federal judges oversaw court cases involving companies in which they or their family members owned stock, according to a new investigation.

Those judges violated U.S. law and judicial ethics as they failed to recuse themselves from a total of 685 court cases in which they may have had a conflict of interest, an investigation by The Wall Street Journal found.

In those cases, about two-thirds of the rulings were in favor of the financial interests of the judge, the Journal reported.

Snip…

After the Journal notified the judges of its findings, 56 of them began to alert parties involved in 329 of the lawsuits of their conflict of interest.

Continues…

https://thehill.com/regulation/court-battles/574244-131-federal-judges-failed-to-recuse-themselves-from-cases-in-which

[Firestorm49]

1. The result being?

I, for one, am sick and tired hearing about one atrocity after another going seemingly unpunished. Yes, I know the wheels of justice turn slow, but there’s a good chance that they would turn faster if the public 1) became inundated and informed by the MSM on a regular basis and 2) if we had a more adequate number of prosecutors to punish those who regard the law as something only for the “ little guy” and not themselves.

We hear this garbage occasionally and rarely see the resultant repercussions. It’s almost like they feel it’s worth the risk.

[jimfields33]

2. Until congress members get out of the stock buying selling business

I could not care less that judges are doing the same as congress.

[Escurumbele]

13. The judges can buy stocks, but they must recuse themselves, otherwise there is no justice

Well, justice only works for those who control it...

[Tomconroy]

3. It's called Robeitis among those of us who had to deal

With people in black nightgowns on a day to day basis.

[StarfishSaver]

4. This is interesting

I do wonder about one thing in the reporting. The story refers to "family members" owning stock. However, the Code of Conduct requires recusal only if the judge, their spouse or family in their household has a financial interest. I wonder how many of the family members they referred to actually fell under this and how many didn't.

[pnwmom]

5. Good question. I doubt many people know what all their siblings have invested in. nt

[StarfishSaver]

7. True

I don't really trust The Hill's reporting on anything - they're often biased and sloppy. I hope they didn't fudge this and make it seem like more judges violated the Code of Conduct than actually did. If any did violate it, of course, they should be held to account. But I wonder how many who did nothing wrong got caught up in this story.

[monkeyman1]

8. very true ! the hill & politico I don't even bother with !

[pnwmom]

9. It turns out the article was based on a WSJ report. And that report defines family.

So unless the WSJ reporter decided to extend the definition further, this doesn't look very good.

https://www.wsj.com/articles/131-federal-judges-broke-the-law-by-hearing-cases-where-they-had-a-financial-interest-11632834421?mod=hp_lead_pos5

Nothing bars judges from owning stocks, but federal law since 1974 has prohibited judges from hearing cases that involve a party in which they, their spouses or their minor children have a “legal or equitable interest, however small.” That law and the Judicial Conference of the U.S., which is the federal courts’ policy-making body, require judges to avoid even the appearance of a conflict. Although most lawsuits don’t directly affect a company’s stock price, the Supreme Court in 1988 said the law’s purpose is to promote confidence in the judiciary.

Conflict-of-interest rules are common for state and federal employees as well as for lawyers, journalists and corporate executives. U.S. government workers may not participate “personally and substantially” in matters in which they have a financial interest.

The Journal reviewed financial disclosure forms filed annually for 2010 through 2018 by roughly 700 federal judges who reported holding individual stocks of large companies, and then compared those holdings to tens of thousands of court dockets in civil cases. The same conflict rules apply to criminal cases, but large companies are rarely charged, and the Journal found no instances of judges holding shares of corporate criminal defendants in their courts.

It found that 129 federal district judges and two federal appellate judges had at least one case in which a stock they or their family owned was a plaintiff or defendant.

[StarfishSaver]

16. Thanks

The WSJ article is much more comprehensive.

[Lucky Luciano]

11. I'm more interested in there being a genuine conflict.

Owning $20,000 of one stock that might get a 10% pop from a favorable ruling is only $2,000 - a rounding error that I wouldn’t get worked up over given the relative infrequency with which judges could act in their own favor.

[NullTuples]

6. Weird coincidence: that's approximately the number of seats McConnell blocked Obama from filling

[bucolic_frolic]

10. I assume they mean direct ownership of shares

Mutual funds, ETF's and index funds could cast a very broad ownership conflict. If you're diversified across asset classes, countries, market sectors, you might own more than half the stocks in the world if you own more than a dozen funds.

[PhylliPretzel]

12. Blind trust??

Isn't the solution to the problem of conflict of interest a requirement that judges, congress critters, and others whose professional decisions might be tainted by their personal financea must put their investments into a blind trust?

[ananda]

14. How many R's v. D's?

???

[nuxvomica]

15. Do they name the judges?

I can't access the WSJ article.

[euphorb]

17. It's worth looking at the actual text of the Judicial Code of Ethics.

The text can be found here: https://www.uscourts.gov/judges-judgeships/code-conduct-united-states-judges

Two points are important:

(i) the Code says that its provisions are to be applied "in the context of all relevant circumstances";

(ii) disqualification is required if the judge "has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be affected substantially by the outcome of the proceeding." Thus, even if the judge owns stock in a company that is a party in the lawsuit, disqualification is not required if the outcome, whatever it may be, would not SUBSTANTIALLY affect the judge's financial interest. There must be many cases in which the outcome would not affect the stock value at all, much less substantially.

By the way, the Code also says specifically that ownership of stock in a mutual fund or similar instrument is not a financial interest that would require disqualification.

So, simply matching reported stock holdings of judges with parties in their cases likely far overstates any actual wrongdoing.

[SWBTATTReg]

18. Perhaps these conflicts of interest need to be looked at in more detail, as more and more

widespread ownership of stocks occur across the land, and funds pretty diversify themselves in order to insulate themselves from market shocks, ownership of stocks become more widespread (and companies continue to buy and expand their ownership of stocks via acquisitions, e.g., one company may buy a company that owns 10 companies, and all of a sudden, a judge owns stock in that entity, etc.)).

It's becoming harder and harder to keep one disinterested in one's performance of their assets, be it in stocks or bonds or whatever, because companies continue to enhance their performance by buying top notch companies, etc. Perhaps a blanket ownership via a transfer of assets into a blind trust is needed automatically?

[Slammer]

19. imbalance

It could be an interesting backdoor route to replace the obscene number of Republican-appointed judges currently on the bench.

I have absolutely no problem with a sitting president and his party appointing people who will act impartially to judgeships, even if that person has a partisan affiliation.

But I have an extreme problem with Senate leadership refusing to consider confirming appointments in hopes that they can stall things out until a more friendly administration gets into power.

Even if the judges in question in these cases weren't put in place due to such questionable practices, this would be a good opportunity to address any imbalance which was created by unethical Senate leadership practices.