Senator Loeffler, Already Accused Of Pandemic Insider Trading, Will Convert All Individual Stock Holdings To Managed Funds
from the bit-late-for-that-now,-ain't-it? dept
Over the last few weeks there’s been tremendous attention paid to the prophetic timing of stock sales by two Senators: Richard Burr and Kelly Loeffler. Both of whom were insisting publicly that there was little risk associated with the coronavirus and COVID-19, while receiving important briefings in the Senate and quietly selling stocks in retail and travel companies before the market collapsed and — in Loeffler’s case — buying up stocks in remote work and hospital protective equipment suppliers. It all looks pretty pretty bad. Loeffler, from day one, has defended the stock sales, saying they were done by a third party and she wasn’t aware of them. However, the timing and the choices in stocks are still pretty head-scratching.
Loeffler, who is already one of, if not the, richest Senators, has now said that she and her husband (who runs the NY Stock Exchange) will convert all of their individual equity holdings to managed mutual funds. While some are reporting that she’s “selling” all her stock, it’s not quite that, because she’ll just be putting the proceeds into managed funds:
Loeffler, who is the richest member of the Senate, said in a Wall Street Journal opinion page article announcing her decision that her stock holdings would be converted to mutual funds and exchange-traded funds by third-party advisors who handle her investments.
The thing is, of course, that this gets back to the concept we’ve discussed before of soft corruption. Even if it turns out that it was “legal,” the fact that this kind of thing is okay is exactly what makes everyone else assume the game is rigged and corrupt. It makes people trust our institutions less, and that’s a huge problem. While it was only a few years back that Congress finally agreed that laws against insider trading should finally apply to elected officials, it seems troubling enough that elected officials own any individual stocks at all. The mere appearance of conflict is damning for a public official. There have been proposals that elected officials ought to be required to move any equity holdings into a blind trust that invests in mutual funds, without the official knowing what’s in their investment bucket — and stories like Loeffler’s only gives one more reason why that should be required.