U.S. Representative Katherine Clark (D-Melrose) and U.S. Representative Lori Trahan (D-Westford) both recently violated federal law on reporting stock transactions by missing deadlines.
Clark serves as the assistant speaker of the U.S. House, making her the fourth-ranking Democrat in the House. Earlier this month, she disclosed that she sold more than $100,000 worth of shares in the private investment advisor Ruan, Cunniff, & Goldfarb.
While there was nothing illegal with her doing so, lawmakers have 45 days to report on their securities trades. Clark didn’t obey that rule. She made the sale on January 31, 2021, and submitted a periodic transaction report on August 4, 2021 — more than six months after the transaction took place, as first reported by Forbes.
Trahan, who is in her second term in Congress, took even longer to report her transaction in question. She sold somewhere between $1,001 to $15,000 worth of stock in the software company Stella Connect on September 10, 2020. It wasn’t until July 9, 2021 — nearly 10 months later — that she submitted a periodic transaction report, as first reported by Business Insider.
Clark and Trahan’s actions violate the Stop Trading on Congressional Knowledge (STOCK) Act, signed into law by then-President Barack Obama in 2012. One section of that bill states that it “Amends the Ethics in Government Act of 1978 (EGA) to require specified individuals to file reports within 30 to 45 days after receiving notice of a purchase, sale, or exchange which exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities and subject to any waivers and exclusions.”
The law is designed to prevent insider trading by members of Congress, by forcing them to disclose purchases and sales of stock in a timely fashion.
Violations of this law are becoming increasingly common, and members of both parties are guilty of it.
The U.S. Federal Labor Relations Authority says that there is a $200 late-filing fee per late report. The agency has the power to waive the fee in “extraordinary circumstances,” according to its web site. It does not list a criminal penalty for violating the reporting deadline.
Press spokesmen for both Clark and Trahan could not be reached for comment on Sunday or Monday this week.
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