Showing posts with label Ethics. Show all posts
Showing posts with label Ethics. Show all posts

Monday, March 2, 2026

Word of the Month for March 2026: Fake News

I know you've heard the term Fake News.  It was Trump's rallying cry for several years and he says it whenever any news organization reports something he really (or marginally) doesn't like.

That's not what we're talking about here.  

What I'm looking at here are those cases where the plaintiff (or defendant) is being castigated by the press notwithstanding the fact that the plaintiff (or defendant) in a real case actually has a legitimate claim but the press is pushing the narrative against that of the defendant (or plaintiff).

So, let's dispense with pleasantries and define Fake News in this context.

FAKE NEWS constitutes a subset of intentionally or negligently disseminated pseudo-journalistic content, characterized by the deliberate fabrication, distortion, or strategic omission of verifiable empirical data, disseminated via digital or traditional media channels under the guise of legitimate reportage, with the intent or foreseeable consequence of influencing cognitive biases, socio-political perceptions, or behavioral responses within target populations, thereby undermining the epistemological integrity of information ecosystems and the democratic discourse reliant upon them.

Ummmmmm, sorry about that.  My inner-journalist generator took over for a second.  Let's try that again:

FAKE NEWS is false or misleading information presented as news, typically to influence public opinion, generate clicks, or cause confusion.


OK, that's better - a story used to generate or cause confusing information - sounds about right.

So, how might this apply in real life?  Remember a few years ago, the media flipped out on a story about a bunch of kids and some Indians marching in D.C.?

In January 2019, Nick Sandmann, a Covington Catholic High School student, was filmed wearing a MAGA hat while standing face-to-face with Native American elder Nathan Phillips during the March for Life in Washington, D.C. A short video clip went viral, with media outlets and social media users accusing Sandmann of mocking or intimidating Phillips.

Later, fuller video footage showed that Sandmann was standing silently and that Phillips had approached Sandmann, while a different group (Black Hebrew Israelites) was yelling insults at the students.

Sandmann filed defamation lawsuits against major media outlets (CNN, Washington Post, NBC, etc.), claiming the coverage was "false and damaged his reputation." Several settlements were reached and Sandmann’s case became a key example in debates over media bias, viral outrage, and defamation.

See, that's what we're talking about.  Instead of reporting the actual events, news media is going around reporting lies and misstatements - instead of what is actually happening.

Another example?  

Recently, a Minnesota family, the Moedings, were sued by their neighbors, the Ramoses, over the location of their basketball hoop and the subsequent retrieval of balls that bounced into the Ramos' yard.  The lawsuit, which included claims of trespass and a request for an injunction to prevent the hoop's use, was ultimately dismissed by a judge. 

On first read (and media makes it look like), this sounds like a petty case where an older couple is trying to keep kids from using their (clearly) portable basketball hoop.  However, this case had little to do with basketball as much as the Ramoses were trying to keep the kids from trespassing on their land.  

See, the kids would play on their side of the property line but, as kids are wont to do, the ball would get away from them, bounce/roll to the Ramoses property and the kids would run across the property line trampling grass, flowers, whatever else is in their way to get their ball.

From a property owner standpoint, that would piss me off and if you know anything about getting old and how little things really annoy, it really rakes the nerves.  Anyway, the court eventually dismissed the case leaving the Ramoses little recourse but to sit and fume.  

While an easy remedy would be to have the Moedings install a net/fence behind the basketball hoop to keep the balls on their side of the property line - but that would be admitting fault. 

Some other cases found in the annals of history include: 

Richard Jewell - Atlanta Olympic Bombing (1996)
Plaintiff: Richard Jewell (security guard wrongly suspected).
Claim: Defamation against media outlets (NBC, Atlanta Journal-Constitution, CNN).
Media narrative: Initially pushed the FBI and law enforcement leaks implying Jewell was the bomber.
Reality: Jewell was innocent and later cleared, but the press framed him as seeking attention.
Outcome: Jewell settled with NBC and CNN; won undisclosed settlements.
Press alignment with defendant narrative: The FBI’s suspicion narrative was amplified despite thin evidence, harming Jewell’s life while media framed him as the villain.

Gibson’s Bakery v. Oberlin College (2019) 
Plaintiff: Gibson’s Bakery (family bakery in Ohio).
Claim: Defamation and tortious interference.
Media narrative: Many outlets leaned toward framing the bakery as racially discriminatory after an incident with Black students.
Reality: The students had shoplifted; evidence showed no racial discrimination.
Outcome: Jury awarded $44 million (later reduced to about $25 million) to Gibson’s Bakery.
Press alignment with defendant narrative: Several academic and progressive outlets pushed Oberlin’s framing that the bakery was targeting students based on race, despite facts supporting Gibson’s position.

Rolling Stone “A Rape on Campus” Defamation (2016)
Plaintiff: Nicole Eramo (UVA dean) and fraternity members.
Claim: Defamation over false rape allegations reported in Rolling Stone.
Media narrative: Rolling Stone and supporting outlets pushed the narrative of institutional coverup and fraternity violence.
Reality: The story was fabricated; no evidence supported the claims.
Outcome: Eramo won $3 million; fraternity settled for $1.65 million.
Press alignment with defendant narrative: Rolling Stone and sympathetic media initially defended the article despite growing evidence of its falsehood, framing plaintiffs as silencing victims.

Duke Lacrosse False Allegation (2006–2007)
Plaintiff: Three lacrosse players—Reade Seligmann, Collin Finnerty, and David Evans
Claim: Defamation of false rape allegations reported by CBS News.
Media narrative: In March 2006, Crystal Mangum, an exotic dancer hired to perform at a Duke University lacrosse team party, was raped by the three boys.
Reality: The story was fabricated and in December 2024, Mangum publicly admitted on a podcast that she had fabricated the rape allegations.
Outcome:

  1. Prosecutor Mike Nifong aggressively pursued the case but withheld exculpatory DNA evidence.  
  2. On April 11, 2007, North Carolina Attorney General Roy Cooper dropped all charges.  
  3. The team’s season was canceled. 
  4. Coach Mike Pressler was fired.
  5. Nifong was later disbarred and convicted for misconduct.  
  6. The players sued Duke and the city, reaching settlements. 
  7. Mangum never faced charges for the false claims.  
  8. Nifong served a day in jail for contempt.

Press alignment with defendant narrative: The charges triggered intense media coverage and national outrage, with debates over race, class, and campus culture fueling the story.

I guess the moral to this story is: Take everything big media says with a grain of salt realizing that the press is in the game to make money.  

...and, as it appears, the only way the Press can make money is to make-up stuff to stir up the blood of their victims (in this case, victim=anyone willing to listen).

Monday, February 2, 2026

Word of the Month for February 2026: AI

 

OK, OK, so "AI" is not, per se, a word so much as it is an acronym for "Artificial Intelligence."

Great and with that out of the way, what is AI (or artificial intelligence)? 

An overly complex definition of AI is: Artificial Intelligence (AI) is a multidisciplinary domain within computer science and cognitive science that involves the design, development, and analysis of computational systems capable of performing tasks traditionally requiring human cognitive processes such as perception, reasoning, learning, decision-making, and natural language understanding. It encompasses the creation of algorithms and models that enable machines to acquire representations of their environment, generalize from data, adapt to new information, and exhibit goal-directed behavior under varying conditions of uncertainty. AI draws on subfields including machine learning, knowledge representation, heuristic search, and robotics, leveraging statistical methods, neural architectures, and symbolic reasoning to enable autonomous or semi-autonomous systems to optimize actions in complex, dynamic environments while adhering to constraints defined by computational, ethical, and social considerations.

Got all that?

In more simplistic terms, AI is basically a fancy robot brain that tries to fake being smart so you don’t have to be.

That better?

Essentially, Artificial Intelligence is like building a mechanical apprentice that learns by watching, listening, and practicing, just as a human would, so it can help us carry out tasks.

For example:  Imagine teaching a child to sort laundry by colors: you show them examples, correct mistakes, and eventually, they learn to do it on their own.  AI works similarly, but instead of a child, it’s a computer system that learns from examples, patterns, and feedback so it can make decisions, recognize speech, translate languages, or drive a car.

It’s not truly “thinking” like a human, but it mimics parts of human learning and decision-making to help us do things faster, more consistently, and often on a much larger scale.

Still unclear how it works in "real" life?  

Say you're looking to write draft a professional resume for a sales professional (selling cars) and where you only have a few key skills that might be useful and you've worked at McDonald's slinging burgers for the last few years.

AI can crank a really nice one page resume, based on those parameters, for you.  Of course, I'd suggest you take the time to make small edits - but it will look sharp.

Maybe the resume you submitted above landed you an interview in front of 21 people.  While only 4 people asked you questions, you still need to send a thank-you letter to all 21 people.  I've done this and it took me 4 days to make each one a little different but relatable using notes I took during the interview(s).

AI can crank out those 21 unique and professional letters just based on their titles alone and do it in under 2 minutes flat and make you look like a superstar.

Maybe you're a lawyer and you need help with your lawyer stuff.  How might AI help you?

  • Streamlined Legal Research:  AI can quickly analyze vast amounts of legal data, identify relevant precedents, and suggest potential arguments, saving lawyers significant time and effort. 
  • Automated Contract Review:  AI tools can scan contracts for key clauses, potential risks, and inconsistencies, accelerating the review process and improving accuracy.
  • Enhanced eDiscovery:  AI can help manage and analyze large volumes of data during litigation, identifying relevant information more efficiently and reducing costs associated with discovery. 
  • Improved Risk Assessment:  AI-powered tools can analyze historical case data and predict potential outcomes, enabling lawyers to better advise clients and mitigate risks.
  • Drafting Legal Documents:  AI can assist in drafting initial versions of motions, briefs, contracts, and other legal documents, saving time and improving consistency.

Heck, I used to consult for Anylaw.com where AI is a huge part of it.  In fact, Anylaw.com uses AI to generate the holdings for each case searched.  

Pretty slick!

Anyway, and as all of that looks great, a HUGE drawback with using AI (particularly in law) in the generation of legal documents is that AI tools, particularly generative AI, can sometimes produce inaccurate or fabricated information (hallucinations), requiring careful human review.

 
Wait, what?
 
Yeah.  There are a plethora of examples where lawyers used artificial intelligence search engines to find cases or even write whole briefs only to find out later that the cases cited therein don't exist.
 
For example:  

Say a lawyer uses an AI tool (like ChatGPT OR Microsoft Copilot OR Google Gemini OR Chatsonic OR Grok OR any AI legal assistant) to draft a legal document. The AI is asked:

“Provide cases supporting the argument that emotional distress damages are recoverable in breach of contract cases in Utah.”

The AI responds with:

“Yes, see Smith v. Jones, 456 P.3d 789 (Utah 2019), where the Utah Supreme Court held that emotional distress damages were recoverable in a breach of contract case.”

However:

  • Problem: Smith v. Jones does not exist.  Well, it might exist somewhere but not with that citation or set of facts or holding or, even at all.  In this example, the AI generated a citation that sounds real but is entirely fabricated (“hallucinated”), including a made-up volume, page number, and holding.

  • The AI pulled patterns from similar cases but created a false case to fit the prompt.

  • If the attorney includes this citation in a filed brief, Attorney could (and probably should) face serious court sanctions, reputational damage, and ethical violations under ABA Model Rule 1.1 (Competence) and Rule 3.3 (Candor Toward the Tribunal).

Can you say oops?  

Two real-world examples of attorneys using hallucinated cases from AI engines include Mata v. Avianca, Inc. (S.D.N.Y., 2023) (aka the “ChatGPT Case”).  I know I've already blogged about this case in an earlier post but it's fun to talk about this stuff and these guys were really reckless.
 
In this case, attorneys Steven A. Schwartz and Peter LoDuca of Levidow, Levidow & Oberman used ChatGPT to draft a brief in a personal injury case against Avianca Airlines.
 
The brief included six non-existent cases generated by ChatGPT, such as: Varghese v. China Southern Airlines, Martinez v. Delta Airlines, and Miller v. United Airlines.

The attorneys asked ChatGPT if the cases were real, and ChatGPT falsely assured them they were, even providing fabricated excerpts.

Thing is, had they just Shepardized the cases, they would have discovered the discrepancies and avoided the penalties of being sanctioned with a $5,000 fine and ordered to notify the real judges falsely cited in their brief

In the second REAL case of Park v. Kim (N.Y. Sup. Ct., 2023) – (aka the "Second ChatGPT Sanction Case"), a lawyer in New York used ChatGPT to draft an opposition brief in a personal injury case.  

The brief included false citations to non-existent cases.  Opposing counsel flagged the citations as untraceable. The lawyer admitted to using ChatGPT without verifying the citations (i.e. he didn't Shepardize the cases).

In this second case, the court issued sanctions against the attorney and the lawyer was ordered to pay legal fees to opposing counsel and faced professional embarrassment (basically, he was laughed at all all future bar meetings).

Other cases where attorneys used A.I. to improperly draft legal documents (and were caught) include:

1) United States v. Hayes

  • Jurisdiction: U.S. District Court, Eastern District of California (2005)

  • What happened: A defense lawyer submitted a motion containing a fictitious case and quotation that appeared to be AI-generated. The court ordered the attorney to pay $1,500 and circulated the ruling to local bars and judges.

2) Butler Snow Attorneys (Disqualification Order)

  • Jurisdiction: U.S. District Court, Northern District of Alabama (2025)

  • What happened: Three attorneys from Butler Snow submitted filings with fabricated AI-generated citations in defending Alabama prison officials. The judge found the conduct improper, disqualified the lawyers from the case, and referred the matter to the Alabama State Bar.

3) Indiana Hallucination Citations (Ramirez)

  • Jurisdiction: U.S. District Court, Southern District of Indiana (2024-25)

  • What happened: In briefs for a case involving HoosierVac, an attorney filed multiple briefs with made-up AI-generated case citations. The magistrate judge recommended a $15,000 sanction and noted the lawyer failed to check the AI output.

4) Eastern District of Michigan — Sanctions for AI-Related Errors

  • Jurisdiction: U.S. District Court, Eastern District of Michigan (2025)

  • What happened: Plaintiffs’ counsel included in their responsive briefs real case names with fake quotes or misleading parentheticals that appeared to result from AI hallucinations. The court found Rule 11 violations and imposed monetary sanctions to deter future AI misuse.

5) Sanction (Southern District of Indiana — $6,000 Fine)

  • Jurisdiction: U.S. District Court, Southern District of Indiana (2025)

  • What happened: A federal judge fined an attorney $6,000 for filing briefs that included citations to nonexistent cases generated by an AI tool, emphasizing that such “hallucination cites” must be verified by counsel.  

6) In re Kheir (Bankr. S.D. Tex. 2025) 
  • What Happened: A bankruptcy court found plaintiff’s counsel used generative AI to “manufacture legal authority,” resulting in sanctions including fees, continuing legal ed., and referral to disciplinary counsel.
 
7) In re Marla C. Martin — U.S. Bankruptcy Court, N.D. Ill. (2025)
  • A bankruptcy court found that counsel filed a brief containing fabricated case citations generated by AI (e.g., In re Montoya, In re Jager, etc.) in a Chapter 13 proceeding.

  • The attorney admitted he used ChatGPT for legal arguments and did not verify the generated citations.  The court held this violated Federal Rule of Bankruptcy Procedure 9011 and sanctioned the lawyer and firm with a $5,500 fine and required attendance at an AI education session.

8) Ford v. James Koutoulas & Lgbcoin, Ltd., No. 2:25‑cv‑23896‑BPY, 2025 U.S. Dist. LEXIS 234696 (M.D. Fla. Dec. 2, 2025)

  • What happened: In this federal case, the defendants’ summary judgment motion “contained several citations that the court and the plaintiffs suspected were GenAI hallucinations, where the court was unable to locate the cited authorities.”

In most of these cases, the attorneys faced stiff fines, humiliation at the hands of their peers and public, and some were referred to the State Bar for discipline.  

What is key to note is that prior to 2023, there are no recorded instances where attorneys were caught improperly using AI.

Why?

Simply because the technology wasn't available until around 2023.  Prior to late 2022, there was no generative AI (like ChatGPT) capable of producing case citations.  

Earlier "AI" tools (like Westlaw's KeyCite or Lexis's Shepards) were search and analysis tools (meaning humans searched and analyzed when they got) - not generative drafting tools and neither KeyCite or Shepards produced hallucinated citations.

I suspect what happened is that law students and, subsequently, attorneys got lazy and stopped relying on their own efforts to draft legal documents expecting that computers would continue to be reliable and not churn out non-existant
citations
.  

Deceitful AI
Who knew people would program AI search engines to be deceitful (because algorithms are only as trustworthy as the people who programmed their parameters).

The bottom line to all this here is that as great and helpful and fast as AI is, it is not 100% accurate.  

Consequently, AI should never replace basic legal research practices (including cite checking using Shepards or Key Cite) or remove the human element (i.e. personally editing your own work).

Monday, December 22, 2025

On the Down-Low

A few months back, I did a blog on insider trading at the Congressional level and I uncovered something suspicious.

The whole idea behind stopping Congressional "leaders" from conducting stock trades while in office is because they have access to non-public information on which they make their trades/money.  

Case in point would be how Pelosi made her millions.  With an annual salary of $174,000, Pelosi was still able to score a 54% increase in net worth in 2024 out performing the S&P 500's 25% gain during the same period!


I think, though, that Rep. Ilhan Oman might have Pelosi beat.  In 2019, Ms. Oman's net worth was a NEGATIVE $45,000. 

In a recent financial disclosure report for Rep. Ilhan Omar and her husband, Tim Mynett, it was shown that their joint net worth was valued between approximately $6 million and $30 million. This represents a significant increase, with some estimates citing a 3,500% surge from the previous year's filing for the relevant assets.

So, yeah, politicians are filthy liars if they say they are not engaging in insider trading or are otherwise dealing in some under the table shenanigans.

But this is not the point of this blog.

In 2012, Congress passed the Stock Act (i.e. the "Stop Trading on Congressional Knowledge Act of 2012"). The Stock Act was passed to prevent insider trading by members of Congress and federal employees.

It required:

  • Lawmakers and many high-level executive officials to publicly post their financial disclosure reports online (in a searchable, downloadable database).

  • Post regular updates about stock trades and financial transactions.

  • Deliver greater transparency to help the public monitor potential conflicts of interest.

This would have been great but for the fact that in 2013 (little over a year after the Stock Act was signed into law), Harry Reid (D-NV) introduced Senate Bill ("SB") 716 during the 113th Congress (2013–2014).  What SB 716 did was:

  1. Eliminated the requirement that the financial disclosure forms of about 28,000 senior federal officials be posted online in a publicly searchable database.

  2. Delayed, then repealed, the implementation of that online disclosure requirement.

  3. Limited online disclosure to only the President, Vice President, Members of Congress, and candidates — not to staff or most executive branch employees.

Text summary from Congress.gov:

“S.716 modifies the STOCK Act by eliminating the requirement for the online posting of financial disclosure forms for executive branch employees and judicial officers, and for making those forms available to the public through an online searchable database.”

I mean, they say all this with such finesse like it's no big deal.  Well, it's no big deal if you're a politician looking at having to be transparent with the people who elected you.  For we the people who go to jail if we so much as not declare 50 cents to the IRS, it's a HUGE deal!

Essentially, SB 716 de-fanged the Stock Act's key provisions.

What is missing from this scenario is that Congress did all this backdoor legislation using a sneaky procedural rule called UNANIMOUS CONSENT ("UC").  

UC refers to a procedural agreement that allows the House of Representatives or the Senate to expedite action by bypassing formal rulesas long as no member objects.

 
So, why might Congress use UC for seemingly insignificant measures.  There are a few political and structural reasons:
  • Avoiding accountability:
    UC avoids roll call votes. No one has to go on record, which shields members from criticism later.

  • Preserving Senate “efficiency”:
    Leadership prefers UC to avoid days of floor debate — especially when the bill appears harmless.

  • Optics management:
    Some controversial bills are rushed through UC when leadership wants to minimize media coverage or public awareness (as with S. 716).

  • Collegial courtesy:
    Senators often grant UC as a favor to colleagues, even when the underlying issue might deserve deeper scrutiny.

So, on April 11, 2013, BOTH the House and Senate agreed to push this amendment to the Stock Act and get signed by POTUS Obama on the same day.  

Do you realize how impossible it is to get a bill passed by both houses AND be signed by the POTUS on the SAME DAY?!?!?

I queried Chatgpt on the topic and it said:

I could not find a reliable source that gives a complete count of how many times in the last 50 years a bill was introduced, passed by both houses, and signed into law (by the POTUS (who, at the time, was obama) on the very same day. Such cases are very rare, and I found at least one example (S. 716 in 2013) but no comprehensive record. 

I mean, Congress really, REALLY wanted this bill to pass without a hitch in the worst way - and I really wonder why?

While any Congressperson will tell you that SB 716 was a small and insignificant amendment, it had HUGE implications all because they were able to ram it through using the unanimous consent procedure.

The problem with the usage of UC is that it presents a number of problems.  If nothing else, what’s “small” to Congress may be huge to citizens.  Other issues to note when Congress employs UC include:

  • Your right to see what your representatives are doing (transparency laws),

  • How your taxes are spent (appropriations and relief bills),

  • Your rights and privacy (surveillance, judicial, or defense acts),

  • Or how government power is distributed (administrative and procedural changes).

After going through this, I got to wondering if there were other small/insignificant bills that were ramrodded through Congress like SB 716.

Turns out, there are/were, like:

So, why does any of this matter?  

Well, by allowing technical details to pass by unopposed, democratic accountability is weakened when decisions are made without public record or discussion.  

When UC is employed, public trust erodes when Congress passes self-serving or complex measures quietly.

Finally, transparency advocates (like OpenSecrets, Sunlight Foundation, and CRS analysts) have warned for years that UC is both a procedural convenience and a cloak of invisibility.

Of course, when looking at transparency and Congresses lack of any transparency, I hear the immortal words of Nancy Pelosi when describing the boondoggle of what was to become the Affordable Care Act (aka Obamacare):  

"We have to pass the bill," she said, "so that you can find out  what is in it."

If that isn't the gist of all things NON-transparent, nothing is.

Bottom line: as long as Congress is able (and willing) to ramrod any legislation with procedures like Unanimous Consent, there is no way we the people can trust that what they are doing is in anyone's best interest - except their own.

Monday, October 27, 2025

What's good for thee is not for me

You know what really bugs me (well, today, anyway)?  It's these laws that are enforceable on "we" the people but "them" the politicians are immune.  

I mean, the whole point of the Revolution of 1776 was, among other things, to provide representation in government by the people and for the people.

Instead, what we have are laws that stick it to we the people in favor of select corrupt politicians (and in my book, if you're going to use laws to your benefit and then not allow your constituents whom you are supposed to be representing the same courtesy - you are corrupt).

For example:

1. Campaign Finance & Bribery

Citizens:

  • Bribing or receiving money for official acts is a federal felony (18 U.S.C. § 201).

  • Private citizens have been convicted and imprisoned for giving or receiving even small bribes.

Politicians:

  • Many accept massive campaign donations or “Super PAC” support from those seeking favorable policy.

  • Citizens United v. FEC558 U.S. 310 (2010) made it nearly impossible to prosecute large-scale political donations as bribery.

  • The McDonnell v. United States579 U.S. 550 (2016) Supreme Court decision drastically narrowed what counts as an “official act” — making bribery cases against politicians almost impossible to win.

Why immune: lobbying and campaign donations are protected as “speech”; bribery laws are narrowly interpreted to protect politicians but are broadly interpreted when prosecuting everyone else.

 3. Tax Evasion and Financial Disclosure

Citizens:

  • IRS aggressively pursues underreporting, false deductions, and unreported income.

  • Thousands are prosecuted yearly for tax evasion.

Politicians:

  • Members of Congress and high officials rarely face IRS audits.

  • Some have failed to disclose millions in stock trades, rental income, or gifts without criminal consequence (usually resolved with a fine or “amended filing”).

Why immune: disclosure violations are civil; IRS rarely audits sitting members; ethics committees are political, not judicial.

 4. Obstruction of Justice / Perjury

Citizens:

  • Lying to the FBI, Congress, or courts = felony under 18 U.S.C. § 1001.

  • Many citizens and government employees have been prosecuted for false statements.

Politicians:

  • Members of Congress or executive officials frequently give misleading or false testimony under oath with no prosecution (e.g., high-profile hearings).

  • Enforcement is inconsistent and usually requires the DOJ to prosecute itself or its political allies.

Why immune: political pressure; DOJ discretion; speech or debate clause.

5. Insider Trading

Citizens:

  • Regular investors are routinely prosecuted by the SEC and DOJ for trading on material, nonpublic information (MNPI).

  • Penalties: prison (up to 20 years), civil fines, disgorgement of profits, and permanent bans from trading.

Politicians:

  • Members of Congress have received briefings with MNPI (e.g., COVID-19 briefings before market crashes).

  • Despite clear suspicious trades, no member has ever been convicted under the STOCK Act or Securities Exchange Act.

Why immune: difficult to prove “nonpublic” and “intent” elements; political pressure; Congress regulates itself.

It's to this last one that I base my claim because it seems that Congress (you know, the group(s) that is supposed to be representing we the people?) purposely makes laws that secretly include loopholes to help politicians evade prosecution.

As this all relates to Congressional insider trading, while politicians in the U.S. are not techically exempt from insider trading laws, because enforcement is extremely weak (and taking into account the many, MANY loopholes that politicians are aware of and take advantage of), prosecution is nearly impossible in practice.

Here’s a breakdown of why this happens.

The law technically applies to politicians.  The Securities Exchange Act of 1934 and Rule 10b-5 prohibit anyone (including members of Congress) from trading stocks based on material, nonpublic information (MNPI).  However, for decades, it wasn’t clear whether information obtained through official government work counted as MNPI.
 
Well, it was clear to regular, every day people who could see what was going on but for whatever reason, politicians (who can't see past the end of their elongated noses) could never see any discrepancies. 
 
The STOCK Act (2012) tried to fix this.  After public outrage over reports that members of Congress were trading stocks based on information learned through their duties, Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act in 2012.

The Act explicitly affirmed that Members of Congress, their staff, and executive officials are subject to insider trading laws.  It required disclosure of trades within 45 days and it prohibited the use of nonpublic information gained through official position for personal gain.

BUT...

Congress quietly weakened the Act in 2013 — removing the online disclosure database and softening transparency requirements (remember the part about the loopholes?).  Consequently, enforcement was left to federal prosecutors and the SEC, who almost never (note the NEVER part) pursue these cases. 

There have been a few notable cases where the DOJ investigate insider trading by Congressional "leaders," like:

Sen. Richard Burr (R–NC): As Senate Intelligence Chair, Burr received private briefings about the emerging coronavirus threat.  Consequently, he sold major holdings days after those briefings and before markets collapsed.

  • Date of Trades: February 13, 2020 — just before the U.S. stock market crash caused by COVID-19 fears.
  • Value of Trades: Between $628,000 and $1.72 million in 33 separate transactions. 

The DOJ investigated but declined to prosecute.

Sen. Dianne Feinstein (D-CA)In March 2020, Feinstein came under scrutiny for stock sales shortly before the market crashed due to COVID-19. Feinstein was one of them.

  • Date of Trades: January–February 2020, early in the COVID-19 pandemic.
  • Value of Trades: Estimated between $1.5 million and $6 million in Allogene Therapeutics stock (a biotech company). 

The DOJ investigated but declined to prosecute (though Feinstein offered to pay a small civil fine -  usually up to $50,000, (though the exact amount was not reported publicly). 

Sen. Kelly Loeffler (R-GA): accused of selling stocks shortly after attending a closed-door Senate Health Committee briefing on COVID-19 (January 24, 2020), during which public officials warned about the virus’s likely impact.

  • Date of Trades:  January 31 – February 14, 2020 (more than two dozen additional transactions took place over these two weeks.
  • Value of Trades: Estimated total trades: 27 separate transactions, worth between $1.3 million and $3.1 million

The DOJ investigated but declined to prosecute. 

Sen. James Inhofe (R-OK): In late January 2020, following a closed-door Senate briefing (led by Trump administration officials) about the emerging risks of COVID-19, Inhofe sold off significant stock holdings just before the market dropped sharply.

The DOJ investigated by declined to prosecute.  

Can you see the running theme, here? 

More recently, several member of congress have continued to engaged in insider trading despite the increased scrutiny, such as:
 
Who: Rep Van Hoyle (D-Oregon) 
What: In September 2025, she was "weeks or months" late in disclosing 217 stock trades by her husband, per her congressional financial disclosure.
How Much:  The trades' combined value is giving between $45,215 and $3,355,000.  Her office later said the specific combined value was about $500,000. 
 
Who: Rep. Sheri Biggs (R-South Carolina)
What:  Disclosed multiple trades made by her or her spouse in 2025, including stock sales and purchases.
How Much:  The trades improperly disclosed total somewhere between $4.14 million and $13.62 million in value.  Some individual transactions: buying and ETF (iShares Bitcoin Trust, "IBIT") in the $100,000-$250,000 range.
 
Who:  Rep. Donald Norcross (D-New Jersey)
What:  In September 2025, he filed a financial disclosure more than a year late under the STOCK Act for a stock sale.
How Much:  The sale was for up to $50,000 of Toronto-Dominion Bank stock in a retirement account.
 
Who:  Rep. Mike Kelly (R-Pennsylvania)
What:  An ethics panel found he violated the House code of Conduct in 2025 in relation to stock purchases by his wife after he allegedly learned confidential information about a plant staying open. 
How Much:  The profit from that transaction was $64,476.
 
Of course, there have been several proposed reforms to close the loopholes enjoyed by congressional "leaders."
 
Bipartisan “Ban Congressional Stock Trading Act — would force members to place assets in a blind trust or divest.
 
Trust in Congress Act — similar goals, stronger penalties. 

The
Preventing Elected Leaders from Owning Securities and Investments (PELOSI) ActFirst introduced in 2023 by Senator Josh Hawley (R-MO), the bill did not advance out of committee during the 118th Congress.  The bill (S. 1498 in the 119th Congress) was reintroduced in the Senate on April 28, 2025, by Senator Hawley.  Renamed the Honest Acton July 30, 2025, the Senate Homeland Security and Governmental Affairs Committee voted 8-7 to advance the bill. It aims to restore trust in government by prohibiting certain investments for elected officials. Its core provisions include: 

  • Banning members of Congress and their spouses from holding, trading, or purchasing individual stocks.
  • Allowing investments in diversified mutual funds, exchange-traded funds, or U.S. Treasury bonds.
  • Requiring lawmakers to divest from individual stocks within 180 days of the bill's enactment or within 180 days of taking office.
  • Applying the ban to future presidential administrations

What is particulary interesting about the Honest Act is that it does have some particularly sharp teeth in the way of penalties if/when Congressional "leaders" violate it, such as:

  • Daily fines: Fines of $1,000 or more per day that a violation continues. 
  • Forfeiture of profits: Disgorgement of any profits made from prohibited investments. 
  • Increased penalties: Higher fines for failing to make required disclosures under the STOCK Act. 
  • Forfeiture of assets: The potential loss of assets or property involved in a violation. 
  • Criminal penalties: Prison time and larger fines, as specified by criminal statutes 

 

...Buuuuut none of these bills have passed - yet (as of 2025).

So, teeth or no, odds are none of these bills will pass committees or even make it to the desk of the POTUS to be signed. 

The bottom line is this:  Where countless ordinary citizens are prosecuted while no politician has ever faced charges for insider trading strongly suggests that the insider trading “rules” for Congress are weak and effectively unenforceable in practice on purpose. 

Essentially, what's good for thee is not for me

The failure of government to police itself demonstrates systemic bias, structural loopholes, and political protection, rather than any lack of wrongdoing by the politicians themselves...and it's well past time to change all this.   

So, let's hope Sen. Hawley has thcojones (and the Republicans can get out their own way long enough) to get the "Honest" Act passed into law.