Schneider proposes (more) insider trading reform for Congress; background guarantees to outrage

Ever feel like it's harder and harder to pay higher and higher bills, even while the news raves about low unemployment, a rising stock market, and the rich get richer?  Feel like our members of Congress are out of touch and only working to line their own pockets?

Not all paranoia is delusional.  Fuel your outrage with Money, Power, and Radical Honesty: A Look at Members of Congress' Use of Information for Financial Gain, an article published by attorney Spencer K. Schneider, once my teaching and research assistant, in the Pepperdine Journal of Business, Entrepreneurship & The Law in November.  Here is the abstract.

Cleared of wrongdoing due to lack of evidence, Senators Kelley Loeffler and David Perdue continued their bids for re-election, and control of the Senate, in the Georgia run-off. Both Senators Loeffler and Perdue traded stocks in the run-up to the COVID-19 crisis after receiving classified briefings. These are just two of many instances of members of Congress profiting after receiving classified information. While the American public remained uninformed as to the true crisis looming as COVID-19 spread, members of Congress received private briefings and quietly sold securities such as travel and hotel related interests, and purchased other securities, such as remote-work software and medical equipment related interests.

Many members of Congress also profit from federal money earmarked to increase the value of their personal land deals, from access to IPOs, and from corporate board seats. While corporate executives, members of the executive branch, and ordinary citizens are subject to strict insider trading laws, members of Congress sail through loopholes and exceptions that are hand-crafted for their benefit. This article reviews proposals for fixing the problem before proposing a comprehensive solution focused on limiting the financial opportunities for members of Congress and strict reporting requirements.

While many proposals to address this problem exist, none come close to preventing members of Congress from profiting in these often nefarious ways. To ensure that members of Congress work on behalf of the American Public—and not their own pocketbooks—the comprehensive and drastic reform articulated in this article is required.

Spencer K. Schneider

Mr. Schneider worked on a piece of this article when he was still a law student under my tutelage.  I remember being flabbergasted by the background section, and then, in January 2021, thinking that we all should be at the Capitol ramparts, but for different reasons.  What's perhaps most disheartening is that past purported reform efforts in Congress have been devoid of will or insincere in execution. I know that Schneider worked hard on his reform proposal and sought advice from skeptical experts. Whether meaningful reform will precede frustration-fueled revolution in this country is anyone's guess.

The article is Spencer K. Schneider, Money, Power, and Radical Honesty: A Look at Members of Congress' Use of Information for Financial Gain, 14 J. Bus. Entrepreneurship & L. 296 (2021).  Schneider is licensed in Massachusetts and bar pending in his present home state of California.

UPDATE, Jan. 28: Less than a week after I posted this item, The Daily Show with Trevor Noah published a nice exposé on congressional insider trading, incorporating some of the same data that fueled Schneider's article and my ire:

Laws suspending driver licenses for fines need reform

Spencer K. Schneider, a 3L at UMass Law and teaching assistant in my Torts I-II classes, has authored an article for the National Lawyers Guild Review.  He examines state systems that suspend driver licenses upon unpaid fines and their perversely circular detrimental impact.  He concludes that constitutional challenges to the systems don't hold water, but that they should be reformed as a matter of sound legislative policy.  Here is the abstract.

Forty-three states have, or previously had, some version of a driver’s license suspension program. These programs are shown to have disastrous financial effects on the lives of those who cannot afford the fines inherent in them. Challenges to such license suspension schemes have been brought throughout the United States but have been largely unsuccessful. Where relief ultimately may be found is in state legislatures or city governments. When those bodies discover that, although these programs are in fact valid and constitutional, many of them have such detrimental and long-term impacts on so many citizens, they ultimately result in more harm than good. This realization has led many states to experiment with changes to, or repeals of, their driver’s license suspension programs with varying success. However, many states still rely on the fines levied by these programs and there is a legitimate argument that the programs are imposed to keep dangerous drivers off the street. Ultimately, this is an issue that arose from legislation and, despite finding its way into the court system, must be solved with legislation.

The article is Spencer K. Schneider, The Wheels on the Bus: The Statutory Schemes that Turn Traffic Tickets into Financial Crises, 77:2 Nat'l Law. Guild Rev. 81 (Summer/Fall 2020).

Mary Trump sues President, family, alleges three decades' fraud in oversight of her father's estate

Author of Too Much and Never Enough (2020), Mary L. Trump on Thursday sued her uncle, the President, and her aunt, retired federal judge Maryanne Trump Barry, for ongoing fraud and breach of fiduciary duty in oversight of the estate of Mary's father, Fred Trump, Jr., since his death in 1981.

The case comes just two months after a failed bid by presidential brother Robert S. Trump to enjoin publication of Mary's book, and one month after Mary's release of audio recordings in which her aunt condemned the President. Considering the First Amendment and the futility of last-minute injunction, the court in the earlier case refused to enforce the confidentiality provisions of a family agreement that settled litigation arising from the deaths of Robert, Maryanne, and the President's parents, Mary's grandparents, Fred and Mary Anne, in 1999 and 2000. Robert S. Trump died on August 15, 2020. Try to keep up.

To navigate the statute of limitations, Mary Trump alleges that she only became aware of the fraud upon the publication of investigative journalism by The New York Times in 2018 (pay wall; about).  Links to the dockets, the complaint in the latest Mary L. Trump case, and the court decision denying injunction in the Robert S. Trump case are now posted at the Trump Litigation Seminar blogsite, a project of The Savory Tort. HT @ TLS students Spencer K. Schneider and Richard Grace. 

Colorful U.S. case of baroness, Swiss bank makes waves in international jurisdiction, student note reports

Swiss banks in Geneva. Photo by torange.biz CC BY 4.0.

Spencer K. Schneider, my eminently able teaching and research assistant, has published a short case note in a research journal, the International Journal of Procedural Law, on a Massachusetts jurisdictional case with interesting facts.

The Massachusetts Appeals Court handed a win to a Swiss heiress who claims she was suckered into a bad investment in alchemy by a fellow aristocrat, a storied Swiss bank, and American entrepreneurs. The lower court erred when it dismissed defendant Swiss bank Rothschild for want of personal jurisdiction, the American appeals court ruled in June 2019.

Mr. Schneider aptly considers: "The American approach to jurisdiction over foreign corporations via personal agency feeds the possibility of inconsistency with jurisdictional law elsewhere in the world, such as under the Brussels Convention in Europe."

The note is Spencer K. Schneider, Aristocrats’ Squabble Over Fortune Squandered on American Alchemy May Expose Swiss Bank to U.S. Jurisdiction, in Michele Angelo Lupoi, Grandes Décisions/Leading Cases, 9:2 Int'l J. Proc. L. 339, 360 (2019).

The case is Von Schönau-Riedweg v. Rothschild Bank AG, 95 Mass. App. Ct. 471, 128 N.E.3d 96 (2019) (Casetext).