Case Study:
Big Brother in Education Technology
Written by Joe Marzo
Digital surveillance has become increasingly prevalent in our world, with cameras and tracking devices present in many public spaces and even in our own homes through smart devices. While this technology can provide benefits such as increased security and convenience, some argue that we may have gone too far in sacrificing our privacy for these advancements. It is important to consider the potential consequences and balance the benefits with the risks.
Case Study: Insider Trading in Congress
Background:
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In March 2020, several members of Congress were accused of engaging in unethical stock sales after receiving confidential briefings about the potential impact of the COVID-19 pandemic on the economy. The accusations centered on the members' alleged use of insider information to make trades in their personal stock portfolios.
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One of the most high-profile cases involved Republican Senator Richard Burr of North Carolina, who reportedly sold off up to $1.7 million in stocks in February and early March, just before the stock market began to plummet as a result of the pandemic. Burr was also accused of downplaying the severity of the pandemic in public statements around the same time. Burr denied any wrongdoing, but faced calls for his resignation and an investigation by the Senate Ethics Committee.
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Republican Senator Kelly Loeffler of Georgia, who was appointed to her seat in January 2020, also faced accusations of insider trading after she reportedly sold off millions of dollars' worth of stock in February and early March, just before the stock market began to plummet. Loeffler also reportedly bought stock in companies that were poised to benefit from the pandemic, such as a company that produces personal protective equipment. Loeffler denied any wrongdoing and claimed that her stock trades were made by her financial advisers without her knowledge.
Republican Senator David Perdue of Georgia, who was up for re-election in 2020, reportedly sold off up to $1 million in stocks in February, just before the pandemic began to affect the stock market. Perdue also reportedly bought stock in a company that produces personal protective equipment. Perdue denied any wrongdoing and claimed that his stock trades were made by his financial advisers without his knowledge.
According to a report by ProPublica, four other senators, including Republicans James Inhofe of Oklahoma and Ron Johnson of Wisconsin, also made significant stock trades around the same time that they received confidential briefings about the pandemic. Inhofe and Johnson denied any wrongdoing.
Senator Dianne Feinstein (D-CA) was accused of making a stock sale in February 2020, prior to the widespread economic impact of the COVID-19 pandemic. Feinstein and her husband reportedly sold between $1.5 million and $6 million in shares of Allogene Therapeutics, a biotech company, on February 18, 2020.
The sale attracted scrutiny after it was revealed that Feinstein had attended a confidential briefing for senators on the coronavirus outbreak on January 24, 2020. Some critics suggested that Feinstein may have used the information obtained in the briefing to make informed trades.
However, Feinstein denied any wrongdoing and said that she had not personally been involved in the sale of her husband's stock. She also argued that the sale was a part of a long-standing plan to divest her holdings in the biotech industry.
Feinstein's stock sale was ultimately cleared by the Senate Ethics Committee in May 2020, after an investigation found no evidence of insider trading or other impropriety. However, the controversy surrounding the sale, along with similar allegations against other senators, led to renewed calls for stricter regulations on insider trading by members of Congress.
In response to the accusations, the Senate Ethics Committee announced in May 2020 that it would investigate the stock trades by Burr, Loeffler, and Inhofe. Perdue and Johnson were not included in the investigation. Burr stepped down as chairman of the Senate Intelligence Committee during the investigation.
In June 2020, the Department of Justice announced that it had closed its investigation into Burr's stock trades without filing charges. The Senate Ethics Committee also closed its investigation into Burr in November 2020, finding no evidence of wrongdoing. Loeffler was not re-elected in the November 2020 election.
Reflection Questions
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Should members of Congress be required to divest from individual stocks and invest only in diversified investment vehicles in order to avoid conflicts of interest and the appearance of impropriety?
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What ethical principles do you think are most important for elected officials to uphold, and how can we ensure that they are held accountable when they fail to do so?
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What are the consequences of insider trading on the public's trust in government and on the stock market?
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What steps can we take to prevent conflicts of interest and corruption in government, particularly in relation to financial transactions and investments?
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Do you think that the members of Congress who engaged in insider trading during the pandemic should have faced criminal charges, or do you think that the ethics committees in Congress were sufficient to address the issue?
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How can we balance the need for transparency and accountability in government with the privacy concerns of elected officials, particularly in relation to financial transactions and investments?