Hidden Agendas: Examining Personal Finances of Regulatory Officials

Welcome to the July 2023 edition of our newsletter!  In this issue, we’ll examine conflicts of interest among regulators and other government officials as efforts to rein in insider trading continue.

New Frontiers, Old Problems: Regulators Grapple With Conflicts While Monitoring New Technology

The momentum in recent years has been for government agencies, especially at the federal level, to assert themselves into, and often against, markets as new technologies become available at breakneck speed.  Against this increasingly robust regulatory effort are the details of the humans who carry out such policies.  Much has been made in recent months about stock trading by members of Congress or their spouses, often around the time of sensitive information being shared at committee hearings or other fact finding events.  In the executive branch, regulatory officials have come under scrutiny for recommending policy initiatives affecting companies whose stock they own.  The judicial branch, meanwhile, has only recently implemented financial disclosure rules which have brought to light what many see as unacceptable conflicts concerning the justices’ personal relationships, financial benefit, and matters before the court,

As the administrative state continues to encroach into private market activity, companies can best prepare to defend themselves by delving into the backgrounds of the regulators, legislators, and jurists whose decisions can affect their market outlook.  Does the deputy secretary at an oversight agency own any shares in a competitor?  Does their spouse work in a field that could cause a conflict?  Has this person had to be recused from certain matters in the past?

By understanding the histories of decision-makers who can affect your company’s future, you can also understand a nuanced part of the competitive landscape, and if necessary be prepared to make sure that your company does not suffer from conflicts of interest which would otherwise remain unmentioned below the surface.