New Disclosure Site Slow to Post Judicial Stock Trading Reports

Delays in posting stock transactions and other financial disclosures by US judges to a new database are limiting the utility of a tool designed to improve public transparency of the court system, watchdogs said.

The most recent mandatory securities transaction report available was submitted by a judge in April, according to an analysis by the nonpartisan judicial watchdog Fix the Court and a review of postings through Oct. 9 by Bloomberg Law.

Annual disclosures are due to be published within 90 days of submission, while interim reports must be filed within 45 days of the transaction, under a law that took effect last year.

The information is coming in, but the judiciary’s administrative arm tasked with operating the searchable database has struggled to process and post the annual and periodic disclosures by an estimated 2,500 judges. Things are moving far more slowly than a similar database maintained by Congress.

A backlogged database “defeats the purpose of transparency” as financial interest information “loses relevance” the more time has passed, said Kedric Payne, senior director of ethics at the Campaign Legal Center and former deputy chief counsel of the Office of Congressional Ethics.

Peter Kaplan, a spokesperson for the Administrative Office of the US Courts, declined to provide exact data on the size of the backlog of disclosures awaiting publication. But he said that “the processing of these new periodic transaction reports and the establishment of the online database has resulted in significant additional workload.”

Resource Constraints

The Courthouse Ethics and Transparency Act (P.L. 117-125), signed into law in May 2022, required the judiciary to establish an online database of publicly accessible financial disclosures submitted by life-tenured judges, including Supreme Court justices, as well as bankruptcy and magistrate judges. The law also made those judges subject to a 2012 law requiring federal officials to disclose periodic securities transactions worth more than $1,000 (PL-112-105).

The law followed reporting by the Wall Street Journal that more than130 federal judges had failed to recuse themselves from cases involving companies in which they or family members held stock.

Other legally required databases of federal officials’ disclosures—such as the one with congressional lawmakers and candidates—haven’t encountered the same problems.

Late filings in the congressional database are usually the fault of the lawmakers themselves, said Craig Holman, government affairs lobbyist at Public Citizen, a nonprofit advocating for consumer rights. Payne said he has seen periodic stock reports from members of Congress get published within 24 hours of filings.

In the Senate database, a periodic transaction report filed by one lawmaker on Oct. 3 was publicly available the next day.

Gabe Roth, executive director of Fix the Court, said that “accurate and contemporaneous numbers” are needed for effective oversight.

“You need to know what type of financial entanglements judges and justices have in real time,” he said of the law’s aim to enhance transparency into judges’ financial interests.

Sen. John Cornyn (R-Texas), a member of the Judiciary Committee and sponsor of the bill, said after passage that the measure “will help bring potential conflicts of interest to light and bolster public trust in our judicial system.”

The database delays likely are due, at least in part, to a shortage of resources.

Earlier this year, the judiciary requested $297,000 in fiscal 2024 to support the hiring of 10 people to process these financial disclosures. Congress hasn’t enacted appropriations bills for the spending year that began Oct. 1, and instead has passed a short-term bill to extend last year’s funding levels until mid-November.

Kaplan said the office has been “diligently and continuously” processing judges’ financial reports and posting them onto the online database “as quickly as possible.”

Heightened security reviews relating to reports from judges, which don’t apply to the financial disclosures filed by the other branches of government, may contribute to delays.

The law requiring the posting of disclosures states that reports from judges or judicial employees needn’t be immediately available if the judiciary’s policy arm, the Judicial Conference, determines the information could endanger the individual. It also permits the reports to be redacted if necessary to protect judges and their families.

Kaplan said the office works to ensure those reports “are complete and accurate and, in accordance with regulation, do not contain information that could endanger the filer or the filer’s family.”

Congressional Oversight

Sen. Chris Coons (D-Del.) who also sponsored the Senate version of the judicial disclosure bill, said he met with his staff about the delays, and that his staff is in regular contact with the courts’ office about compliance.

“As is the case with many bills that get signed into law, you do have to keep an eye on the operation, the funding, the implementation,” said Coons, a member of the Judiciary Committee. “And it has been a concern of mine that this is not being followed.”

Sen. Elizabeth Warren (D-Mass.) has proposed legislation that would largely ban federal judges and justices from owning or trading stocks or other forms of securities, but the bill hasn’t attracted any Republican support.

Warren said it’s frustrating not to get traction. “No one stands up and says publicly, ‘sure, let judges trade Microsoft stock at the same time that they’re presiding over a hearing that would affect Microsoft’s fortunes.’ But the resistance is quiet, but effective,” she said.