More than 130 federal judges broke the law and violated ethics by hearing cases involving companies they had a financial interest in over 11 years
An investigation found that more than 130 judges violated US law by overseeing cases involving companies in which they or their family held direct stock
The report found that these judges have improperly failed to recuse themselves from 685 US court cases since 2010
The jurists were appointed by presidents whose terms have spanned seven decades, from Lyndon B. Johnson to Donald J. Trump
Roughly two-thirds of the 131 jurists’ rulings ended up being in favor of their or their family’s financial interests
Of the two-thirds of judges who disclosed stock holdings, about a fifth of them presided over at least one case that involved their stock, the report showed
An investigation found that 131 federal judges violated US law by overseeing cases involving companies in which they or their family held direct stock, The Wall Street Journal reported.
The judges failed to recuse themselves from 685 cases across the nation in which they held financial interest since 2010, the investigation revealed.
What’s more, when the judges participated in these cases, roughly two-thirds of their rulings ended up being in favor of their or their family’s financial interests.
While there are no laws that prohibit judges from owning stocks, the federal jurists’ code of conduct demands judges recuse themselves in the event that they hold any semblance of financial interest in a case – or, the ‘ownership of a legal or equitable interest, however small,’ as the set of regulations defines it.
The cases in question were all held between the years 2010 and 2020 – and of the two-thirds of federal judges who disclosed individual stock holdings, roughly a fifth of them presided over at least one case that involved their stock, the investigation showed.
After the Journal notified the judges of the findings of their sprawling study, 56 of the lawmen began to alert parties involved in 329 of the lawsuits, of their conflict of interest.
Judges offered multiple explanations for their infringements when confronted by the paper.
Most deflected the blame, citing administrative errors and arguing yjay their recusal lists contained misspellings that caused cases to slip through the cracks of their conflict-screening software.
Other judges called attention to rulings they made that resulted in their own financial losses.
With that said, the majority of jurists named in the study benefited greatly from the inside information.
In New York, for instance, Judge Edgardo Ramos presided over a lawsuit between an Exxon Mobil Corp. unit and TIG Insurance Co. over a pollution concern – while owning between $15,001 and $50,000 of Exxon stock.
Ramos eventually ruled that TIG should pay Exxon $25 million, and even added $8 million of interest to the judgment.
An federal court official argued that Ramos was unaware of the legal infracting he committed taking the case, as his ‘recusal list’ included only the parent company Exxon, and not the unit – and therefore was overlooked by court conflict-screening software, which worked only through exact matches.
The unit, however, had previously informed the court at the outset of the case that it was a subsidiary of Exxon, so that Ramos – who was appointed by Barack Obama -could ‘evaluate possible disqualification or recusal,’ court filings indicated.
In Colorado, Judge Lewis Babcock oversaw particularly troubling proceedings involving a Comcast Corp. subsidiary, in which he ruled in the telecommunications company’s favor after several of their employees were accused of harassing a family in Colorado.
In the case, a couple accused the telephone service company’s employees of threatening them, intimidating their 10-year-old daughter, and physically injuring their dog.
The pair asked Babcock to issue a judicial order barring the company from accessing their property to install fiber-optic cables.
Babcock – who was appointed by Ronald Reagan – ruled that the couple had ‘continually blocked Comcast’s access to the easement,’ and sent the case back to state court, which was what Comcast wanted.
All the while, the judge or his family reportedly held between $15,001 and $50,000 in Comcast stock, the report revealed.
‘I dropped the ball,’ Babcock attested when asked about his conflict of interest in the case.
The jurist went on to blame the infraction on internal administrative mishaps, and thanked the Journal for ‘helping me stay on my toes the way I’m supposed to.’
Meanwhile, at an Ohio-based appeals court, Judge Julia Smith Gibbons authored an opinion that favored Ford Motor Co. in one particular court proceeding in 2014 – while her husband, Bill Gibbons, owned stock in the automaker.
Prior to Gibbons’ ruling, her husband’s financial advisor promptly purchased even more Ford stock, for his retirement account.
Gibbons – appointed by George W. Bush – claimed she had mistakenly assumed that a holding in her husband’s retirement account did not constitute a conflict of interest, and therefore require her recusal.
‘I regret my misunderstanding, but I assure you it was an honest one,’ Gibbons attested.
A slew of judges who failed to disqualify themselves from cases that could potentially benefit them financially were named in the bombshell report – with jurists being appointed by presidents spanning seven decades, from Lyndon Johnson to Donald Trump.
The Administrative Office of the U.S. Courts responded to the Journal’s exposé Tuesday, stating, ‘The Wall Street Journal’s report on instances where conflicts inadvertently were not identified before a case was resolved or transferred is troubling, and the Administrative Office is carefully reviewing the matter.’
The office added that the federal judiciary branch of the US government ‘takes very seriously its obligations to preclude any financial conflicts of interest,’ and has since enacted measures – such as more advanced conflict-screening software and vigorous ethics training – to prevent such violations in the future.
‘We have in place a number of safeguards,’ the office insisted, ‘and are looking for ways to improve.’
