Slaughter's STOCK Act Reveals Questionable Trades that Lead to Resignation of the CDC Director


Date: Jan. 31, 2018
Location: Rochester, NY

Congresswoman Louise M. Slaughter (NY-25) released the following statement after records obtained under a law she authored, the Stop Trading on Congressional Knowledge (STOCK) Act, led to the resignation today of Brenda Fitzgerald, director of the Centers for Disease Control and Prevention (CDC). These records revealed a series of questionable investments made by Fitzgerald that posed serious conflicts of interest given her position leading the CDC. Slaughter wrote the STOCK Act, one of the most important ethics bills in a generation, to ban insider trading and increase transparency for federal officials.

"As a result of the STOCK Act and the work of a strong press, we know that Brenda Fitzgerald made several questionable stock trades that posed serious conflicts of interests given her position leading the CDC. Ultimately, these conflicts made it impossible for her to impartially continue serving in this role. These trades only came to light because of the groundbreaking disclosure requirements put in place under the STOCK Act. This episode is exactly why I wrote this law and led the six year fight to get it signed into law. Unfortunately, this is one of just many examples of the Trump administration's deep ties to big corporations and significant financial conflicts of interest. The American people deserve to know whether federal officials are upholding the public trust and adhering to the highest ethical standards, or using their powerful positions to enrich themselves," said Slaughter.

Slaughter first introduced the STOCK Act in 2006. After her six year fight and a groundswell of public support following a 60 Minutes investigation, the legislation was passed and signed into law on April 4, 2012 by President Obama. The bill prohibits insider trading by members of Congress, their staff, and other government employees and requires groundbreaking new disclosures that shine a light into the trading habits of public officials.

Last year, Slaughter was the first member of Congress to call on the Securities and Exchange Commission (SEC) to conduct a complete investigation into questionable stock trades by former Health and Human Services Secretary Tom Price when he was a member of the House of Representatives. Filings required under the STOCK Act show that while serving in Congress, Price made hundreds of stock trades since those disclosures first became mandatory in 2012, including reported transactions involving stocks of 40 different companies in the health care sector. As former chairman of House Budget Committee and member of the House Ways and Means Subcommittee on Health, Sec. Price was privy to information not available to the public. Price resigned last September.

Records obtained under the STOCK Act also led to an explosive report released last June that bolstered allegations of insider trading by Congressman Chris Collins (NY-27) and a number of Republican colleagues. It also confirmed that Collins used taxpayer-funded government resources for personal gain -- a clear violation of House rules. To date, at least eight current and former Republican members of the House of Representatives, as well as spouses, children, and staff have invested in the same small Australian biotech firm in which Congressman Collins is the largest shareholder and board member.

Slaughter has asked the Securities and Exchange Commission, the U.S. Attorney for the Southern District of New York, the House Committee on Ethics, and the Office of Congressional Ethics to investigate this scandal. In October, the House Ethics Committee announced that it was investigating Congressman Collins for possibly violating federal law and House rules governing insider trading.

She has also introduced the End Congressional Stock Market Abuse Act following Congressman Collins' controversial trading. This legislation would prohibit members from taking part in foreign IPOs, purchasing stock at discounted prices, selling stock at higher than market value, or from participating in private placement stock offerings.