Gillibrand: The American People Need to Know Their Elected Leaders and High-Level Administration Appointees Play by the Same Rules as Everyone Else
U.S. Senator Kirsten Gillibrand today called on the Securities and Exchange Commission (SEC) to immediately conduct an investigation into whether Tom Price, President-elect Donald Trump’s nominee for Department of Health and Human Services Secretary, violated the STOCK Act and other federal laws in the purchase and sale of shares of a medical device manufacturer.
Senator Gillibrand introduced the bipartisan STOCK Act in 2011. This legislation, which Congress passed overwhelmingly in 2012, made insider trading by members of Congress and other high-level government officials a clear violation of the law and Congressional rules and requires lawmakers to disclose major trades. The legislation explicitly bars members of Congress from using nonpublic information for their own personal benefit.
The full text of the letter to the SEC is below:
Mary Jo White, Chair, U.S. Securities and Exchange Commission
Chair White:
I write to ask that your office immediately investigate whether Congressman Tom Price, President-Elect Donald Trump’s nominee to be the Secretary of Health and Human Services, violated the STOCK Act and other Federal laws in the purchase and sale of shares of a medical device manufacturer.
In 2012, Congress overwhelmingly passed legislation I introduced, the STOCK Act, to show the American public that Members of Congress and high-level Administration officials do not have special legal treatment in insider trading laws. As you are aware, the law affirms that covered employees, including Members of Congress, the President and Vice President, and high-level Administration employees, have a duty of trust and confidentiality concerning nonpublic information. The law also requires expedited and periodic public disclosure of covered financial transactions by Members of Congress and high-level officials in the executive branch, to ensure transparency and accountability.
Recent news reports and records in the House of Representatives have detailed that in March of 2016, Congressman Price purchased upwards of $15,000 in shares of Zimmer Biomet, a medical device manufacturer. Less than a week after the purchase, Congressman Price introduced legislation to delay a Centers for Medicare and Medicaid Services (CMS) regulation regarding CMS’s Comprehensive Care for Joint Replacement Model for payment of hip and knee replacements for Medicare patients. Completion of this rule would have a direct effect on this manufacturer and could have reduced the value of the shares the Congressman purchased.
In addition, at the time of the purchase of these shares, Congressman Price was a member of the House of Representatives Ways and Means Committee, which has jurisdiction over the Center for Medicare and Medicaid Services. As a senior member of this Committee, the Congressman has special access to nonpublic information regarding legislative and regulatory action affecting wide swaths of the healthcare industry, including medical device manufacturers like Zimmer Biomet.
The STOCK Act makes clear that Members of Congress and high-level Administration officials cannot profit from nonpublic information. The American people need to know that their elected leaders and high-level Administration appointees play by the same rules as everyone else. This bipartisan law provides a legal requirement that affirms our elected officials’ duty to not misuse nonpublic information. It is imperative that the American public and Members of Congress who are entrusted to determine whether Congressman Price is fit to be Secretary of Health and Human Services, know once and for all whether he violated the STOCK Act or other Federal laws when engaging in financial transactions.
I ask for your expedited determination in this matter.
Sincerely,
Kirsten Gillibrand, U.S. Senator