A quarter of FTC officials trade stocks in the same tech giants they regulate

Many top Federal Trade Commission officials are also investing in some of the biggest companies the agency regulates, according to a new report.

From 2016 to 2021, about a third of the FTC’s 90 top officials owned or traded stock in companies that were under FTC review or merger investigation, according to a Wall Street Journal analysis. financial disclosures Thursday.

Additionally, a quarter of top executives have been invested in big tech companies such as Amazon, Alphabet and Meta, even as the sector has come under intense regulatory scrutiny due to potential antitrust concerns.

A former FTC chairman, Joseph Simons, held shares in Microsoft, Oracle and AT&T even as the agency investigated the technology and telecommunications sectors, according to the report.

The FTC and the officials named in the report said all of their stock trading followed the law, as well as ethics rules for federal employees, and that they had not been accused of wrongdoing.

However, the report raised concerns about potential conflicts of interest within the agency, which is tasked with protecting American consumers from monopolies, economic cartels and shady business practices.

Former FTC Chairman Joseph Simons held shares of Microsoft, Oracle and AT&T even as the agency investigated the tech and telecommunications sectors

Kent Cooper, a former government official and expert on ethics issues, told the Journal that although public officials’ stock trading is within the law, even the appearance of a conflict “harms the reputation of the agency and the government in general”.

“Are these decisions being made in the interest of the public or officials who have a personal benefit in the outcome?” he said of the questions raised by the revelations.

The newspaper’s analysis was based on the financial disclosure forms of about 12,000 senior career employees, political staff and presidential appointees at 50 agencies.

He found that FTC officials, on average, were more active in trading individual stocks than any other major agency included in the analysis.

A spokesperson for the FTC did not immediately respond to a request for comment from DailyMail.com, but the agency told the Journal it had a “robust ethics program” and followed rules set out by the Congress and the Office of Government Ethics.

Simons, the FTC chairman from 2018 to January 2021, disclosed more than 1,300 transactions during his tenure, though fewer than a dozen involved individual companies rather than funds.

Simons sold shares of AT&T, Charter Communications and Oracle during his tenure as chairman, but retained a stake in Microsoft, which rose in value 140% during his tenure.

Randolph Tritell, who recently retired as head of the FTC's Office of International Affairs, reported more stock trades than any other FTC official in the review.

Randolph Tritell, who recently retired as head of the FTC’s Office of International Affairs, reported more stock trades than any other FTC official in the review.

FTC Chairman Joe Simons (left) and Associate Director of the FTC's Enforcement Division James Kohm appear at a press conference in 2019 to announce that Facebook has agreed to settle allegations that it mishandled user privacy.

FTC Chairman Joe Simons (left) and Associate Director of the FTC’s Enforcement Division James Kohm appear at a press conference in 2019 to announce that Facebook has agreed to settle allegations that it mishandled user privacy.

Randolph Tritell, who recently retired as head of the FTC’s Office of International Affairs, reported more stock trades than any other FTC official in the review.

Since 2016, it has reported more than three dozen trades in shares of Facebook, Amazon, Microsoft and Oracle.

In one case, Tritell saw an 80% gain in its Amazon shares over nine months, due to well-timed deals, as the European Commission investigated whether the company breached antitrust rules.

Tritell said his financial adviser handles his stock trading and rarely provides information.

Abbott Lipsky was named acting director of the FTC’s Competition Bureau in February 2017 and later that year said he owned nearly 90 individual stocks, some of which were owned by a family trust.

In May 2017, Lipsky said he bought between $1,001 and $15,000 in JPMorgan Chase, adding to the company’s holdings he already owned, disclosures showed.

Just seven weeks later, on June 29, antitrust regulators at the FTC cleared an acquisition involving JPMorgan.

Federal ethics rules contain exemptions that allow individual stocks to be traded, and FTC officials say all of their trades followed the guidelines.

Abbott Lipsky was named acting director of the FTC's Competition Bureau in February 2017 and later that year said he owned nearly 90 individual stocks.

Abbott Lipsky was named acting director of the FTC’s Competition Bureau in February 2017 and later that year said he owned nearly 90 individual stocks.

An investment of up to $15,000 in an individual stock, or $50,000 in an industry-specific mutual fund or ETF, is not considered a conflict of interest under federal regulations.

The report comes as the stock trading of members of Congress and their immediate family members is under renewed scrutiny by ethics experts.

In July, some stock trades executed by Speaker Nancy Pelosi’s husband, Paul Pelosi, drew attention when he sold his shares in chipmaker Nvidia days before the House was considering a bill to massive stimulus to boost the US semiconductor industry.

Paul Pelosi sold 25,000 shares of Nvidia for about $4.1 million, suffering a loss of $341,365, according to financial reports.

Democrats have proposed legislation to regulate stock trading by members of Congress, but Republicans and even some Democrats say the measures don’t go far enough to prevent conflicts of interest.

Democrats on the House Administration Committee released a framework for securities trading legislation last month, but it is unlikely to go to a vote before the midterm elections next month.

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