The appearance of impropriety appears to be behind the resignations this week of two regional Federal Reserve Bank presidents, Eric Rosengren of Boston and Robert Kaplan of Dallas. At issue were all of the stocks they were trading while also making decisions potentially critical to the performance of those stocks, not unlike two other esteemed former public servants. The question now is, will roughly one-tenth of the federal judiciary join them?

About two-thirds of federal district judges disclosed holdings of individual stocks, and nearly one of every five who did heard at least one case involving those stocks…. When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family’s financial interests….

Nothing bars judges from owning stocks, but federal law since 1974 has prohibited judges from hearing cases that involve a party in which they, their spouses or their minor children have a “legal or equitable interest, however small….” Although most lawsuits don’t directly affect a company’s stock price, the Supreme Court in 1988 said the law’s purpose is to promote confidence in the judiciary….

The findings “are both surprising and disappointing,” said Timothy Batten Sr., chief judge of the U.S. District Court for the Northern District of Georgia and a member of the Committee on Codes of Conduct for the Judicial Conference of the U.S.

Oh, you think that’s surprising, Tim? Just wait.

Judge Batten himself owned shares of JPMorgan Chase & Co. while he heard 11 lawsuits involving the bank, most of which ended in the bank’s favor, the Journal’s analysis shows.

“I am mortified,” Judge Batten said in a phone interview when notified about his violations, which occurred in 2010 and 2011, before he joined the Codes of Conduct committee in 2019. “I had no idea that I had an interest in any of these companies in what was a most modest retirement account” managed by a broker.

“I just blew it. I regret any question that I’ve created or appearance of impropriety or a conflict of interest,” he said.

Cheer up, Tim: It could have looked worse, as it does for one Chief Judge Emily Marks of the U.S. District Court for the Middle District of Tennessee, who you may not be surprised to learn is an appointee of former President Donald Trump, himself never one to worry too much about conflicts of interest or the letter of the law.

In the suit, Jacob Springer and Jeanetta Springer of Roanoke, Ala., acted as their own attorneys in challenging Wells Fargo’s foreclosure of Ms. Springer’s father’s home…. Judge Marks… was assigned the case in mid-August 2018. The judge bought Wells Fargo stock at the end of the month. In September, she adopted a magistrate judge’s recommendation to dismiss the Springers’ suit, a decision affirmed on appeal…. Mr. Springer said, “This is outrageous. How am I supposed to know she owns stock in Wells Fargo?”

Seriously: It’s hard enough to know whether Wells has improperly foreclosed on your home in the first place.

131 Federal Judges Broke the Law by Hearing Cases Where They Had a Financial Interest [WSJ]
Boston Fed President Rosengren abruptly announces retirement 9 months earlier than planned [CNBC]
Dallas Fed President Robert Kaplan resigns after controversy over stock market trading [NBC News]

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