Courts and the Market

Do you think that a member of the Supreme Court should be able to hold shares of stock and then sell them right before a case comes up that concerns that company?

Here are a few examples:

Annual financial disclosures released Friday confirm that Chief Justice John Roberts Jr. sold stakes in Citigroup Inc. (C) and Cisco Systems Inc. (CSCO) so he could vote in two major Wall Street securities cases. Roberts, who pushed for a 2006 tax law change that eases the tax burden judges face when they unwind stock positions, also sold Merck & Co. Inc. (MRK) and Becton Dickinson & Co. (BDX) holdings in 2007. Roberts sold a stake in Cisco Systems worth between $50,000 and $100,000 in March 2007. The move allowed him to be the fifth vote in the 5-3 Stoneridge ruling that restricted the ability of shareholders to sue lawyers, accountants and other third parties that do business with corporations. The disclosures also show Roberts sold between $50,000 and $100,000 of Citigroup stock a week before the court heard arguments in Credit Suisse Securities v. Billing, a case where the court ruled 7-1 that Wall Street firms are immune from certain class-action lawsuits brought under federal antitrust laws. Justice Samuel Alito also pared some of his stock holdings by selling a stake in Intel Corp. (INTC) and selling part of his holdings in Bristol-Myers Squibb Co. (BMY), McDonald's Corp. (MCD) and Exxon Corp. (XOM). Exxon appeals cases to the high court regularly and Alito has in the past recused himself from those matters. Although he sold between $100,000 and $250,000 of his Exxon stake, he continues to hold a similar amount. Justice Stephen Breyer, who holds a large portfolio of stock and fund investments, said he sold Alltel Corp. (AT) stock in November 2007 worth between $50,000 and $100,000. Breyer also sold stakes in PartnerRe Ltd. (PRE) and Scottish Power PLC. By Mark H. Anderson and Christina M. Wright Of DOW JONES NEWSWIRES

There is nothing that says if they brought the stock back after these cases but I would content that this could be a conflict of interest.