LegiStorm: Rep. O’Rourke violated the STOCK Act by buying into IPOsPress Releases|9.20.18
O’Rourke Failed to Follow House Ethics Warning That IPO Participation is Violation of STOCK Act
HOUSTON, Texas – Congressman Beto O’Rourke campaigns on government accountability and removing special interests from politics, but what many voters don’t know is that in 2013, according to LegiStorm, he disregarded a House Ethics Committee directive not to participate in Initial Public Offerings (IPOs), in violation of the Stop Trading On Congressional Knowledge Act (STOCK Act).
“Beto O’Rourke not only violated the STOCK Act, but did so within two days of being specifically warned to not invest in IPOs, especially Twitter’s IPO,” said Cruz spokesperson Catherine Frazier. “Beto only corrected himself after being caught by LegiStorm, in spite of clear warnings to contact the House Ethics Committee before the purchase of any IPOs. His actions reflect a troubling disregard for the standards expected of members of Congress and directly contradict his campaign rhetoric promoting government accountability.”
- In 2013, the House ethics committee issued a memorandum warning to Members of Congress that they should not participate in initial public offerings, since those transactions are generally not available to the public and would violate the STOCK Act. Specifically, the memo warned against Members participating in the IPO of Twitter.
- House Ethics Committee memo also cautioned Members that “the committee recommends that any Member, officer or employee who has questions about participating in any IPO contact the committee in advance of your purchase to determine if your purchase is permissible under the Act.”
- Despite this warning, Beto O’Rourke participated in multiple IPOs, often buying and selling on the same day as the public offering – including buying shares of Twitter, Inc.
- On November 7, just two days after the House Ethics Committee memo specifically warning Members against the hotly anticipated Twitter IPO, O’Rourke purchased 100 shares of Twitter.
- Despite the House Ethics Committee’s instruction that Members check with the Ethics committee before participating in certain transactions, only after LegiStorm called O’Rourke’s office to question the IPO transactions did O’Rourke contact the Ethics committee.
- After O’Rourke reported himself, the Ethics committee instructed him to return the full amount of the profit – totaling $7,136 – to the U.S. Treasury by overnight mail.