Mark Pocan Presses SEC Chairman On Investigating Potential Insider Trading Amid Trump Tariff Pause

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During a House Appropriations Committee hearing last week, Rep. Mark Pocan (D-WI) asked SEC Chairman, Paul Atkins about investigating potential insider trading around the Trump tariff pause announcement.

Transcript

00:00The gentleman from Wisconsin, Mr. Polkhan, for five minutes for questions.

00:03Thank you. Thank you, Mr. Chairman, and thank you, Mr. Atkins, for being here.

00:07Let me just do one follow-up from what Steny asked, because I just want to make sure I understand.

00:10So there were no staff reductions at all by firings?

00:14There only were by people leaving early out of the SEC?

00:17From what I understand, this is all voluntary retirements that people took through various programs,

00:26you know, deferred resignation, and those sorts of things.

00:30Okay. I just wanted a clarification for myself more than anything.

00:33So I appreciated how you talked about one of the three priorities is investor protection,

00:40excuse me, going after those who lie, cheat, and steal.

00:44I think that's really important for the market so people have confidence in it.

00:48One of the concerns I have is that, you know, since COVID, you know, the market has been doing really well

00:53until very recently with some of the talk about tariffs being on again and off again, on again, off again.

00:58The market's had some real volatility, particularly on April 9th, when at 9.37 in the morning,

01:07the president put out on his social media, this is a great time to buy, and initialed it.

01:12So that meant it came from him.

01:14And then later that day, the announcement of tariff pauses came about four hours later at 1.18.

01:20Since then, there was, just today, Secretary Duffy supposedly that morning traded in 34 companies,

01:29including companies affected by tariffs like John Deere and Shopify.

01:33Attorney General Bondi also did some trading that morning.

01:38Marjorie Taylor Greene.

01:39Those are just the ones we know of right now.

01:41So clearly, you know, this would be of concern if someone had a huge signal releasing information,

01:46public information ahead of time about something that could affect stock trades.

01:50So I guess my question is, specifically, what are you doing to look into this particular incident

01:56that happened, you know, where the signal sort of was given,

02:00and how are you looking to see who might have unfairly taken advantage of this?

02:04I know there was another trader, too, who 10 minutes before the post put out a massive call option

02:09and stood to benefit greatly on this.

02:10So this is the kind of manipulation of the market, I think, that hurts the confidence

02:15that you're trying to restore to the market.

02:17So what specifically are you doing around this?

02:21Well, Congressman, I can't really talk about any, you know, investigations, current or potential or past.

02:27How about just philosophically?

02:29If someone did what happened, philosophically, is this market manipulation?

02:35Well, around that particular incident, I obviously can't speak to it, but in general, you know,

02:41the rules around, you know, trading and whatnot have to do with material non-public information and a duty.

02:50And so, you know, all those elements need to be met.

02:53So would material non-public information, because I'm one of the people who thinks members of Congress

02:57shouldn't be able to trade stock, because I think we get a lot of inside information.

03:00So for that material non-public information, if someone indicates something prior to something significant

03:06happening that's going to affect the market, would that be in the category of manipulation

03:11in your philosophical sense?

03:13Yeah, I think it all depends on the facts.

03:15And, you know, I think if you, once it's public, it's, you know, it's open to everybody to obviously

03:24see the facts.

03:26So once an announcement's made.

03:29So I think, you know, it all depends on the circumstances and, you know.

03:34So philosophically, if I know a company in my district is about to get approved by CMS for Medicare,

03:40that means their stock's likely going to go up.

03:42If I put that information up before anything was announced, would that be, in your philosophical view,

03:48market manipulation?

03:50Yeah, it just depends.

03:52I mean, I think, you know, if the person isn't trading himself, I don't really see that as manipulation.

03:59I just, I think it just depends on, you know, what the circumstances are.

04:04But if my husband and my brother and my neighbors all traded at that point, not me,

04:11would that be market manipulation, potentially, under your philosophical viewpoint?

04:15Well, the problem with, with this whole, you know, area is that it's all very, very circumstantial,

04:22you know, built on circumstantial, circumstantial evidence.

04:25So, but, you know, the, the, I share concern about any kind of untoward activity in the marketplace

04:33that, you know, goes against the law and SEC rules.

04:37And so, I assure you that, you know, we will investigate.

04:41But just generally, the 23 seconds I have left, do you think, my example I just gave,

04:46would that be worthy of looking closer at?

04:49We have a lot of smart people and very ambitious people in our enforcement division

04:55who read the papers and look at things.

04:57And they are quick to go to plant their flag to, to launch investigations.

05:02So, you know, I, I have confidence in, in our guys being able to, uh, I'll yield back.

05:10Thank you very much.

05:11The chair now recognizes the gentleman from Maryland, Mr. Ivey, for five minutes.

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