PROFESSOR SARAH WILLIAMS’ RESEARCH ON CONGRESSIONAL INSIDER TRADING TO BE PUBLISHED BY CARDOZO LAW REVIEW
November 2023 — Professor Sarah Williams has accepted an offer from Cardozo Law Review to publish her recent article, “Regulating Congressional Insider Trading — The Rotten Egg Approach.” Her article will be printed in the spring of 2024. A draft of this work is available online.
Professor Williams’ article addresses the persistent problem of profitable trading by members of Congress in securities related to national events receiving attention by the legislative body. Financially beneficial purchases and sales of securities were made by certain lawmakers on Capitol Hill during the regional bank crisis earlier this year, the COVID-19 pandemic, and the financial crisis of 2008. The Stop Trading on Congressional Knowledge Act of 2012 was passed to curb insider trading by federal legislators and others, but has proven ineffective. While insider trading is typically addressed using the antifraud provisions of the Securities Exchange Act of 1934, Professor Williams’ article proposes leveraging the disclosure regime of the Securities Act of 1933 (dubbed the “Rotten Egg” statute) to address such trading activity. Under her proposal, federal lawmakers would disclose securities transactions in SEC filings and be subject to scrutiny by the brokers who facilitate their trades.
Professor Sarah Williams is an Assistant Professor at Penn State Dickinson Law; her research focuses on the gatekeepers of federal securities regulation, including auditors and broker-dealers. Prior to joining Dickinson Law, Professor Williams practiced law as a securities regulator. She was Deputy Director at the Public Company Accounting Oversight Board and Associate General Counsel at NASD, now FINRA. She spent several years at the U.S. Securities and Exchange Commission, serving as staff attorney and branch chief in its Division of Enforcement, then as Counsel to SEC Commissioner Isaac C. Hunt, Jr. Professor Williams began her legal career as an associate at Arnold & Porter in Washington, D.C.