Galef Proposes Bill to Prevent Insider Trading in State Government
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Two area state legislators have proposed a new bill that would prohibit state elected officials and certain employees from profiting through investments in stocks based on information they received in the course of doing their job.
Assemblywoman Sandy Galef (D-Ossining) and state Sen. Elijah Reichlin-Melnick (D-Nyack) recently introduced the New York Stock Act, which would look to stamp out insider trading among members of the legislature, executive and judiciary branches in the state government and their employees by making it illegal to have an unfair advantage in the stock market based on information that isn’t available to the general public.
It is a similar piece of federal legislation that was approved by Congress in 2012 following multiple instances of lawmakers in Washington who were found to have benefited from inside information.
Galef, who made the announcement last Thursday in downtown Ossining, said she and Reichlin-Melnick are trying to stop the problem before it happens – or worsens – in New York State. A suspected offender could be prosecuted under the proposed law.
“This is really a preventative measure,” Galef said. “We just want to be sure that our colleagues and the people who work in the state capitol are doing the right thing.”
Neither legislator was certain about how widespread a problem insider trading may be in Albany.
However, various New York State officials have had their share of ethics problems over the years, including the convictions of former Senate majority leaders Joe Bruno and Dean Skalos and former Assembly speaker Sheldon Silver.
Earlier this month Lt. Gov. Brian Benjamin resigned after he was arrested by the FBI for allegedly steering $50,000 in state money to a nonprofit organization run by a developer, who then contributed $25,000 to Benjamin’s state Senate campaign.
Reichlin-Melnick said the public must have confidence that state officials are not taking advantage of their positions for personal financial gain. The senator said he chooses to not invest in individual stocks, and while that would not be a requirement under the measure should it become law, he said he does not want even the appearance of corruption.
“A thriving democracy depends on trust in public governance,” said Reichlin-Melnick, who is carrying the bill in the Senate. “The New York Stock Act is a critical tool for preventing corruption and strengthening public trust for Albany.”
The bill provides for the legislative ethics commission to issue interpretive guidance regarding the prohibition of nonpublic information for private profit to each chamber, Galef said. The joint ethics commission would also issue relevant ethics rules applicable to executive and judicial officers and employees.
Initial public offerings of stocks are also prohibited to be bought by the officials and their employees under the proposed law.
While the legislation wasn’t in response to a specific matter in Albany, Galef said earlier in her tenure in the Assembly a company that produced potassium iodide pills was pitching to the legislature the need for all residents within a 50-mile radius of the Indian Point nuclear power plant to take the pill. That was a situation where had the legislation been approved it could have compromised legislators’ ethics, knowing that a pharmaceutical would have had a lucrative contract to distribute millions of pills, she said.
“That’s the type of type of action that’s happened in Washington,” Galef said. “We may not know that it could have happened in Albany, too. That’s why we’re doing this bill, to make sure that voters have confidence that that’s not going to take place.”
Reichlin-Melnick said corruption in Albany has been a problem on both sides of the aisle and this bill serves notice that insider trading will not be tolerated.
“This has been a bipartisan ongoing issue in Albany, Washington, Trenton, Connecticut, wherever you want to look around the country, but we want to clean up and we want to do better and I believe we can,” he said.
Martin has more than 30 years experience covering local news in Westchester and Putnam counties, including a frequent focus on zoning and planning issues. He has been editor-in-chief of The Examiner since its inception in 2007. Read more from Martin’s editor-author bio here. Read Martin’s archived work here: https://www.theexaminernews.com/author/martin-wilbur2007/
