Meet Kelly Loeffler and Jeff Sprecher: the Most Corrupt Couple in Public Life

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It’s no surprise that the Trump administration opened the floodgates to corrupt public officials and criminals to work inside his Republican administration. This corruption will be even worse if the American people are dumb enough to elect Trump for a second term in 2024.

In Trump’s first term as president, there was no shortage of couples or families meet this low bar of acceptance—Mitch McConnell and his wife, Elaine Chao; the entire Trump family; Betsy DeVoss and her brother, Eric Price, head of Blackwater—the most visible is this odd couple of carpetbaggers from Atlanta, Georgia: Kelly Loeffler and her husband, Jeff Sprecher.

You have to be a pretty venal couple to get noticed in this group. Loeffler, age 50, is the incumbent Republican Senator from Georgia, and her husband, Jeff Sprecher, 65, is the chairman of the New York Stock Exchange and the CEO of the Intercontinental Commodity Exchange (ICE). While Sprecher is not an elected official, he is a public figure because he is the CEO and chairman of a publicly-held company and the New York Stock Exchange chairman.

Loeffler worked at the ICE, where she met Sprecher, who is 15 years her senior. What they probably had in common was their love of money and power, combined with their doing both with no accountability to shareholders or constituents. According to Bloomberg, the couple’s estimated net worth is $1 billion.

Both were involved in an insider trading scandal earlier this year when Loeffler was accused of trading on information she received in a confidential briefing about the impact of the COVID-19 virus.  She or her financial advisors then sold stocks that the virus would hurt.

A great question any average American would ask is Why a billionaire, the New York Stock Exchange chairman, and his wife, an elected Congressional official, engage in insider trading.

The answer: Because they could get away with it.

Loeffler and the other senators accused of insider trading got their get-out-of-jail-free cards because 1) they were Senators, 2) they were both major Republican donors and 3) a controversial rule, Rule 10b5-1., that benefits those in Congress.

According to attorney Patrick Daugherty, senior SEC partner at the Chicago law firm of

Patrick Daugherty

Foley & Lardner LLP,  SEC Rule  10b5-1 says that “if you are a corporate insider, you can enter into a plan that will allow for shares to be sold at stated intervals in dollar amounts, according to an algorithm with the trades done in a certain way.  This means the corporate executives take themselves out of timing decisions about when to buy or sell.  They give control to an outside advisor or brokerage firm that is not communicating with them.”

 

The rule is also outdated and controversial. Even outgoing SEC Chairman Jay Clayton, a Republican, said this rule needs to be reformed.

But, after an investigation by a Republican-led ethics committee, a Republican-led US Justice Department, and a Republican-led SEC, Loeffler and other involved senators were exonerated.  Meanwhile, her NYSE chairman’s husband was never sanctioned by his board, the NYSE board of directors, or the governance department.

(To see the details about the trading involved and how the trading discrepancies, see the article here on this site.)

This is a travesty since the NYSE is the pinnacle of corporate governance standards. Since its formation in 1794, no chairman of the NYSE has even been accused of insider trading, but the toothless NYSE board of directors, most of whom were appointed by Sprecher, gets their six-digit annual paychecks and looks at their laps when faced with corruption cases.

If these board members had a backbone, they would know that even the appearance of impropriety would get an employee fired from an exchange. At best, it shows bad judgment from an employee that would create a negative public image in the eyes of investors.  Trust is an essential element in any trading relationship. When the NYSE chairman is using confidential information for personal gain, as Sprecher and his wife are accused of doing, the accusation alone tars the trading reputation and ability to do business.

These may be old-fashioned ethical beliefs, but they govern commercial trade and investment.  At the old NYSE, “your word is your bond” used to mean something, but with Sprecher in charge, that adage is now garbage.

At  At the old NYSE “your word is your bond” used to mean something, but wth Sprecher in charge, that old adage is now garbage.

Sprecher’s involvement in an insider trading scheme deserved an independent investigation into whether the NYSE wants to preserve a modicum of corporate governance standards.  First, his timetable and disclosure of trades do not match his testimony.  Then, the interaction between his financial advisors and their knowledge of the insider information Loeffler received in the Senate briefing on COVID needs more details.

The cover story is that the financial advisors were both smart enough to manage their money without needing insider information. But what about the communications in the days after the confidential briefing? What were the trades that ensued after the briefing?

The Most Corrupt Couple in the US

So, in a US political culture awash in corruption and subservience to any source of money, how do you become the most corrupt couple in the US?

Here are some suggestions:

  • Become the ultimate opportunist and a corrupt, blind Trump clone.  It also helps when you are in the same industry and work for the same company, in this case, the ICE.
  • It’s even better when you are the chairman of the New York Stock Exchange, the symbol of American capitalism.  You cannot throw Sprecher out without tarnishing the image of the NYSE.  However, you cannot run the NYSE with a straight face if you are named in an insider trading scandal. This means the NYSE board and the NYSE-listed public companies must decide if they want an accused insider trader as their chairman and symbol of corporate governance. I bet that they won’t do anything.
  • Insider trading is the new norm in corporate governance. In this report by NPR,  “data from the 1980s through last year found that under the Trump administration, the SEC brought just 32 insider trading enforcement actions in 2019, the lowest number since 1996.”  This is the lowest number of insider trading cases since the Reagan administration.
  • Loeffler used her position as US Senator from Georgia to vote in favor of regulations that would benefit her and her husband personally. This was done through rules that the Commodity Futures Trading Commission (CFTC) considered, which came before her committee for a vote.  The Wall Street Journal and Mother Jones Magazine reporter David Corn reported this story in detail.
  • Loeffler distorts reality to appeal to Trump supporters.  In this video clip, Loeffler repeatedly asks who won the 2020 elections.  She cannot say Biden won the election.
  • Evangelicals also endorse Loeffler and her other Republican Senatorial candidate. It looks like evangelicals walk a fine line with the “Thou shalt not steal” commandment, among others, such as letting Trump off the hook with the “Thou shalt not commit adultery” commandment.

So, as we enter 2021, it looks like it’s open season on insider trading, making a mockery of corporate governance, and that situational ethics are the new norm. Caveat emptor.

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