Judge Sold Exxon Stock 5 Hours Before Lifting Drilling Ban

Judge Sold Exxon Stock 5 Hours Before Lifting Drilling Ban

Federal Judge Martin Leach-Cross Feldman engaged in an oil spill cleanup of his own last week. Five hours before he rendered his decision blocking the six-month moratorium on deep-water Gulf oil drilling, Judge Feldman sold his personal holdings of Exxon Mobil stock. Exxon was not a party to the case under consideration but will directly benefit from the Judge’s action.

Judge Feldman may have lost a few dollars on the sale; he definitely lost much more in credibility. “The judicial canons require that judges be aware of their investments,” wrote Steven Mufson and Joe Stephens in the Washington Post:

“Judicial ethicists said that, had he been aware of his holdings, Feldman should have disclosed the ownership or recused himself at the case’s outset if he thought it posed a conflict or raised questions about his impartiality. The court docket indicates that Feldman signed several orders before the sale.

“‘I’ve never heard of a situation like this,’ said Jeffrey M. Shaman, a judicial ethics specialist and law professor at DePaul University.

“The judge may have thought the stock did not create a substantial conflict, legal analysts said, but the fact that he apparently felt compelled to sell the stock and disclose it could be seen as indicating otherwise.

“‘The fact he sold his holdings in Exxon does not somehow cleanse what he did in the case,'” Shaman said. ‘If he made [earlier] rulings in the case, those rulings are subject to question.’

“The government on Friday appealed Feldman’s ruling but made no mention of any potential conflict.”

Indiana University Law School professor Charles Geyh told the Wall Street Journal that “a technical reading of the rules ‘might lead you to conclude that the judge should have disqualified himself upfront rather than hung in there and divested later.'”

Judge Feldman released his 2009 financial disclosure form, which revealed a stock portfolio almost as energy-heavy as his 2008 form, which included Transocean, owner of the Deepwater Horizon. He sold his Transocean holdings last year.


Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

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