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WASHINGTON, DC – Reports revealed Monday that Rep. Tom Price (R-GA), a nominee for Secretary of Health and Human Services (HHS) bought biomedical stocks at a privileged, discounted rate, contrary to his congressional testimony this month. It is illegal for members of Congress to purchase or sell stock based on nonpublic information. Evidence now suggests that Rep. Price was only invited to participate in a privileged stock purchase through his connections to a company director and fellow congressmen. At the time of the stock purchase, Mr. Price was also helping to craft healthcare legislation with a direct impact on the company he invested in.
“Because of the authority they’re granted, our lawmakers have a unique responsibility to the voters, to put their constituents’ interests over their own interests,” said Andre Delattre, Executive Director of the U.S. Public Interest Research Group. “As a sitting Member of Congress actively working to pass health policy changes, to accept a special offer from a healthcare company, worth $50,000 at the time and much more now, is not ethical. It just doesn’t pass the look-yourself-in-the-mirror test. Mr. Price has abused the trust of the American public and should withdraw from his nomination for HHS Secretary immediately.”
As a public interest advocacy group, U.S. PIRG supported the 2012 passage of the STOCK Act, legislation which strengthened prohibitions against Members of Congress engaging in insider trading. Lawmakers are now requesting that the Securities and Exchange Commission investigate Mr. Price’s discounted investments in Innate Immunotherapeutics Ltd.
Mr. Price received stocks at a 12% discounted rate over other investors following a tip from a fellow member of Congress that Innate Immunotherapeutics Ltd. was holding a private placement offering. Mr. Price was one of fewer than 20 U.S. investors invited to participate in the offering, through which he purchased 400,613 shares at a discounted rate, making an immediate profit in the tens of thousands of dollars.
In addition to specifying that it is against the law for Members of Congress to trade on non-public information gleaned through the course of official business, the STOCK Act also creates an important system of real-time transparency of stock trading activity by members and staff. Under the law, lawmakers and congressional candidates, the president and vice president, members of the cabinet and high-ranking congressional and executive branch staff are required to file personal financial disclosure statements each year which are published online.
U.S. PIRG, the U.S. Public Interest Research Group, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.
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