Sept. 16, 2014 SIGN IN | REGISTER
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Must Members Report Spouses’ Stock Trades?

Given the split, Congress stepped in. On Aug. 16, President Barack Obama signed an amendment to the STOCK Act that makes clear that transactions by spouses and dependent children must be reported. The next day, the House Ethics Committee issued revised guidance to accord with the amendment. 

The inclusion of transactions by spouses and children only further expands an obligation that was already quite demanding in the first place. The PTR requirement has caused many Members and staffers to increase the extent to which they monitor their investments. In general, it is not uncommon for an investor to leave transactions to a financial adviser, perhaps receiving quarterly updates. Now, those in Congress who are required to file PTRs need to monitor their transactions much more closely. 

The House Ethics memo states that filers are responsible for making sure that their broker, investment adviser, trustee or anyone else who makes reportable transactions all know that they must inform a filer. What counts as a reportable transaction is fairly technical and not always clear. Indeed, the House memorandum regarding the PTR requirement is 15 pages long. Thus, filers should make sure their advisers understand what counts as reportable, so they know when to inform the filer of a transaction. 

The inclusion of spouses’ and children’s transactions only complicates things. With any luck, your Member and his wife have a relationship such that she will not mind having her own investments made public as they occur. Just as your Member needs to monitor his own investment transactions, he will also now need a system to monitor his wife’s transactions as well. I hope they get along. 

And, one more thing. Don’t be late. Missing the deadline to report a transaction carries a $200 fine.  

C. Simon Davidson is a partner with the law firm McGuireWoods. Readers should not treat his column as legal advice.

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