Dozens of Federal Judges Have Had Financial Disputes: What You Need to Know

A Wall Street Journal investigation found that federal judges across the country violated United States law and judicial ethics by overseeing nearly 700 court cases involving companies in which they or their families held shares .

Following the Journal’s articles, judges in more than 300 cases informed the courts that they had presided over the prosecution incorrectly and that the cases could be reopened.


In the largest investigation into the lawsuits in the United States, the Journal found that 131 federal judges improperly heard 685 court cases between 2010 and 2018 in which they or their family members held shares in companies. who were claimants or defendants in the litigation. Two of the judges sat on appellate courts; the other 129 were district judges, also called trial judges. The Journal review examined civil cases.

About two-thirds of federal district judges disclosed holdings of individual shares, and nearly one in five of those who improperly heard at least one case involving a business in which they or their families had a stake.


Nothing prohibits judges from owning shares, but a federal law of 1974 prohibits any “ownership of any legal or equitable interest, however small,” in a party to a case before a judge. This law and the United States Judicial Conference, the governing body of federal courts, require judges to avoid even the appearance of conflict.

The ban on holding even a single share of a company while presiding over a case involving the company obliges judges to be vigilant about their assets, in particular by inquiring about the actions of spouses and children. minors.

The Judicial Conference requires courts to use computer conflict checking software to help identify cases where judges should step down. Judges do not need to disqualify themselves in cases involving banks where they have mortgages or checking or savings accounts, or recuse themselves because of mutual fund holdings.


The Journal found that judges did not disqualify themselves as required in all parts of the country. They included judges appointed by almost every president, from Lyndon Johnson to Donald Trump.

When there were contested petitions in cases involving companies in which the judges had a financial interest, two of their three petition decisions were in favor of those companies.

Dozens of judges or their families not only held company shares in their courtrooms, but traded them while the judges presided over cases.

Legal experts said the activity the Journal found amounts to widespread disregard for judicial conflict of interest laws. Indiana University law professor Charles Geyh said an isolated violation could be considered an oversight. But the Journal’s general conclusions raise “a more systemic problem of judges chronically neglecting their duty to challenge in such cases.”


The Journal reviewed hundreds of financial disclosure forms filed each year from 2010 to 2018 with the U.S. Courts Administrative Office. The forms, filed by federal trial and appeal judges, are not online. The Journal used court data as obtained and digitized by the Free Law Project, a non-partisan, non-profit legal research organization.

Next, the Journal compared judges’ stocks to tens of thousands of court records, finding 685 violations. Researchers who reviewed the Journal’s analysis said its methodology was sound.


The judges offered a variety of explanations for the violations. Some blamed the clerks. Some said their business to avoid lists contained misspellings that thwarted conflict filtering software. Some have said they only have nominal roles in cases, such as confirming settlements, although there are no statutory exemptions for such roles.

Some judges misunderstood the law, wrongly claiming that they did not have to recuse themselves as their shares were held in accounts managed by professional fund managers.

Judge who committed 36 disqualification violations, after first saying he “never really paid much attention” to his actions and was unfamiliar with ethics law , told the Journal, “I am embarrassed that I did not correctly understand and apply the stock ownership rule.

The Potter Stewart American Courthouse in Cincinnati.


Sam Greene / The Cincinnati Enquirer / Associated Press


After being alerted to the violations by the Journal, 57 judges ordered clerks as of September 29 to notify parties in 345 lawsuits that they should have disqualified themselves and that cases could be reassigned and reopened.

One of those cases was a violation in a New York federal court involving Exxon Mobil Corp.

Lawyers for the losing party who sued an oil company unit have now asked an appeals court to overturn the decision and order a review by a new judge due to “the inevitable appearance of bias that results from these unfortunate circumstances “. The court clerk said the judge’s holdings in Exxon had no bearing on his decision in favor of the company.

In another case, in Alabama federal court, a judge ruled against two homeowners in a foreclosure case against Wells Fargo & Co. The judge had purchased shares of Wells Fargo about two weeks after receiving the case . “It’s outrageous,” said one of the owners when told the judge owns the stock in the bank. “How am I supposed to know she owns stock in Wells Fargo?” “

The owners have asked the court to reopen the case. The court has assigned a new judge to their trial. The court clerk said the judge’s holding of shares had not affected his decisions in the case.


If a judge notifies a court clerk of a challenge violation, the parties have the option of asking the court to rehear the case with another judge.

If you have an ongoing case involving a business, you can ask your attorney to contact the U.S. Courts Administrative Office to obtain the judge’s latest financial disclosure forms to determine if they have any conflicts or violations. But disclosures are only filed annually.

If anyone requests to see the judges’ financial information, the judges are notified who requested. Some lawyers say this discourages them from asking questions, for fear of annoying judges in whose courtrooms they frequently appear.

Write to Michael Siconolfi at [email protected], Coulter Jones at [email protected], Joe Palazzolo at [email protected] and James V. Grimaldi at [email protected]

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