A Seattle federal judge who threw out a $72 million damages judgment against Boeing Co. said he bought and sold between $1,000 and $15,000 worth of company stock while he was presiding over the case last year, records show.
Judge James Robert told Business Insider that the bank that managed his wife’s IRA purchased Boeing stock in April 2023. He said he sold the shares shortly after learning about it, and financial disclosure statements show the stock was sold twice, once in May and once in June.
It’s unclear whether Robert’s wife made a profit on the overall transaction. Based on the stock prices on the days her IRA bought and sold Boeing shares, at least one of the sales was a loss, but the second may have been profitable.
Electric aircraft startup Zunum Aero sued Boeing in 2020 and expanded the lawsuit in 2021, accusing the company and its suppliers of conspiring to take money from Zunum and steal plans for a short-range electric aircraft.
Roberts told BI the trade was a mistake and that he immediately took corrective action by selling his shares, but said he did not notify either lawyer or publicly acknowledge the transaction beyond financial disclosures required by law.
“There may be market movements, but they won’t influence my decision,” he said.
Focus on judges’ finances
Federal judges’ finances have come under scrutiny, with Supreme Court Justice Clarence Thomas’s lavish travel and Sonia Sotomayor’s book sales being the subject of critical articles.
The Wall Street Journal reported in 2021 that 131 federal judges had violated ethics laws by failing to recuse themselves from cases in which they or their family members had purchased or held stocks. Some judges blamed clerks, others said they didn’t realize they held assets that created conflicts of interest, and some admitted mistakes, according to the Journal.
Roberts, who is not a judge and was quoted in the Wall Street Journal article, said he was aware of the reports but was cautious about his trading. He said he didn’t realize his wife’s IRA was in a pooled fund that traded individual stocks until he received a monthly report on their trading activity.
A jury awarded Zunum a massive $72 million in June and found Boeing’s theft of trade secrets “willfully.” Boeing argued the jury misjudged the verdict. Roberts threw out the verdict earlier this month, concluding that the testimony wasn’t detailed enough to establish what Zunum’s trade secrets were. He and his family liquidated their Boeing stock more than a year before the verdict.
Bill Hodes, a former law professor who specializes in legal ethics, said he doesn’t consider a transaction to be much more than a technical violation unless it was accidental, quickly corrected and not repeated.
“I don’t know if the remedy is for him to rush into it, regret it and then announce it to the people involved,” he said.
Gabe Roth, of Fix the Court, a group that focuses on the Supreme Court and judicial ethics, said the level of caution Roberts showed is what a judge should be doing. He said the law allows judges to sell stocks to help them preside over cases.
Zunum could raise the issue on appeal, but it probably wouldn’t change anything, said Ross, who noted that when an issue like this arises and the judge has already spent significant time on the case, the law doesn’t require disbarment of the defendant.
“I think he probably should have communicated this to the parties involved,” Ross said.
The volume of Boeing shares traded is dwarfed by Robert’s total wealth: According to his 2021 annual disclosure, the most recent available, Robert owns millions of dollars worth of financial assets, much of which is diversified.
Robert told BI he thought his wife’s retirement account was managed like a mutual fund, which judges often hold to reduce the need for challenges, and only after receiving the statement did he realize the pooled funds were buying and selling individual stocks.
“I try really hard to follow the rules,” he said.
He said his wife eventually moved her retirement accounts back to Charles Schwab and hasn’t had any problems since.
Boeing and Zunum did not respond to requests for comment.