Justices Pare Holdings But Still Hold Numerous Stocks

Jun.06, 2008 in Market Outlook

Last Update: 6/6/2008 3:06:17 PM

By Mark H. Anderson and Christina M. Wright
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–Several U.S. Supreme Court justices sold a handful of
individual stock holdings in 2007, but some justices continue to hold numerous
investments requiring recusals if appeals involving certain companies come before
the court.

Annual financial disclosures released Friday confirm that Chief Justice John
Roberts Jr. sold stakes in Citigroup Inc. (C) and Cisco Systems Inc. (CSCO) so he
could vote in two major Wall Street securities cases. Roberts, who pushed for a
2006 tax law change that eases the tax burden judges face when they unwind stock
positions, also sold Merck & Co. Inc. (MRK) and Becton Dickinson & Co. (BDX)
holdings in 2007.

Roberts sold a stake in Cisco Systems worth between $50,000 and $100,000 in March
2007. The move allowed him to be the fifth vote in the 5-3 Stoneridge ruling that
restricted the ability of shareholders to sue lawyers, accountants and other
third parties that do business with corporations.

The disclosures also show Roberts sold between $50,000 and $100,000 of Citigroup
stock a week before the court heard arguments in Credit Suisse Securities v.
Billing, a case where the court ruled 7-1 that Wall Street firms are immune from
certain class-action lawsuits brought under federal antitrust laws.

Justice Samuel Alito also pared some of his stock holdings by selling a stake in
Intel Corp. (INTC) and selling part of his holdings in Bristol-Myers Squibb Co.
(BMY), McDonald’s Corp. (MCD) and Exxon Corp. (XOM).

Exxon appeals cases to the high court regularly and Alito has in the past recused
himself from those matters. Although he sold between $100,000 and $250,000 of his
Exxon stake, he continues to hold a similar amount.

Justice Stephen Breyer, who holds a large portfolio of stock and fund
investments, said he sold Alltel Corp. stock in November, 2007 worth between
$50,000 and $100,000. Breyer also sold stakes in PartnerRe Ltd. (PRE) and
Scottish Power PLC (SPW.PZ).

Chief Justice Roberts and Justices Breyer and Alito are the most likely justices
to recuse from a case due to stock conflicts. As of the end of 2007, Chief
Justice Roberts held 16 individual stocks while Justice Breyer held 39 and
Justice Alito five.

The other members of the Supreme Court hold few if any stock investments and
instead favor diversified investments, bank accounts and property for their
investments. Justice Antonin Scalia in 2007 sold his one individual stock holding
- Chase Packaging Corp. (CPKA) - for less than $15,000.

Last month the Supreme Court could not act on an apartheid lawsuit filed against
more than 30 companies because three justices had financial conflicts and one
justice’s son worked for an involved company. The lack of a quorum in a case is
rare, but justices routinely recuse themselves from several cases every term. The
court also occasionally deadlocks when only eight justices are on a case, as it
did in March 2008 in a case involving a unit of Pfizer Inc. (PFE). Chief Justice
Roberts was recused from the Pfizer matter, known as Warner-Lambert v. Kent.

The annual financial disclosures, released in early June of each year, require
reporting of assets in bracketed ranges.

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