Note: Opinion 2010-25 recedes from this opinion
April 21, 1993
Disqualification/Ownership of Stocks and Bonds by Pension Fund and IRA
You state you are a newly appointed judge and you want to know whether you should disqualify yourself from hearing cases involving companies in which your former firm's pension and profit sharing plan or your IRA has invested through stocks, bonds or other securities. further, you have accumulated a substantial amount of money in the pension plan.
You state you have no control over how your funds are invested. They are managed by a money manager in New York. He or she invests all clients' funds in the same manner. In other words, if the manager purchases a particular stock for your fund, he or she will purchase the same stock for all other managed funds.
You receive a monthly statement showing specific investments and notices when stocks or bonds are bought and sold. If your funds were invested in a mutual fund, you believe it would not be necessary to disqualify yourself pursuant to Canon 3C(3)(c)(i).
Also you ask whether it is sufficient to describe the pension fund and identify its manager, or instead list all stocks and bonds in your fund on your financial disclosure statement.
Eight of the nine participating Committee members believe you must disqualify yourself if the pension fund or the IRA investment in a particular company is not insignificant. In reaching this opinion the Committee assumed that your particular judicial position is such that recusal is not burdensome on your colleagues and the parties.
Canon 3C(1) states that you should disqualify yourself if you have a financial interest in a party to the proceeding or you have an interest the could be substantially affected by the outcome of the proceeding. Canon 3C(3)(c) states "financial interest means ownership of a legal or equitable interest, however small..." (emphasis added). However, Canon 3C(3)(c)(i) states "ownership in a mutual or common investment fund that holds securities is not a "financial interest...unless the judge participates in the management of the fund."
The majority of this Committee has not considered the passive nature of your pension and IRA investments. Instead, the Committee was concerned that your impartiality might be questioned because of the amount of your financial interest in a company.
One Committee member states you should recuse yourself only when you hold a significant interest in a company. He notes that the new 1990 ABA Code of Conduct has abandoned "financial interest however small" and substituted economic interest that is more than de minimus. this committee's proposed revision of the Code to be submitted to the Florida Supreme Court states:
(i) ownership of an interest in a material or common investment fund that holds securities is not an economic interest in such securities unless the judge participates in the management of the fund or a proceeding pending or impending before the judge could substantially affect the value of the interest.
The Committee does not believe it has jurisdiction to answer your second question regarding your financial disclosure statement (Form 6). This form is drafted by the Florida Commission on Ethics pursuant to Article II, Section 8 of the Florida Constitution.
The Committee appreciates your inquiry and hopes this opinion will be helpful.
The Committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate. Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission and to the judiciary at large. Conduct that is consistent with an advisory opinion issued by the committee may be evidence of good faith on the part of the judge, but the Judicial Qualifications Commission is not bound by the interpretive opinions issued by the committee. Petition of the Committee on Standards of Conduct for Judges, 327 So2d 5 (Fla.1976).
With regards, I remain,
Yours very truly,
Harvey Goldstein, Chairman
Committee on Standards of Conduct Governing Judges
cc: All Committee Members
Participating members: Judges Tolton, Green, Kahn, Dell, Doughtie, Goldstein, Farina, Rushing and Edwards, Esq.
Office of State Court Administrator, Legal Affairs &Education