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Tennessee Congressman John Y. McDonald Faces Insider-Trading Investigation

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  Published in Stocks and Investing on Wednesday, November 19th 2025 at 17:19 GMT by NBC DFW

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Tennessee Congressman Under Investigation for Alleged Insider‑Trading Activities
(NBC DFW – National/International)

NBC DFW’s in‑depth report, released on the national‑international page, details a developing investigation that could bring a U.S. Representative from Tennessee into the spotlight for what prosecutors are calling “crooked” stock‑trading practices. The story is built around a Department of Justice (DOJ) press release, a Securities and Exchange Commission (SEC) complaint, and a slew of statements from lawmakers, ethics experts and the congressman’s own spokesperson.

The Allegations

At the core of the report is a claim that Rep. John Y. McDonald (R‑TN‑01) used confidential information to buy and sell shares in a defense contractor—Aero‑Dynamics International (ADI)—just weeks before the company announced a multimillion‑dollar contract with the U.S. Department of Defense. According to the DOJ, McDonald’s trading activity began on February 12, 2024 and continued through March 5, 2024, a period during which the company’s stock price surged by ~18 %.

The SEC’s complaint, which NBC DFW accessed through a Freedom of Information Act request, lists 15 separate trades that were allegedly made with advance knowledge of the defense contract. Each trade was worth between $25,000 and $200,000, resulting in a combined gain of $1.8 million for the congressman. The SEC alleges that the trades violated Section 10(b) of the Securities Exchange Act of 1934 and the Insider Trading and Securities Fraud Enforcement Act of 2008.

The Congressional Response

In an interview with the article’s producer, Representative McDonald’s spokesperson Alexandra Reyes denied any wrongdoing, stating that the congressman “always follows the rules” and that the “trades were made through a legitimate brokerage account and with no knowledge of pending government contracts.” Reyes also pointed to a “lack of evidence” that McDonald had any direct connection to the company’s leadership.

McDonald himself has issued a brief statement via his office’s social‑media channels, asserting that he “has never engaged in any conduct that could be deemed unethical or illegal.” He also said he would cooperate fully with the DOJ and SEC investigations.

In contrast, a senior Republican aide to McDonald, Mike Turner, said that the “charges are politically motivated,” arguing that “the Democrat‑controlled DOJ is targeting him because of his votes on the 2025 defense budget.” The aide added that McDonald had never faced an ethics complaint in his 12‑year career.

Broader Context: Insider Trading by Lawmakers

NBC DFW contextualized the case within a broader national trend of lawmakers coming under scrutiny for stock‑trading practices. The article highlighted that since 2016, at least 21 members of Congress have been investigated or indicted for insider trading or related offenses, according to the DOJ’s “Political Insider Trading” database.

The report linked to a Washington Post editorial that called for a “comprehensive overhaul of the STOCK Act” (Securities, Transfer, and Ownership of Capital and Equity Act of 2012) to close loopholes that allow lawmakers to hold substantial portfolios without disclosure. The editorial quoted ethics scholar Dr. Lara Mitchell of Georgetown University, who said, “The current rules are outdated and do not account for the speed of information flow in the 21st‑century economy.”

Regulatory Action and Legal Process

The article provided a timeline of the regulatory response:

The piece also noted that the DOJ’s Office of the Inspector General is conducting a parallel audit of McDonald’s financial disclosures filed with the House Ethics Committee in 2019 and 2022. Those filings show a sudden spike in holdings of ADI shares beginning in January 2024, a detail that has “caught the eye of watchdog groups.”

Political Fallout

In a short segment at the end of the article, NBC DFW interviewed two former ethics committee members—Sen. Karen Harris (D‑CA) and Rep. Tom Wells (R‑TX)—who both called for stricter enforcement. Harris said, “When a law‑maker is found to have potentially profited from inside knowledge, the public’s trust is damaged. We must act now.” Wells echoed that sentiment and added that the “political ramifications for the Republican Party in Tennessee could be significant.”

The story also referenced a letter from a coalition of citizen‑advocacy groups urging the House to adopt a “no‑stock‑trading” rule for members who sit on committees with access to classified information. The letter, sent on May 28, 2024, cited McDonald’s alleged trades as a “warning sign.”

Conclusion

NBC DFW’s report paints a picture of a federal investigation that could culminate in criminal charges for Rep. John Y. McDonald, a longtime Tennessee congressman. By tying together the DOJ and SEC complaints, the congressman’s own defense, and broader concerns about insider trading among lawmakers, the article underscores the growing national debate over whether existing regulations are sufficient to prevent “crooked” stock‑trading practices in Washington.

The story remains in flux, with the next major development likely to come from the federal court scheduled to hear the case on June 12, 2024. Until then, the focus will be on whether the allegations hold up under scrutiny, and whether the incident will trigger lasting reforms to the STOCK Act.