Wednesday, July 17, 2024

At least 9 members of the US Congress sold bank stocks amid turmoil last month


At least nine members of Congress sold banking stocks before and during the market turmoil last month, including a member of the House Financial Services Committee who sold Silicon Valley bank stock before it failed .

Josh Gottheimer, a New Jersey Democrat and a member of the Financial Services Committee since 2019, disclosed on March 9 the sale of shares in the California bank, worth between $1,000 and $15,000, according to the analysis Public Disclosure of Stock Sales by Quiver Quantitative. The SVB collapsed the next day, causing a sharp drop in US banking stocks.

He also reported selling a similar amount of shares to Charles Schwab on March 6 and March 14. Schwab’s stock is down nearly 30 percent since March 7.

Gottheimer also reported on March 29 the sale of a position in Seacoast Banking, a Florida bank caught in turmoil whose share price has fallen a further 10 percent since the sale.

The trades come at a time when public advocacy groups question whether allowing government officials to own or trade stocks could lead to a conflict of interest with their official duties, even if they are required by law. to reveal them,

Representatives for Gottheimer pointed to a statement from last year in which they said their financial decisions were made at the discretion of a third-party financial advisor.

“I do not believe that members of Congress, judges, or any government employee in a policy role should be involved in the day-to-day trading of securities, including cryptocurrencies,” he said in the statement. A representative said she is in the process of setting up a blind trust.

Gottheimer’s filings made him one of the most active stock traders in the House of Representatives last year, with more than 380 trades, according to Quiver data.

Advocacy groups have argued that separate company stock ownership presents a conflict of interest that undermines public trust. “This highlights why public trust in our elected officials is so low,” said Danielle Caputo, legal advisor for ethics at the Campaign Legal Center, a campaign watchdog group.

“Whether or not you are specifically directing a specific trade under existing laws does not matter. You are ultimately responsible for those trades, and that is why members of Congress can profit from trading single stocks.” It is necessary to prohibit lifting.

Gottheimer is among several members of Congress who sold shares in banks last month as the turmoil eased.

Daniel Goldman, a House Democrat representing a district in New York, sold a Schwab position between $15,000 and $50,000 on March 6 and shares in San Francisco-based First Republic Bank on March 15, which was hit by the drop from SVB . Since that sale, First Republic’s shares have fallen by more than half.

Jared Moskovitz, a Democrat from Florida, reported selling a Seacoast position between $65,000 and $150,000 on March 10, the day its shares fell nearly 20 percent. The trades were made two days after he attended a congressional briefing on the banking crisis, and was first reported new York Times, A spokesman for Moskovitz told the Times that the share sale was “suggested by a congressional financial advisor as a means of diversifying the holdings of his younger children.”

John Curtis, a Utah Republican, and Earl Blumenauer, an Oregon Democrat, also reported selling shares in First Republic on March 15 and 20, as 11 large banks plan to stabilize the lender with $30bn in additional deposits. Were.

A representative for Goldman said: “Congressman Goldman does not engage in trading stocks in his portfolio, which is managed solely by an investment advisor.” He is also in the process of establishing a blind faith.

Blumenauer and Curtis did not respond to requests for comment from the Financial Times.

While legislation to impose limits on Congressional ownership or trading in individual securities has stalled in recent years, some lawmakers say there is support. Increasing Regarding banning the practice completely.

Sherrod Brown, a Democratic US Senator from Ohio, said in a press release, “Members of Congress should be serving the American people, not their stock portfolios.” she has introduced a billWhich has attracted 22 co-sponsors, aims to restrict ownership of stocks, commodities and futures by members of Congress.

Current rules allow members of Congress to wait up to 45 days to report their trades, so further transactions may yet emerge.