At least three lawmakers traded bank stocks last month as the federal government grappled with a banking crisis, according to financial disclosures analyzed by The Wall Street Journal.
The disclosures raise the question of whether lawmakers received inside information relating to the collapse of Silicon Valley Bank and Signature Bank that may have guided their stock trades.
The crisis led to volatile price swings in bank stocks, creating opportunities for profit. Regulators who played a central role in the response privately briefed lawmakers on their plans to stabilize the banking system.
Lawmakers must disclose their stock trades within 45 days of the transaction, but they’re only required to report the amount in broad ranges.
Outrage over congressional stock trading took hold after former Sen. Richard Burr (R-N.C.) sold up to $1.7 million in stock shortly before the pandemic rattled markets; it picked up again after former Speaker Nancy Pelosi (D-Calif.) defended lawmakers’ right to trade stocks.
Here are lawmakers who reported trading bank stocks around the time of the bank failures.
Rep. Nicole Malliotakis (R-N.Y.)
Malliotakis, who sits on the House Ways and Means Committee, reported buying between $1,001 and $15,000 in New York Community Bancorp stock on March 17, a few days after meeting with regulators on the Signature Bank collapse.
The stock rose 32 percent a few days later when a subsidiary of the company announced it would acquire Signature Bank’s assets at a significant discount. The deal was brokered by federal regulators.
A spokesperson for Malliotakis told the Journal that a financial adviser recommended she purchase the stock as a long-term investment. The spokesperson said that Malliotakis learned of the New York Community Bancorp takeover on the same day as everyone else and wasn’t told ahead of time.
The disclosure filed by Malliotakis incorrectly stated that the trade was made by her spouse, even though Malliotakis is unmarried. Her spokesperson said she’d correct the error.
Rep. Earl Blumenauer (D-Ore.)
Blumenauer, who also sits on the House Ways and Means Committee, reported selling between $1,001 and $15,000 in Bank of America stock and buying up to $15,000 in Silicon Valley Bank stock on March 9, just one day before regulators shut the bank down. The latter trade wasn’t successful, as Silicon Valley Bank shareholders lost big.
On March 20, Blumenauer reported selling up to $15,000 in First Republic Bank, a San Francisco-based regional bank that was hit hard by the banking crisis. The bank stock had already lost most of its value to that point, down nearly 90 percent from the start of the month.
Blumenauer’s disclosure noted that the trades were made under his wife’s retirement portfolio.
A spokesperson said that Blumenauer doesn’t personally trade stocks and added that his wife uses a financial adviser who makes transactions without any input from her or Blumenauer.
Rep. John Curtis (R-Utah)
Curtis, a member of the House Energy and Commerce Committee, sold between $1,001 and $15,000 in First Republic Bank stock on March 16. The bank stock was already down big at that point but lost another 33 percent in value the next day.
Also on March 16, Curtis sold between $1,001 and $15,000 in Bank of America stock. The banking giant joined other large institutions in extending a lifeline to First Republic Bank that day.
According to a disclosure, the trades were made under a joint fund owned by Curtis and his wife.
Like many of his colleagues, Curtis was critical of proposals to ban lawmakers from trading stocks.
“For 40 years I’ve been building up a retirement, mostly in stocks. It’s not as easy as ‘don’t do stocks,’” he told the Journal in January 2022.
Source: Yahoo
