Several members of Congress sold banking stocks before and during the market turmoil last month, with nine individuals identified so far.
Among these were Josh Gottheimer, a New Jersey Democrat and member of the House financial services committee since 2019, who sold shares in Silicon Valley Bank on March 9, valued between $1,000 and $15,000, according to Quiver Quantitative’s analysis of public disclosures of stock sales.
The bank failed the next day, causing a massive downward spiral in US banking stocks. Gottheimer also reported sales made on March 6 and March 14 of shares in Charles Schwab worth a similar amount. Representatives for Gottheimer pointed to a statement from last year, in which they said his financial decisions were made at the discretion of a third-party financial adviser.
Advocacy groups contend that owning individual company shares creates a conflict of interest that undermines public trust. “It exemplifies precisely why people have such little faith in our elected officials,” said Danielle Caputo, legal counsel for ethics at the Campaign Legal Center, a campaign watchdog group. “Regardless of whether or not you’re specifically directing a particular trade under current laws, it doesn’t matter. You’re ultimately accountable for those trades, which is why it’s essential to prohibit members of Congress from benefiting from trading single stocks.”
Gottheimer is one of several members of Congress who sold shares in banks during the recent market turmoil. Daniel Goldman, a House Democrat from New York, sold a Schwab position valued between $15,000 and $50,000 on March 6, and on March 15 traded shares in First Republic Bank, based in San Francisco, which was battered by the fallout from SVB. Since his sale, First Republic’s shares have plummeted by more than 50%.
Jared Moskowitz, a Democrat from Florida, sold a Seacoast position worth between $65,000 and $150,000 on March 10, the day its shares fell nearly 20%, two days after he attended a congressional briefing on the banking crisis. The share sales were first reported by the New York Times. A spokesperson for Moskowitz told the Times that the sales were “recommended by the congressman’s financial adviser as a way to diversify his young children’s holdings.”
John Curtis, a Utah Republican, and Earl Blumenauer, an Oregon Democrat, also reported selling shares in the First Republic on March 15 and 20, respectively, as 11 large banks were putting together plans to stabilize the lender with $30 billion in additional deposits. Blumenauer and Curtis did not respond to requests for comment from the Financial Times.
Although legislation to limit congressional ownership or trading in individual securities has been stalled in recent years, some lawmakers claim that support for an outright ban on the practice is growing. “Members of Congress are supposed to serve the American people, not their stock portfolios,” said Sherrod Brown, a Democratic US senator from Ohio. He has introduced a bill, which has attracted 22 co-sponsors, that aims to restrict owning stocks, commodities, and futures by members of Congress.
Currently, members of Congress are permitted to wait up to 45 days to report their trades, so additional transactions may still come to light.
