According to a financial disclosure report, Margaret D. Kirkpatrick, the wife of Democratic Congressman Earl Blumenauer, made a substantial investment in Silicon Valley Bank (SVB:US) stock shortly before its significant collapse. The stock plummeted by over 95%.
Kirkpatrick's purchase of SVB shares, ranging between $1,001 to $15,000, occurred on March 9, coinciding directly with the SVB's announcement of the need to raise $2.2 billion and the subsequent sale of $21 billion in assets. Subsequently, on March 10, the Federal Deposit Insurance Corporation (FDIC) took over the bank, leading to concerns of a banking crisis and sending shockwaves through the economy.
The collapse of SVB marked the second-largest failure of the U.S. banking industry, resulting in the delisting of the stock and a complete loss for shareholders. When the stock resumed trading on March 28, it was valued at $0.40 per share and has since remained below $1. Kirkpatrick had purchased the shares at approximately $106 per share, leading to significant losses.
It is important to note that the aforementioned information comes from Capitol Trades, a group that analyzes stock trades among members of Congress. The analysis indicated that Kirkpatrick acquired shares worth between $1,001 to $15,000. These findings raise questions about the financial decision-making within Congressman Blumenauer's family.
Following the bank failures, the FDIC announced the retention of a financial adviser to oversee the liquidation of approximately $114 billion in securities acquired during the takeover of Signature (SBNY:US) and Silicon Valley banks. Furthermore, the Federal Reserve is expected to release its review of SVB's oversight and regulation on May 1, as announced in March.
It is worth mentioning that Kirkpatrick's recent trades are preceded by a November 2022 demand for an investigation by the Foundation for Accountability and Civic Trust, a right-leaning watchdog group. The investigation was prompted by Kirkpatrick's healthcare stock purchase prior to the Biden administration's announcement of a $290 million payment to the company for drug supplies.
Congressman Blumenauer was previously featured in a September 2022 New York Times report that highlighted possible conflicts of interest among lawmakers in stock trading. The report revealed Blumenauer's disclosure of 31 stock buys, including holdings in defense contractor Raytheon (RTX:US), on the day Russia invaded Ukraine.
A spokesperson for Blumenauer clarified that the stock purchase was the result of a miscommunication and was promptly sold at a loss, emphasizing his unequivocal direction to avoid holding any individual stocks.