A recent analysis conducted by Capitol Trades revealed that several members of Congress, as well as their close relatives, engaged in the selling of bank stocks during the highly turbulent financial period in March. This activity coincided with meetings held by some lawmakers with banking regulators to discuss the ongoing financial crisis.
One example highlighted in the analysis involves Representative Jared Moskowitz, who sold shares worth $65,000 to $150,000 of Seacoast Banking Corporation (SBCF:US) on the same day Silicon Valley Bank (SIVBQ:US) collapsed. Subsequently, Moskowitz expressed concerns about potential contagion on social media and later commended the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department for their efforts in safeguarding depositors affected by the SVB collapse.
Similarly, Representative Dan Goldman sold shares of First Republic Bank (FRC:US) worth $1,000 to $15,000 on March 15, shortly after the bank experienced a significant drop in its share value. It is important to note that First Republic Bank later received a $30 billion rescue deal from major U.S. financial institutions, which prevented its failure.
Additionally, the wife and children of Representative Ro Khanna sold shares of First Republic Bank on the same day. Several other lawmakers, including Representative Earl Blumenauer and Representative John Curtis, also reported selling up to $15,000 in First Republic Bank stocks following the banking crisis.
Meanwhile, Representative Nicole Malliotakis purchased shares of New York Community Bancorp NYCB:US) on March 17, after engaging in discussions with regulators regarding the collapse of Signature Bank. Subsequently, a subsidiary of New York Community Bancorp announced its acquisition of a significant portion of the failed Signature Bank.
In response to these stock selloffs, Senators Jeff Merkley and Sherrod Brown introduced the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act. This bill aims to prohibit members of Congress, their spouses, and children from exploiting their positions for personal financial gain through ownership or trading of securities, commodities, or futures. The act seeks to increase accountability and transparency to prevent the misuse of privileged information for personal benefit.