US Lawmakers Went on Bank Stock-Selling Spree Amid Banking Crisis

Member of the Congressional Hispanic Conference (CHC) Rep. Nicole Malliotakis (R-N.Y.) speaks during a news conference at the U.S. Capitol in Washington, D.C., on Feb. 1, 2023. (Alex Wong/Getty Images)

Dozens of members of Congress and their close relatives continued to sell off banking stocks amid the extreme financial turbulence in March prompted by the collapse of Silicon Valley Bank (SVB), according to an analysis by Capitol Trades.

Many of the selloffs came at the same time as some of the lawmakers were actively meeting with banking regulators to discuss the financial turmoil.

The analysis by the platform shows that Rep. Jared Moskowitz (D-Fla.) sold $65,000–150,000 worth of Seacoast Banking Corporation shares on March 10, the same day that SVB failed.

Posting on Twitter regarding the collapse of SVB two days later, Moskowitz wrote, “Very concerned we will see contagion come Monday if action isn’t taken.”

In an interview with MSNBC shortly after, Moskowitz said he was happy to see the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department had “stepped up” to protect depositors impacted by the collapse of SVB and that it was the right decision to do so.

“We have to try and contain this from spreading among other banks. I am still worried about tomorrow, Monday, when the markets open,” he said.

“There are a lot of people working behind the scenes on a bipartisan basis ... I got off a bipartisan briefing, and there are Democrats and Republicans in both chambers worried about this and working with the administration to try and prevent contagion,” Moskowitz added.

Seacoast Banking shares fell nearly 20 percent on March 13.

According to the analysis, Rep. Dan Goldman (D-N.Y.) also sold $1,000–15,000 worth of shares of First Republic Bank on March 15, two days after its shares plunged more than 60 percent in premarket trading amid concerns it might be next to collapse.

Silicon Valley Bank customers wait in line at SVB headquarters in Santa Clara, Calif., on March 13, 2023. (Noah Berger/AFP via Getty Images)

Other Lawmakers Follow Suit

The bank later received a $30 billion rescue deal from 11 of the largest financial institutions in the United States, staving off another failure.

Elsewhere, the wife and children of Rep. Ro Khanna, (D-Calif.) sold $1,000 to $15,000 shares of First Republic Bank on March 15.

According to separate financial disclosures analyzed by The Wall Street Journal, a string of other lawmakers, including Rep. Earl Blumenauer (D-Ore.), who also sits on the House Ways and Means Committee, and Rep. John Curtis (R-Utah), a member of the House Energy and Commerce Committee, reported selling up to $15,000 in stocks of First Republic Bank in the days after it was hit by the banking crisis.

Curtis also sold Bank of America shares.

Meanwhile, Rep. Nicole Malliotakis (R-N.Y.), 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 to discuss the collapse of Signature Bank, according to the publication.

“Both last night and this morning I have been meeting with the Federal Reserve, U.S. Department of Treasury, Governor [Kathy] Hochul, and New York State Department of Financial Services Superintendent Adrienne Harris to discuss the closure of Signature Bank,” her office said in a March 13 statement posted to her official Twitter account.

A subsidiary of New York Community Bancorp announced on March 19 that it would buy a large portion of the failed Signature Bank under a $2.7 billion deal with U.S. regulators.

People walk by the First Republic Bank headquarters in San Francisco, Calif., on March 13, 2023. (Justin Sullivan/Getty Images)

Senators Introduce Trading Bill

In an emailed statement to The New York Times, which also reported on the stock selloffs, a spokesperson for Moskowitz said that the congressman’s financial adviser has suggested the Seacoast share sales as a way to “diversify his young children’s holdings.”

Moskowitz said the congressional briefing on the bank crisis had taken prior to his television interview and after the shares were sold.

A spokesperson for Goldman told the publication that his portfolio is “managed by a third party without his knowledge” and that he will be establishing a blind trust to “avoid any appearance of a conflict of interest.”

Khanna told the publication that his filings relate to trades made by a “diversified trust” belonging to his wife and young children and that he is not involved in it.

A spokesperson for Curtis did not respond to the publication’s requests for comment.

The Epoch Times has contacted his office for comment.

Malliotakis’s spokesperson told The Wall Street Journal that her financial adviser recommended she make the trade and denied having any knowledge of New York Community Bancorp’s plan to buy failed Signature Banks assets, while a spokeswoman for Blumenauer told the outlet that he was not aware of that trade as it was made by his wife

Details regarding the lawmaker’s stock selloffs come shortly after Sen. Jeff Merkley (D-Ore.) and Sen. Sherrod Brown (D-Ohio) led 21 senators in introducing the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act aimed at banning congressional members, their spouses, and children from “abusing their positions for personal financial gain” by owning or trading securities, commodities, or futures.

“It’s simple: members of Congress are supposed to serve the American people, not their stock portfolios,” said Brown in a statement. “Elected officials have access to private information that can affect individual companies and entire industries. We need more accountability and transparency to prevent members from abusing their positions for personal gain.”