According to Quiver Quantitative’s analysis of public declarations of stock sales, Josh Gottheimer, a Democrat from New Jersey and member of the financial services committee, disclosed a sale of shares in Silicon Valley Bank (SVB) on March 9. This transaction was valued between $1,000 and $15,000 and took place a day before the bank collapsed, sending U.S. banking stocks plummeting.
Gottheimer, the US newspaper noted, reportedly sold his shares in Charles Schwab Corp. on March 6 and March 14 for a similar amount. Gottheimer also sold his shares in Seacoast Banking, a troubled Florida bank, on March 29. The share price of Seacoast Banking has fallen by 10 percent since the transaction.
According to Quiver Quantitative’s analysis, the New Jersey Democrat was one of the most active stock dealers in the House of Representatives in 2022, with over 380 transactions. The Congressman’s representatives, however, pointed to a statement from last year in which he stated that his financial decisions were made at the discretion of a third-party financial consultant.
Gottheimer was just one of the several Congress lawmakers who sold their banking stocks last month when the industry was in upheaval.
Daniel Goldman, a House Democrat representing a New York district, sold a Schwab position worth between $15,000 and $50,000 on March 6. On March 15, he sold his shares in San Francisco-based First Republic Bank. Since then, First Republic shares have dropped by more than half.
The allegations of stock sales by members of Congress have raised concerns about potential conflicts of interest, as lawmakers can access non-public information that could impact stock prices. Insider trading, which involves using non-public information to gain an unfair advantage in stock trading, is illegal and unethical.
Public advocacy groups worry that enabling government officials to own or trade stocks could create a conflict of interest with their official obligations, even if they are legally compelled to declare them.
“It exemplifies why public trust in the elected officials is so low,” Danielle Caputo, legal counsel for ethics at the Campaign Legal Centre, a campaign watchdog organisation, told Financial Times.
Members of Congress can currently wait up to 45 days to register their trades, so more transactions may emerge in times to come.
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