- Members of Congress caught trading bank stocks amidst national bank health crisis
- New bill introduced to eliminate stock trading by lawmakers with insider knowledge
- Nearly one-fifth of federal lawmakers or their immediate family implicated in stock trading controversy
In the midst of bank health concerns sweeping the nation, Rep. Jared Moskowitz's kids' investment account ditched some Seacoast Banking Corp. shares worth a cool $65,000 to $150,000. Just a couple of days later, Moskowitz spilled the beans on a TV interview about attending a bipartisan congressional briefing on the chaos. As fate would have it, Seacoast Banking shares took a nosedive, dropping nearly 20% when investors panicked over Silicon Valley Bank and two other banks going belly up.
A spokesperson for Moskowitz explained that the share sales were recommended by the congressman's financial advisor to diversify his children's holdings. Moskowitz confirmed that the congressional briefing went down right before his TV appearance and after the shares were sold.
But this isn't an isolated incident. Members of Congress continue to buy and sell stocks in industries that cross paths with their official duties. Capitol Trades, a project by data firm 2iQ, found that in March alone, at least eight members of Congress or their close relatives sold bank stocks. And although technically legal, this kind of stock trading raises eyebrows since lawmakers often have insider knowledge about the companies and industries they oversee.
Last year, a New York Times investigation revealed that nearly one-fifth of federal lawmakers or their immediate family members bought or sold stocks that could have been impacted by their legislative work over a three-year period. Despite efforts to pass legislation limiting or banning trading by members of Congress, the practice persists.
Senators Jeff Merkley and Sherrod Brown recently announced a new bill aimed at putting an end to this controversial practice, with 19 co-sponsors in the Senate. A House version of the bill is co-sponsored by Rep. Michael Cloud and Rep. Raja Krishnamoorthi. Brown called out members of Congress for trading bank stocks while having insider information, emphasizing the need for reform.
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