Insider trading remains a persistent problem in the financial industry, with US politicians perceived to be some of the most active inside traders worldwide, a notable example being Nancy Pelosi.
But some political representatives time their trades so perfectly that it is impossible for investors not to ask themselves, “how much do these people know exactly?”
Jared Moskowitz, the US representative for Florida’s 23rd congressional district, conducted one of these trades.
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Moskowitz sold over $100,000 worth of Seacoast Bank (NASDAQ: SBCF) stock on December 14. And this wouldn’t be so surprising if it wasn’t for the fact that this stock’s price peaked in value on that date and crashed immediately after.
Since then, SBCF stock has lost -20.59% of its value, bringing its price from $29.28 to $23.25 at the time of reporting.
Previous trades that raise eyebrows
In March last year, amid concerns about the health of the nation’s banks, an investment account owned by Moskowitz’s children divested Seacoast Banking Corporation shares valued between $65,000 and $150,000. This trade happened two days before SBCF shares fell by over -20%.
According to a spokesperson for Mr. Moskowitz, the congressman’s financial adviser, recommended selling Seacoast shares to diversify his young children’s holdings. The US representative clarified that the congressional briefing on the bank crisis occurred just before the shares were divested.
Calls for insider trade banning
The existing regulations regarding lawmakers’ stock trading were established with the enactment of the STOCK Act in 2012, signed into law by then-President Obama. This legislation explicitly stated that insider trading laws apply to lawmakers and introduced the 45-day disclosure rule.
Lawmakers from both parties have introduced bills advocating a complete ban on stock trading. Sen. Josh Hawley (R-MO) proposed the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, highlighting Paul Pelosi’s trading activities. Another bill, the Halt Unchecked Member Benefits with Lobbying Elimination (HUMBLE) Act, comes from Rep. Angie Craig (D-MN).
However, lawmakers still need to take concrete steps to act upon proposed bills and limit or ban insider trading.
