- Richard C. Blum sold about $1.5 million to $6 million of Allogene Therapeutics stock on Jan. 31 and Feb. 18, 2020, around the time senators received COVID-19 briefings and near the stock’s 2020 low.
- Sen. Dianne Feinstein said she did not attend the Jan. 24 briefing and had no role because her assets were in a blind trust and the trades were her husband’s decisions.
- The FBI reviewed the sales and closed the inquiry in May 2020 after Feinstein’s office provided documents supporting her noninvolvement.
- The episode nonetheless intensified criticism about conflicts of interest and the limits of current congressional trading and disclosure rules.
Read More
The stock transactions by Richard C. Blum in Allogene Therapeutics — executed on Jan. 31 and Feb. 18, 2020 — raised immediate concerns due to their timing, which closely followed closed-door Senate briefings about the COVID-19 threat. Per financial disclosure filings, these trades amounted to between $1.5 million and $6 million. On Jan. 31, Feinstein’s filings show $500,001-$1 million sold in ALLO stock, followed by a much larger sale ($1,000,001-$5 million) by Blum on Feb. 18.
Sen. Feinstein maintains: the investments were managed by her husband; her assets have long been held in a blind trust; she had no role in initiating or approving these trades. She further denied attending the Jan. 24 Intelligence Committee briefing cited by critics. Her office supplemented these statements by providing documents to the FBI attesting to her lack of involvement.
Federal investigators examined these transactions in context of broader scrutiny of pre-market-crash stock sales by several members of Congress. On May 26, 2020, the FBI closed the inquiry into Feinstein’s case, as well as similar probes involving Senators Kelly Loeffler and Jim Inhofe. The investigation concluded without charges after documents confirmed that Feinstein was not involved in the trades.
While legally exonerated, the episode reveals tension points in U.S. law and political norms: the transparency of blind trusts; the sufficiency of disclosure laws under the STOCK Act; the ethical expectations placed on public officials during crises; and the optics when officials’ actions intersect with confidential information. Public trust arguably suffered regardless of legal outcome.
Strategic implications include potential legislative reforms: tightening disclosure timelines; requiring abstention from trading in industries related to classified briefings; clearer enforcement mechanisms; and strengthening accountability for family investment practices tied to officials. Open questions still include whether existing ethics frameworks adequately address risk of implied insider knowledge, even when legally managed, and whether bipartisan measures will emerge to restore confidence.
Supporting Notes
- Blum sold between $1.5 million and $6 million in stock of Allogene Therapeutics on Jan. 31 and Feb. 18, 2020.
- Feinstein sold $500,001-$1 million of ALLO on Jan. 31; Blum’s larger sale on Feb. 18 was $1,000,001-$5 million.
- The trades happened shortly after a Jan. 24 Senate briefing that discussed risks from COVID-19.
- Feinstein claims all her assets are in a blind trust, that she did not attend the Jan. 24 briefing, and that she had no input in her husband’s investment decisions.
- The FBI requested documents from Feinstein showing her non-involvement; she handed them over.
- On May 26, 2020, federal prosecutors informed Feinstein’s attorney that the investigation had been closed, with no charges.
- The stock price of ALLO on Jan. 31 dipped as low as about $21.28, near its 2020 intraday low of $21.25, suggesting Blum sold near the bottom. [1 source in their inspiration]
- Feinstein defended herself publicly via tweets: “…all assets in a blind trust… no control… reports I sold any assets are incorrect,” and that the company was unrelated to coronavirus work.