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One of the Senate’s Richest Members Hit With Ethics Complaint Over Stock Trades

Sen. Richard Blumenthal (D., Conn.) / Getty Images
• February 28, 2022 12:45 pm

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A watchdog group is calling for an ethics investigation into Sen. Richard Blumenthal's (D., Conn.) sale of shares of Robinhood, the brokerage company at the center of the "meme stock" speculation frenzy last year.

The Foundation for Accountability and Civic Trust (FACT) on Monday requested that the Senate Select Committee on Ethics probe Blumenthal's sale of Robinhood shares worth up to $2.5 million. Blumenthal, one of the wealthiest members of the Senate, failed to disclose the trades within the 45 days required under federal law, the Washington Free Beacon reported.

"Blumenthal's stock trades raise conflict of interest concerns, and to make matters worse, Blumenthal failed to disclose his trades as required by the very laws intended to reveal conflicts of interest," Kendra Arnold, the executive director of FACT, wrote in a letter to Sens. Chris Coons (D., Del.) and James Lankford (R., Okla.), respectively the chairman and vice chairman of the Senate Ethics panel.

The ethics complaint comes amid heightened scrutiny into the financial dealings of members of Congress. A bipartisan group of lawmakers has introduced bills to prohibit members of Congress and their spouses from owning individual stocks. Blumenthal came out in favor of one such measure in the wake of the Free Beacon‘s report.

Blumenthal and his wife purchased a stake in Robinhood on Feb. 1, 2021, the same day Blumenthal joined a chorus of lawmakers in calling for investigations into a stock speculation craze that involved shares of GameStop. Robinhood was blamed for helping create a speculative bubble in GameStop shares through its online stock trading platform.

While Blumenthal initially urged an investigation, he did not conduct one himself, even though he was in a prime position to do so as chairman of the Senate Commerce Subcommittee on Consumer Protection. The subcommittee provides oversight for the Federal Trade Commission, which received hundreds of complaints about Robinhood.

Blumenthal has denied any wrongdoing and has said he was unaware of the trades because they were made through a trust controlled by his wife's family. Blumenthal has not addressed the delay in filing a financial disclosure on Dec. 8 for the sale of between $265,000 and $550,000 worth of Robinhood shares. Blumenthal disclosed the sale 56 days later, on Feb. 2. The STOCK Act requires members of Congress to disclose large financial transactions within 30 days. They are allowed 45 days for spouses' financial transactions.

"There is the ability for the senator to use non-public information for his personal profit, for instance timing when to buy and sell stocks," said Arnold. "On the other side of this, the senator may take or refrain from taking official action to benefit his personal investments, which of course leads to questioning the credibility of the Senate."

"Senator Blumenthal's stock trades and any failure to comply with federal law must be investigated and appropriate sanctions imposed," Arnold insisted.

"Anyone can call for an investigation, but that doesn't change the facts," a Blumenthal spokeswoman told the Free Beacon. "Senator Blumenthal owns no individual stock—including Robinhood stock. He had nothing to do with these stock trades. Neither he nor his wife had any control over any Robinhood transaction. The senator voted for the STOCK Act and supports banning members of Congress from owning or trading individual stocks."

The Senate Ethics Committee did not respond to requests for comment.

Update March 1, 11:46 a.m.: This post has been update to include comment from Blumenthal's office.