Howard Swint says Congresswoman Shelley Moore Capito is going to lose on November 6. The reason – insider trading.
Swint says that when voters hear about her insider trading in Congress, “she will be viewed very negatively and will lose the race.”
Swint has a biased view of the situation, of course.
He’s the Democratic nominee running against Capito, who sits on the House Financial Services Committee.
“When I first announced my candidacy, it was widely reported that the reason I got into the race was my outrage over what I believed to be insider trading,” Swint told Corporate Crime Reporter in an interview last week. “The hard part was having to prove it. And I believe that I have now proved it. You are getting the first bite of the apple. And I expect it will be widely reported here in West Virginia soon.”
Swint says that Capito and her husband traded on inside information during the financial crisis in 2008.
“I believe that they traded on inside information,” Swint said “And I base that on a particular trade made on November 18, 2008, when they dumped between $100,000 and $250,000 of Citigroup stock.”
“The next day, the stock lost 23 percent of its value. This was in November 2008 during the financial crisis.”
“On the same day that they sold that Citigroup stock, they bought call options, which allowed them to buy the very same Citigroup stock back at a future date.”
“And I’m calling on the Capitos to release the strike price and the expiration date, because I believe that will demonstrate beyond a shadow of a doubt that they had foreknowledge of market conditions going forward.”
Do you know if they made or lost money on the call options and the sale of the stock?
“On November 18, the very day they dumped the Citigroup stock, it went from $83.60 a share down to $64.00 a share the next, which was a loss of 23 percent of its value,” Swint said.
“The Citigroup stock lost 76 percent of its value in 2008. Yet, they were able to make over $50,000 in capital gains in the sale and transactions of Citigroup in that very year.”
Swint also alleges that Capito’s chief of staff Joel Brubaker engaged in similar trading.
“That allegation is based upon a Wall Street Journal article that reported that he made money trading in financial services firms in 2009,” Swint said.
“Brubaker said he invested in Citigroup on February 27, 2009 – the day Citi and the Treasury announced the bank would issue common stock in exchange for preferred shares. That move helped bolster investor confidence.”
“He bought 1,000 shares on that date. And then he turned around and flipped it on September 18 and made – according to the Wall Street Journal – a 107 percent profit during that seven month hold.”
“We also went back and looked at his purchases in other financial industry stocks and found that he bought and sold Freddie Mac. We believe that was a profit of twelve percent.”
Swint says that if a member of Congress is going to sit on the House Financial Services Committee – which is the Committee charged with the nation’s mortgage lenders and banking institutions – they should put their assets in a blind trust.
“Rather than do that, like Senator Jay Rockefeller has, Shelley Moore Capito and her husband, Charles, who at the time worked for Citigroup, instead have brokered in financial institution stocks for many years, including during the financial crisis,” Swint said.
“It was such a blatant conflict of interest that many reporting outlets, from the Associated Press to Fox News, documented the conflict of interest. Also, Peter Schweizer wrote a book about trading on non public information on Capitol Hill – it’s called Throw Them All Out.”
Swint says that if the CFO of Citigroup had made the trades that Capito made, “she would be in prison today.”