Feinstein, Allogene & the Ethics of Political Trades During the 2020 Pandemic

This case centers on disclosures that in early 2020, Senator Dianne Feinstein’s husband, Richard Blum, sold substantial holdings—between $1.5 million and $6 million—in biotech firm Allogene Therapeutics. The transactions occurred on January 31 and February 18 when the stock was trading at approximately $21.72 and $24.25 per share, respectively. These prices are near the yearly low of $18.22, underscoring that the sales were not at market peaks. [5], [6], [12]

Senator Feinstein has consistently maintained that all her assets are under a blind trust, over which she has no direct control or involvement in investment decisions. She denies attending a pivotal Senate coronavirus briefing on January 24 and states that neither she nor the company (Allogene) had any connection to coronavirus-related work., [6], [2]

Political risk stemmed from public concerns over whether these sales were connected to nonpublic information, particularly in light of other senators being briefed on COVID-19 risks around the same period. The Department of Justice ultimately closed its investigation into the Feinstein/Blum trades (and similar trades by Loeffler, Inhofe) with no charges brought. [1], [6], [12]

Strategically for investors and policymakers, this incident highlights the tension between ethics and perception in trades by public officials or their immediate family members. Even when legally insulated via blind trusts, timing can drive reputational damage, electoral risk, and regulatory scrutiny. Since the stock later rose from those low points, observers argue that Blum may have locked in values too low, weakening narratives of profiting from foreknowledge—but that may also reduce legal exposure. Meanwhile, Allogene Therapeutics experienced steep decline over subsequent years, meaning those who held on fared poorly. [5], [1], [1search1]

Open questions include what constituted “low point” in Allogene’s trading window, how often blind trusts fully insulate official accountability, and whether disclosure timelines (Senate rules) are sufficient to ward off ethical or political backlash. There is also the issue of whether similar trades since then have been subject to more rigorous regulatory or legislative reforms.