- Sen. Dianne Feinstein’s husband, Richard Blum, sold $500,001–$1 million of Allogene Therapeutics (ALLO) on Jan. 31, 2020, near about $21.28, just above the year’s early intraday low.
- Although the sale was near that low at the time, the stock later spiked above $50 and later fell further, with 2020 lows around $17.
- The Justice Department closed its May 2020 inquiry into Feinstein and other senators without charges, and Feinstein said she did not direct the trade and that it was disclosed under Senate rules.
- The episode illustrates how lawful, properly reported trades by lawmakers’ families can still raise perceived ethical and reputational risks during crises.
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The transaction by Richard Blum selling Allogene shares on Jan 31, 2020, occurred at a time when the company’s stock had already been under pressure, trading just above the 2020 intraday low of ~$21.25–21.28. The sale amount falls into the $500,001–$1,000,000 range, which triggers public disclosure obligations under Senate rules, though it does not alone imply wrongdoing.
Price data for Allogene in 2020 show that while the Jan 31 sale was near the early-year lows, significantly lower prices appeared later in the year (e.g. ~$17.43). Thus, the characterization of the stock trading “near its 2020 intraday lows” is technically accurate for that moment but potentially misleading in a broader temporal context. The stock later ran up materially after early-2020 before experiencing deeper declines later in the year.
Legally, Feinstein was cleared. The DOJ closed its investigation into her, Loeffler, and Inhofe in May 2020 without charges. Key to Feinstein’s defense was that all trades were made by her husband, in a blind trust, with no involvement or foreknowledge on her part. Feinstein did not attend the Jan 24, 2020 Intelligence Committee briefing on the coronavirus disease, a key event in the broader congressional trading scrutiny.
Strategically, the episode underscores several risks for public officials: even when trades are lawful, timing relative to public health crises or policy events can provoke substantial reputational risk; disclosure rules—while functional—may not capture perceptions of leverage or information asymmetry; and volatile sectors like biotech are especially sensitive to both regulatory and scientific catalysts, which can rapidly re-rate a company.
Remaining open questions include:
- Did Blum foresee or have advance knowledge of developments (public or private) about COVID-19, regulatory policy, or market sentiment that could have influenced Allogene’s outlook?
- Was the blind trust structure sufficiently insulated to prevent indirect inputs by Feinstein or others?
- How might market perception shift if future scandals reveal similar patterns involving stocks that are particularly vulnerable to policy/pandemic risk?
Supporting Notes
- On Jan 31, 2020, Blum sold between $500,001 and $1 million of Allogene stock, when shares traded near $21.28—just above the 2020 intraday low (~$21.25) recorded on Feb 1.
- Feinstein stated she had no involvement in her husband’s financial or business decisions apart from required disclosures.
- Allogene shares closed much higher later in 2020—with year-end close ~$25.24, but intra-year lows reached ~$17.43; thus, sales did not occur at absolute lows.
- Price peaked mid-2020 above $50, demonstrating large volatility after early 2020.
- The DOJ ended its investigation into Feinstein, Loeffler, and Inhofe in late May 2020 without bringing charges.
- Feinstein did not attend the Jan 24, 2020 all-Senate briefing on the coronavirus threat—central to many congressional trading controversies.