Howard Swint said yesterday that during the height of the financial crisis in 2008, Congresswoman Shelley Moore Capito (R-West Virginia) traded Citigroup stock based on non public inside information.
Swint is running against Capito in the Second Congressional District of West Virginia.
Swint says that on November 18, 2008, Congresswoman Capito and her husband Charles Capito sold between $100,000 and $250,000 worth of Citigroup stock and avoided massive losses.
Swint says that day, Citigroup stock traded for $83.60.
The very next day the stock dropped to $64.
“But what makes this transaction even more suspicious is the fact that on the very same day they sold, November 18th, 2008, they also purchased Citigroup stock call options,” Swint said. “This meant they were placing their bets on what they believed was market-moving information they could profit on in the future in the very same stock, they just had to dump it first to avoid the massive losses the very next day.”
“If they would be kind enough to share with the public the strike price and expiration date of that Citigroup call option contract we could know for sure.”
“Until then what we do know for sure is that Congresswoman Capito and her husband managed to profit during the depths of the financial crisis through a $50,000 capital gain from Citigroup stock trades while American investors and pension funds were realizing the massive losses.”
“It’s important to note that all the while Congresswoman Capito had access to non-public information in Citigroup through the House Financial Services Committee that is charged with the regulatory oversight of the too-big-to-fail Wall Street bank.”
“Congresswoman Capito and the Committee so thoroughly failed in their first stewardship responsibility that Citigroup required not one or two but required three massive government bailouts that took the nation’s economy to the brink of collapse.”
“To me the most egregious fact is that all the while Congresswoman Capito continued to receive massive campaign contributions from the same executives they were supposed to be regulating and today none of them have been brought to justice for their crimes.”
“This could have all been avoided if the obvious conflict of interest associated with her husband’s employment as a Citigroup executive had been acted upon by the House Ethics Committee.”
“Capito’s Zoology degree made her the least qualified person in all of Congress to sit on the Committee and her husband is obviously not a blind trust.”
“If the CFO of Citigroup had made those trades on the same day she would probably have been prosecuted and sent to Alderson federal prison,” Swint said.