Feinstein–Allogene Controversy: What the Insider-Trading Inquiry Reveals

This case involves a sequence of biotech stock transactions by Richard Blum, the husband of Senator Feinstein, executed in late January and mid-February 2020; these trades came just before COVID-19 was recognized as a major public health crisis and before the stock market correction that followed. [2][3] The stock involved, Allogene Therapeutics, had shares trading between approximately $21.72 and $24.25 during those trades, which for some critics are characterized as being near the company’s 2020 low—but macro-data indicate its 2020 low was later in the year and significantly lower, making the claim of a near-bottom timing contestable. [1search3][3]

Feinstein’s defense hinges on her assertion that her husband made the investment decisions independently and that she holds no control over the decisions by virtue of a blind trust—practices consistent with Senate rules and precedent. [5][4] DOJ scrutiny was extended to her, but ultimately Feinstein was cleared of wrongdoing, as the investigation into her and various other senators ended without charges. [2]

From a strategic perspective, while these trades appear legal and were disclosed, their timing amid emerging public awareness of COVID-19 makes them vulnerable to criticism. Public trust is highly sensitive to appearances of insider advantage, especially in fast-moving sectors like biotech where policy, regulation, and public health intersect. Firms, lawmakers, and their families involved in such transactions may benefit from prescriptive policies or enhanced disclosure to manage perceptions and reduce moral hazard.

Open questions remain around whether Feinstein or her husband had nonpublic information about the severity or imminence of COVID-19’s market impact at those times, whether the timing of the sales was opportunistically calibrated, and how the framing of “near the low” may be used rhetorically vs. factually based on price history.