Profiting From The Pandemic? Malinowski Faces Accusations

SOMERVILLE, NJ — District 7 Congressman Tom Malinowski is speaking out after the Associated Press released a scathing article accusing him of using inside information to profit during the coronavirus pandemic.

The article published on Friday says that Malinowski has purchased or sold as much as $1 million of stock in medical and tech companies that had a stake in the virus response — such as companies that were developing COVID-19 testing, or therapeutics to combat illnesses caused by the disease, according to the Associated Press.

Additionally, the article accuses Malinowski of not properly disclosing as much as $3.2 million in trades as required by Stock Act, a 2012 law intended to curtail congressional stock trading.

"The charge that Congressman Malinowski abused his office is categorically false," according to a statement released by Malinowski's Office on Friday.

"The AP story acknowledges, 'there is no indication that Malinowski acted on insider information to make his investment decisions.' These trades were made solely by his broker based on publicly available information and without Congressman Malinowski's input of prior knowledge; a fact confirmed by Gagnon Securities in a statement to AP."

Malinowski's Office also released a statement from Gagnon Securities, which claims it serves as an investment adviser that has full discretion over Malinowski's accounts.

"Gagnon Securities make all trading decisions in discretionary client accounts, and does so based on publicly available information as well as proprietary analysis that forms our investment strategy for all our clients. All trades referenced by AP that were made in Congressman Malinowski's account in 2020, including all short positions, were made by Gagnon Securities pursuant to its discretionary authority and without Congressman Malinowski’s input or prior knowledge," according to the statement released by Malinowski's Office.

Malinowski, a Democrat, is currently serving his second term as congressman for District 7 which includes all of Hunterdon County and parts of Somerset, Essex, Morris, Union and Warren counties.

Malinowski was first elected in 2018 when he won the election over Republican incumbent Leonard Lance. He was re-elected in 2020 very narrowly over Senator Tom Kean Jr. Read More: Kean Concedes 7th Congressional District Race Against Malinowski

See below to read Malinowski's and Gagnon's full statements:

"The charge that Congressman Malinowski abused his office is categorically false.

The AP story acknowledges, “there is no indication that Malinowski acted on insider information to make his investment decisions.” These trades were made solely by his broker based on publicly available information and without Congressman Malinowski’s input of prior knowledge; a fact confirmed by Gagnon Securities in a statement to AP, attached below.

For two years Congressman Malinowski has been a leading voice in demanding transparency from our elected officials and has spent his career as a leader in the global fight against corruption.

The true question at hand in AP’s reporting is, should Members of Congress and other elected officials be held to a higher standard? Congressman Malinowski believes the answer should be yes to ensure trust between the public and their elected representatives.

Congressman Malinowski is committed to full transparency with the public. He believes that all Members of Congress should be required to maintain blind trusts if they have any investments in the stock market. In the absence of any such requirement, and going above the law, Congressman Malinowski is currently in the final phases of establishing a blind trust for himself."

Gagnon Securities Statement:

"Gagnon Securities LLC is an SEC registered investment adviser that has full discretion over its advisory client accounts, including the account maintained by Congressman Malinowski. Gagnon Securities make all trading decisions in discretionary client accounts, and does so based on publicly available information as well as proprietary analysis that forms our investment strategy for all our clients. All trades referenced by AP that were made in Congressman Malinowski’s account in 2020, including all short positions, were made by Gagnon Securities pursuant to its discretionary authority and without Congressman Malinowski’s input or prior knowledge."

Have a news tip? Email alexis.tarrazi@patch.com.

Get Patch breaking news alerts sent right to your phone with our new app. Download here. Don't miss local and statewide announcements. Sign up for Patch alerts and daily newsletters.