On the same day that President Donald Trump’s top economic adviser, Gary Cohn, publicly promoted the administration’s plans to overhaul financial regulations, part of Cohn’s stake in Goldman Sachs Group Inc. was sold, according to federal financial-disclosure documents.
The bank’s share price rose that day by 4.5 percent on news of the planned regulatory review, as other financial-industry stocks also advanced. It’s not clear whether Cohn, the former president of Goldman Sachs who joined Trump’s White House in January, was personally aware of the Feb. 3 stock sale, which was worth as much as $5 million. Such transactions are frequently handled by independent managers.
The precise time of day at which the sale was executed also isn’t clear, though news of the regulatory review broke before markets opened that morning.
The White House press office didn’t respond to questions about how Cohn’s stock sales were handled, but spokeswoman Lindsay Walters provided an emailed statement that said in part: “The White House requires all of its employees to work closely with ethics counsel to ensure compliance and has aggressively required employees to resign or recuse or divest where the law requires.”
Federal ethics rules don’t specify how appointees should divest assets that might present conflicts of interest. The federal Office of Government Ethics approves an individual ethics agreement with each appointee, and those agreements sometimes spell out parameters.
For example, some appointees’ agreements specify that a third party, “someone with discretion,” will make the sales without the appointees’ involvement, said Stan Brand, an attorney and ethics expert at Akin Gump Strauss Hauer & Feld LLP.
The terms of Cohn’s ethics agreement aren’t public. The documents are publicly available for most high-ranking federal officials, but not for White House appointees.
As long as Cohn followed the terms of his agreement, “I don’t know that there’s a legal problem,” said Larry Noble, general counsel of the Campaign Legal Center, a group that advocates for stricter regulations on money and politics. Brand agreed. “The thing is, as long as he was executing the agreement he made with the Office of Government Ethics, the timing just becomes a factor of the practicality and logistics,” he said.
The shares Cohn sold on Feb. 3 represented only a small portion of his holdings in Goldman Sachs; he’d previously disclosed a stake of as much as $216 million. The latest disclosures, released Friday by OGE, show that he sold much, if not all, of that stake on various dates after joining the administration.
The disclosure documents provide asset values only in ranges; on Feb. 3, they show, Cohn sold between $1 million and $5 million worth of Goldman Sachs stock.
Before markets opened that day, the Wall Street Journal published an exclusive interview with Cohn under the headline, “Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule.” By 11:15 a.m., Goldman shares had risen 4.3 percent to $240.37.
Later that morning, Cohn gave several interviews promoting a planned review of financial regulatory standards adopted during former President Barack Obama’s administration and known generally as the Dodd-Frank law.
“From the executive office, the number-one priority we have is job growth,” Cohn said on Bloomberg Television. “We have been told we need deregulation to grow jobs in this country. We are not anti-regulation. We want smart regulation that allows our financial services to be the envy of the world.”
The bank’s shares closed at $240.95 on Feb. 3, 4.5 percent higher than the previous close. In general, news of the administration’s deregulation plans helped send financial stocks higher that day. The 63-company Standard & Poor’s 500 Financials Index had advanced 2 percent at 5 p.m. in New York.
Cohn’s financial-disclosure forms list only the dates of sales, not the precise time of day. Consequently, it’s unclear whether his Feb. 3 sale took place at or near the peak for Goldman Sachs’s share price.
The documents show that Cohn sold as much as $284.9 million worth of stock in various companies, including Goldman Sachs, on various dates between Jan. 25 and March 30. He sold Goldman Sachs shares in 15 transactions for a total value between $47 million and $235 million, according to the disclosures.
Cohn, 56, stepped down as Goldman’s president and chief operating officer in December after agreeing to lead Trump’s National Economic Council, an influential panel that helps coordinate and develop the president’s economic program. He was long seen as the heir apparent to the bank’s Chief Executive Officer Lloyd Blankfein.
In addition to financial regulations, Cohn has also been a key player in the administration’s efforts to offer a comprehensive rewrite of the nation’s tax laws. He told Bloomberg Television last week that tax reform “is probably my number-one agenda item.”
Separately, another top official in that debate — Treasury Secretary Steven Mnuchin — also disclosed sales of stock to comply with his ethics agreement. Mnuchin, a former Goldman Sachs partner, sold at least $28.9 million in shares of eight companies that include CIT Group, Verizon Communications, and Berkshire Hathaway, according to a document released Saturday by the Office of Government Ethics.
The total value of the transactions can’t be determined since most were reported as ranges and three involving CIT Group held through a trust were cited as having been “over” $1 million. In a separate January disclosure statement, Mnuchin said he owned more than $50 million in shares in CIT Group. At the time, the Bloomberg Billionaires Index estimated Mnuchin’s net worth at $620 million.