Report: DOJ Launches Probe of Senators Who Dumped Stocks Before Coronavirus Crash
The Justice Department is reportedly investigating stock transactions made by lawmakers prior to the steep market declines seen following the widespread outbreak of the coronavirus.
CNN reported Monday: “The inquiry, which is still in its early stages and being done in coordination with the Securities and Exchange Commission, has so far included outreach from the FBI to at least one lawmaker, Sen. Richard Burr, seeking information about the trades, according to one of the sources.”
The North Carolina Republican, who is chairman of the Senate Intelligence Committee, sold between $628,000 and $1.7 million in stocks on Feb. 13.
The liberal watchdog group Citizens for Responsibility and Ethics in Washington reported the sales came in 33 transactions on that day and included “some highly vulnerable to the economic impact of the coronavirus pandemic, including Wyndham Hotels and Resorts and Extended Stay America.”
The STOCK Act of 2012 (Stop Trading on Congressional Knowledge) makes it illegal for members of Congress and congressional staff to use information they gained through their positions for their own financial benefit.
Burr, along with other lawmakers, received briefings about the coronavirus prior to major declines in the stock market, which started the last week of February.
The senator has stated he made his decision to sell stocks based on information reported in the media about the coronavirus.
Alice Fisher, a lawyer for Burr, said in a statement Sunday to CNN that Burr “welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”
“The law is clear that any American — including a Senator — may participate in the stock market based on public information, as Senator Burr did,” Fisher said.
“When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry.”
No other lawmakers were identified in the CNN report as having been contacted by the Justice Department and it wasn’t clear which others were being looked at, according to CNN.
However, CNN also reported, “GOP Sen. Kelly Loeffler of Georgia and her husband sold 27 stocks valued between $1.275 million and $3.1 million from January 24 through February 14, according to Senate records.”
Further, they “purchased three stocks at a value of $450,000-$1 million, including shares in Citrix, a software company that’s gained approximately 15% in value since Loeffler and her husband bought the stock last month,” according to CNN.
Citrix is a teleconferencing company, providing a service that has become much more in demand following the coronavirus outbreak.
Loeffler — a former financial analyst who was appointed to the Senate in December — has stated she had no knowledge of the transactions before they were made, explaining that a third-party investment manager makes those decisions.
The senator told Fox News earlier this month that she is only informed of sales and purchases “several weeks” after they occur.
The video is below, Loeffler’s answers about the stock transactions start about the 1:50 mark.
“I am the only chartered financial analyst in the Senate, and completely understand these rules and have adhered to the letter and the spirit of these ethics rules,” Loeffler said.
A Loeffler representative told CNN the senator has not been contacted by the FBI to date regarding an investigation of her stock sales and purchases.
Democrat Sen. Dianne Feinstein of California, who like Burr serves on the Intelligence Committee, did not sell any stocks herself, according to Senate records, but her husband sold between $1.5 million and $6 million in stock of Allogene Therapeutics, a biotech company, in January and February.
Feinstein stated earlier this month that she is not involved in her husband’s financial decisions.
“I have no input into his decisions,” she said in a statement, according to CNN. “My husband in January and February sold shares of a cancer therapy company. This company is unrelated to any work on the coronavirus and the sale was unrelated to the situation.”
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