by WorldTribune Staff, March 31, 2020
The Department of Justice reportedly has opened an inquiry into four senators who sold off millions of dollars in stocks in the days before the coronavirus crisis crashed the market.
The FBI is carrying out the inquiry in conjunction with the Securities and Exchange Commission, reports say.
Four senators, Republicans Richard Burr of North Carolina, Kelly Loeffler of Georgia, James Inhofe of Oklahoma and Democrat Dianne Feinstein of California, reportedly dumped the stock prior to the market losing 30 percent of its value.
Related: Senators dumped stocks after intel briefing on coronavirus, March 20, 2020
According to a March 31 report by the Washington Examiner, Burr has retained high-powered attorney Alice Fisher, a partner at Latham & Watkins in Washington, D.C.
“The law is clear that any American — including a senator — may participate in the stock market based on public information, as Sen. Burr did,” Fisher told the Examiner.
“When this issue arose, Sen. 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,” Fisher added. “Sen. Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”
The four senators faced allegations of insider trading, spurred by reports that they based stock sales on the conronavirus congressional briefings they received. The claim is that the senators may have violated 2012’s STOCK Act, which prohibits members of Congress from using nonpublic information in the stock market.
ProPublica published a report about Burr’s stock dumps, noting the sales coincided with intelligence briefings about the COVID-19 virus. “Soon after he offered public assurances that the government was ready to battle the coronavirus,” Burr sold “between $628,000 and $1.72 million of his holdings on Feb. 13.,” the report said.
Loeffler became part of the controversy when the Daily Beast published a report tying a private all-senators Senate Health Committee coronavirus briefing on Jan. 24 to stock sales in her financial disclosures, noting that, between Jan. 24 and Feb. 14, “Loeffler reported selling stock jointly owned with her husband worth between $1,275,000 and $3,100,000.” The report also noted that, on Feb. 14, the Georgia senator’s disclosures show $100,000 to $250,000 in stock purchases for Citrix, a remote work company.
In response, Loeffler said she was the target of “a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement. I was informed of these purchases and sales on February 16, 2020 — three weeks after they were made.”
Feinstein’s financial disclosures show two stock sales on Jan. 31 of $500,001 to $1 million, then another sale of $1 million to $5 million in stock for Allogene Therapeutics, a cancer research biotech company.
Feinstein previously told the Washington Examiner, “During my Senate career, I’ve held all assets in a blind trust of which I have no control” and that “reports that I sold any assets are incorrect, as are reports that I was at a Jan. 24 briefing on coronavirus. I report my husband’s financial transactions. I have no input into his decisions.”
Inhofe’s financial disclosures showed sales of stock totaling $180,000 to $400,000 on Jan. 27, but he also sold between $150,000 to $350,000 in January before the briefing.
Inhofe tweeted the allegations of wrongdoing are “completely baseless and 100 percent false.”
“I was not at the briefing on Jan. 24,” Inhofe said. “I do not have any involvement in my investment decisions. In December 2018, shortly after becoming chairman of the Senate Armed Services Committee, I instructed my financial advisor to move me out of all stocks and into mutual funds to avoid any appearance of controversy.”
SEC Chairman Jay Clayton demurred when asked about the stock controversy by CNBC on Monday.
“We have a very rigid policy about not commenting on whether an investigation is happening or not happening or anything,” Clayton said. “But anyone who is privy to private information about a company or about markets needs to be cautious about how they use that private information. That’s sort of fundamental to our securities laws. And that applies to government employees, public officials, etc., and that STOCK Act codifies that.”