2020 congressional insider trading scandal
This article needs to be updated.(January 2021)
The 2020 congressional insider trading scandal was a political scandal in the United States involving members of the United States Senate due to multiple Senators allegedly violating the STOCK Act by selling stock at the start of COVID-19 pandemic in the United States and just before the coronavirus correction on February 20, 2020, using knowledge given to them at a closed Senate meeting. The Department of Justice initiated a probe into the stock transactions on March 30, 2020, but ended the probe on May 26, 2020, for all senators except Richard Burr, who has since[when?] been served multiple search warrants.
Background[edit source | edit]
On January 26, 2012, Senator Joe Lieberman introduced the STOCK Act that would prohibit the use of non-public information for private profit, including insider trading by members of Congress and other government employees. The bill was passed by the Senate with only Senators Richard Burr, Jeff Bingaman, and Tom Coburn voting against it. The House of Representatives voted to approve of the bill and it was signed into law by President Barack Obama on April 4, 2012.
Timeline[edit source | edit]
On January 24, 2020, the Senate Committees on Health and Foreign Relations held a closed meeting with only Senators present to brief them about the COVID-19 outbreak and how it would affect the United States. Following the meeting Senator Kelly Loeffler and her husband Jeffrey Sprecher, the chairman of the New York Stock Exchange, made twenty-seven transactions to sell stock worth between $1,275,000 and $3,100,000 and two transactions to buy stock in Citrix Systems which saw an increase following the correction. Senator David Perdue made a series of 112 transactions with stocks sold for around $825,000 and bought stocks worth $1.8 million. Perdue started buying around $185,000 in stock in DuPont, a company that makes personal protective equipment, on the same day as the Senate briefing up to March 2. Additionally, John Hoeven of North Dakota purchased $250,000 in health science companies in January, five days after attending a briefing about the pandemic.
On February 7, Senator Burr, the Chair of the Senate Intelligence Committee, stated in an open-editorial on how the government could respond to coronavirus that "Luckily, we have a framework in place that has put us in a better position than any other country to respond to a public health threat, like the coronavirus," However, on February 13, he and his wife sold between $628,000 and $1.7 million worth of stock through thirty-three transactions and on February 27, Burr stated that "There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," at a Capitol Hill Club luncheon and his statement was later leaked in a secret recording.
On March 19, ProPublica published an article showing that Burr had sold stock shortly before the correction and Loeffler, Jim Inhofe, and Dianne Feinstein's stock selling was also reported. NPR asked Caitlin Carroll, Burr's spokesperson, for a comment on the alleged violations and she responded with "lol" and then clarified that "As the situation continues to evolve daily, he has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy."
Tucker Carlson called for Burr to resign from the Senate and be prosecuted for insider trading on a segment of Tucker Carlson Tonight. Representative Alexandria Ocasio-Cortez also called for Burr to resign and Representative Joaquin Castro called for an investigation into the stock selling. Representative Doug Collins, who ran against Loeffler in the special Senate election in Georgia, criticized her by stating "People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain? I'm sickened just thinking about it."
On April 10, Montana Attorney General Tim Fox accused Representative Greg Gianforte, the wealthiest member of the House of Representatives, of insider trading by investing into the manufacturer of hydroxychloroquine. At the time Fox was running against Gianforte for the Republican nomination in the 2020 Montana gubernatorial election.
Investigation[edit source | edit]
On March 20, Burr requested for the Senate Ethics Committee to investigate his stock trading history and stated that he only used publicly available information to make his decisions. On March 30, the Department of Justice initiated a probe into the stock transactions with the Securities and Exchange Commission.
During the investigation it was discovered that Burr had also sold around $47,000 worth of stock in OCI, a Dutch fertilizer company, before it suffered a forty-two percent decrease in its value in 2018. From September 5 to 8, 2018, Burr and his wife sold all of their stock in OCI, which at the time was experiencing its highest share price; a month later it failed to meet quarterly earnings expectations after the Trump administration granted exemptions to eight countries for sanctions placed on Iranian oil and petrochemicals.
On May 13, the FBI seized Burr's phone, to investigate his communications with his stock broker, among other warrants, including one to search his personal iCloud account. On May 14, Burr told Senate Majority Leader Mitch McConnell that he would temporarily step down as chairman of the Senate Intelligence Committee for the remainder of the investigation.
References[edit source | edit]
- Wong, Scott (February 2, 2012). "STOCK Act passes Senate by vote of 96-3". Politico. Archived from the original on March 25, 2014.
- "Sen. Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing". The Daily Beast. March 20, 2020. Archived from the original on March 20, 2020.
- "Senate Health Committee Announces Briefing to Update Senators on Coronavirus". January 23, 2020. Archived from the original on February 26, 2020.
- "David Perdue's stock trading saw an uptick as coronavirus took hold". April 7, 2020. Archived from the original on April 7, 2020.
- "Sen. David Perdue bought stock in a company that produces protective medical equipment the same day senators received a classified briefing on the coronavirus". April 7, 2020. Archived from the original on April 7, 2020.
- "Intelligence Chairman Raised Virus Alarms Weeks Ago, Secret Recording Shows". NPR. March 19, 2020. Archived from the original on March 20, 2020.
- "Senate Intel chair unloaded stocks in mid-February before coronavirus rocked markets". OpenSecrets. March 19, 2020. Archived from the original on March 19, 2020.
- "Tucker Carlson calls on Burr to resign amid reports of stock selloff". The Hill. March 19, 2020. Archived from the original on March 20, 2020.
- "Burr, other senators under fire for stock sell-offs amid coronavirus outbreak". NBC. March 19, 2020. Archived from the original on March 21, 2020.
- "How Richard Burr and Kelly Loeffler became political villains in the coronavirus saga". CNN. March 20, 2020. Archived from the original on March 21, 2020.
- "Richest GOP congressman accused of 'insider trading' on coronavirus — by a Republican AG". April 10, 2020. Archived from the original on April 11, 2020.
- "Burr requests ethics investigation into stock sale, denies wrongdoing". The Hill. March 20, 2020. Archived from the original on March 21, 2020.
- "Exclusive: Justice Department reviews stock trades by lawmakers after coronavirus briefings". The Hill. March 30, 2020. Archived from the original on March 31, 2020.
- "Senate Intel Chair Sold Dutch Fertilizer Stock in 2018, Right Before a Collapse". April 7, 2020. Archived from the original on April 7, 2020.
- "FBI serves warrant on senator in investigation of stock sales linked to coronavirus". May 13, 2020. Archived from the original on May 14, 2020.
- "Richard Burr to step down as Intelligence Committee chairman". May 14, 2020. Archived from the original on May 14, 2020.
- "Justice Dept. Ends Inquiries Into 3 Senators' Stock Trades". May 26, 2020.
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