Senator Loeffler's COVID-Related Stock Trades Looking Even Worse, While Feds Start Investigating Senator Burr's

from the insider-trading dept

As we noted just a few weeks ago, two Senators — Kelly Loeffler from Georgia and Richard Burr from North Carolina, both of whom were publicly trying to play down the risks associated with COVID-19 — were quietly engaging in stock trades that suggested they had a different viewpoint (while five different Senators sold stock during this period, only Loeffler’s and Burr’s look particularly suspicious). Burr’s stock sell-off was revealed first, and got the most attention, in part because he’s also the Chair of the Senate Intelligence Committee and was getting classified briefings about COVID-19. The latest news on that front is that the Justice Department has supposedly opened an investigation:

Senate Intelligence Committee Chairman Richard Burr sold off a large amount of stocks before the coronavirus market crash, and now the Justice Department is looking into his statements around this time period, NPR can report.

Others have reported that the FBI has been in contact with Burr. That doesn’t mean much for now, and the investigation may turn up nothing. But it’s worth noting that it’s happening.

The other Senator, Kelly Loeffler, has some more bad news, as new reports suggest even more stock trading that at least looks suspicious. As was noted in the original report, Loeffler had sold off a bunch of retail stock, and bought into a company that does videoconferencing. The original reports suggest that she sold off somewhere between $1.3 million and $3.1 million in stock right before the US economy went south. Turns out it was way more. The new report shows that she also sold off nearly $19 million in stock of Intercontinental Exchange, the company that owns the New York Stock Exchange. It is worth noting that Loeffler’s husband is the chair and CEO of Intercontinental Exchange, and the sales took place between February 26th and March 11th. That means at least some of those sales were happening while she was insisting that the US had everything under control.

Perhaps even more damning, though? Beyond buying into a videoconferencing software company, Loeffler and her husband, Jeff Sprecher, also purchased a bunch of stock in DuPont, a major supplier of the personal protective gear that hospitals are all now desperate for:

Sprecher bought $206,774 in chemical giant DuPont de Nemours in four transactions in late February and early March. DuPont has performed poorly on Wall Street lately, but the company is a major supplier of desperately needed personal protective gear as the global pandemic strains hospital and first responders.

So, to recap: they sold somewhere in the range of $20 million worth of mostly stock market and retail companies — and bought into videoconferencing and protective health gear. All while telling the public that the government she’s a part of has everything under control.

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Comments on “Senator Loeffler's COVID-Related Stock Trades Looking Even Worse, While Feds Start Investigating Senator Burr's”

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22 Comments
Philosopherott (profile) says:

10B-5-1

If he is the CEO, unless this is a part of a 10b5-1 plan, IDK how this is not insider trading given the MNPI he has access to. If this is apart of a 10b5-1 plan then he chose to sell this stock far in advance, likely at a vesting period,which often happens in Q1 for most people on C street.

These plans are meant to keep insiders from dumping the stocks they are insiders of since many get stock as compensation. The issue is they can cancel the sales at the last moment. So in truth they can sell $19MM every week and cancel if the prices are not what they are looking for.

Not the expert on these plans so feel free to correct or edify me.

https://corpgov.law.harvard.edu/2016/03/24/a-guide-to-rule-10b5-1-plans/

Anonymous Coward says:

Re: 10B-5-1

If he is the CEO, unless this is a part of a 10b5-1 plan, IDK how this is not insider trading given the MNPI he has access to.

They could claim the information was immaterial because anyone could see what was happening in the non-US markets. I don’t believe it’s necessary for people to believe them, if it establishes reasonable doubt. Any of these companies could’ve made significant profit off Asia alone.

Lawrence D’Oliveiro says:

Re: Re: whether they're guilty ahead of time

There is “guilty” as in having to face criminal penalties, and there is “less-than-squeaky-clean” behaviour in a position of public trust. Those in power should absolutely have that power stripped from them if they fail the second test, even if a criminal investigation does not find them guilty beyond reasonable doubt.

This comment has been deemed insightful by the community.
Mike Masnick (profile) says:

Re: Re:

I hope they prosecute all 5 of them if they are found guilty. Democrats, Republicans, all of them. Both sides are dirty as hell. Let them both fry.

That’s… uh… backwards. You don’t find out if someone is guilty until after you prosecute them.

Anyway, as I made clear, the evidence to date, only shows two out of the five Senators who sold off stocks participated in trades that, on first appearance, look sketchy. It remains to be seen how sketchy… and whether or not they violated any laws.

This comment has been deemed insightful by the community.
That One Guy (profile) says:

Re: Re:

And entering a store during business hours is usually seen as perfectly fine, but not so much when it’s after the store is closed and the employees have gone home. Context matters.

Insider trading is considered a ‘bad thing’ for a reason, and compounding that by having those engaging in it government employees, supposedly there to represent the public and instead lying to the public makes it just a wee bit worse.

Anonymous Coward says:

I think they need to make an example out of these people, like they did to Leona Helmsley and Martha Stewart. These people did not cover their tracks sufficiently and need to pay for it. We simply can not have the outright and blatant disregard as demonstrated by these folk as it could cost them some votes, the horror!
/s

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