WASHINGTON, D.C. – Federal investigators are looking into the stock trades of four United States Senators to ascertain whether they broke the law when they sold stocks just before the market crash last month.
Law Enforcement Today is learning from sources that an investigation has begun and financial disclosure statements of Sens. Richard Burr, R-N.C.; Jim Inhofe, R-Okla.; Kelly Loeffler, R-Ga.; and Dianne Feinstein, D-Calif., are being looked at.
All four senators, according to these disclosure statements, either themselves or through spouses or advisers sold large holdings of stock just around the same time that Washington lawmakers had received briefings about the severity of the coronavirus.
Things like this is why a lot of people do not trust the government. We recently saw the economic “stimulus” which was intended to help Americans who are out of work, as well as assist businesses who have been impacted by the coronavirus pandemic.
We then saw items put in there that help pet projects of legislators, such as the Kennedy Center for the Performing Arts, PBS, pay raises for Congress…you know, the things that will help everyday Americans.
Then we have the four United States senators who sold stocks just before the market crash triggered by the pandemic outbreak. Now, federal authorities are investigating, and rightfully so. The federal inquiry was first reported by CNN.
While the senators have denied any wrongdoing, the transactions merit scrutiny. Burr has asked the Senate Ethics Committee to look into his transactions, which involved up to $1.6 million.
However former federal prosecutors and legal analysts have said that the Securities and Exchange Commission, along with federal prosecutors should take a look at the transactions, according to USA Today.
As first reported by ProPublica, Burr and his wife sold between $598,000 and $1.62 million in stocks in February, as reported in financial disclosure statements. Lawmakers are not required to disclose specific transaction values, and are only required to report ranges for transactions when they exceed $1,000.
Disclosure statements show Loeffler and her husband, who happens to be the chairman of the New York Stock Exchange, Jeffrey Sprecher, sold between $1 million and $2.49 million in February, as reported by the Daily Beast.
Inhofe sold between $50,000 and $100,000 in stock on Feb. 20, while Feinstein’s disclosure shows sales of between $1 million and $5 million in stocks.
USA Today notes that the 2012 Stock Act specifically prevents members of Congress from trading stocks based on non-public information that they obtain in the course of their duties, or more specifically information they “gleaned on Capitol Hill,” according to the White House signing statement.
At the time the act was signed, the White House noted it was “a good first step…to help fight the destructive influence of money in politics and rebuild the trust between Washington and the American people.”
The law came about after “60 Minutes,” in an expose, revealed that members of Congress were not prohibited from using non-public information to make financial transactions.
Ironically Burr was one of three senators that voted against the bill.
The Charlotte Observer reported that Republican Rep. Matt Gaetz of Florida has been stepping up his criticism of Burr, having been critical of him since the transactions were first reported.
“Social distancing is not a sufficient penalty for Richard Burr,” Gaetz tweeted. “He needs to be removed as the intelligence chairman.”
Social distancing is not a sufficient penalty for Richard Burr. He needs to be removed as the intelligence chairman.
— Rep. Matt Gaetz (@RepMattGaetz) March 31, 2020
He followed that tweet up a few hours later with:
“Maybe in the next relief bill, Americans can choose: $1,200 or Stock tips from @SenatorBurr and @SenFeinstein.”
Maybe in the next relief bill, Americans can choose:
— Rep. Matt Gaetz (@RepMattGaetz) March 31, 2020
He also tweeted:
How can @senatemajldr justify leaving someone as the Chairman of the Intelligence Committee…..
who is being investigated by the FBI for criminally abusing their position for personal, financial gain?!?!#wheresmitch
Republicans need to do a better job cleaning our own house https://t.co/NMU8agPYtg
— Matt Gaetz (@mattgaetz) March 30, 2020
“How can @senatemajldr justify leaving someone as the Chairman of the Intelligence Committee…who is being investigated by the FBI for criminally abusing their position for personal, financial gain?!?” tagging Senate Majority Leader Mitch McConnell (R-Ky.), “Republicans need to do a better job cleaning our own house.”
Feinstein has also denied wrongdoing, and noted that the biotech company stocks were sold by her husband. A spokesman said that the couple’s assets are entirely separate.
Burr said he made the decision to sell the stocks on publicly available media reports, not on closed intelligence briefings.
Burr referred questions from the Charlotte Observer to a statement that was issued by Alice Fisher, former U.S. assistant attorney general, who is advising him:
“The law is clear that any American—including a Senator—may participate in the stock market based on public information, as Senator Burr did,” she said.
“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.
Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”
Burr has been widely criticized even among conservatives, with Fox New host Tucker Carlson calling on him to resign, calling his trades a “moral crime.”
In addition, Thom Tillis (R-N.C.), said that Burr owed his constituents in North Carolina “an explanation.”
Both Loeffler and Inhofe said their financial transactions were taken care of by third-party advisers.
Last week, the SEC issued a statement in which they warned against using insider information, while highlighting “the importance of maintaining market integrity.”
“Those with such access—directors, officers, employees, and consultants and other outside professionals—should be mindful of their obligations to keep this information confidential and to comply with the prohibitions on illegal securities trading,” the SEC Enforcement Division said.
“Trading in a company’s securities on the basis of inside information may violate the anti-fraud provisions of the federal securities laws.”
The statement did not reference the senators’ trades.
Trying to prove that the senators in fact used their offices in order to gain personal benefit is a difficult hill to climb. David Weinstein, a former federal prosecutor in Miami, noted that criminal investigators would need to prove that the senators used the information that they obtained as government officials for their personal benefit.
“It not only would be unethical, it is abhorrent to me that a government official might use information, especially at this time, to profit personally,” Weinstein said.
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