Following allegations that U.S. Sen. Richard Burr (R-N.C.) and other senators sold large amounts of stock after confidential briefings on COVID-19, Common Cause, a nonprofit government watchdog group, has filed complaints with the U.S. Department of Justice, the Securities and Exchange Commission and the Senate Ethics Committee.
These complaints aim to prompt investigations into possible violations of insider trading laws and the Stop Trading on Congressional Knowledge (STOCK) Act.
"There are laws that were passed in 2012 that basically prevent members from making sales of stock or selling stock based on inside information that they have received,” said Bob Phillips, executive director of Common Cause North Carolina. “It is kind of an insider trading provision that was passed, again, in 2012."
The STOCK Act prohibits members of Congress and other government officials from trading stock based on nonpublic information they learn on Capitol Hill. Penalties for violating insider trading laws can include fines reaching $5 million and up to 20 years in prison.
Common Cause is filing complaints with the DOJ, SEC and Senate Ethics Committee on the basis that Burr, along with four other senators, Dianne Feinstein (D-Calif.), Kelly Loeffler (R-Ga.) and James Inhofe (R-Okla.), sold large amounts of stocks following confidential briefings on COVID-19 that foreshadowed the stock market crash that began on Feb. 19.
These complaints, according to Common Cause, are based on information in news stories published by major media outlets, namely The New York Times and ProPublica, that detailed the sales. However, since the publication of the articles, every senator except Burr has denied any violations of insider trading laws.
“And so we think that there is enough information out there for that to be investigated,” Phillips said.
In tweets posted on March 20, Feinstein said she could not have violated any laws, as she has no control over her investments and was unable to attend the COVID-19 briefing.
“During my Senate career I’ve held all assets in a blind trust of which I have no control,” she said in the tweet. “Reports that I sold any assets are incorrect, as are reports that I was at a Jan. 24 briefing on coronavirus, which I was unable to attend.”
Loeffler also denied any allegations of insider trading in a March 20 Fox News interview and a Fox Business interview on March 23.
“I'm not involved in my portfolio. My husband is not involved,” she said in the March 23 interview. “Our portfolio is managed by third parties. The actions are blind to me until they put it in front of me at the end of the reporting period.”
Inhofe also echoed the statements of the other senators in a press release, saying he was not at the briefing and does not control his portfolio.
“The New York Times allegations are completely baseless and 100 percent false. I was not at the briefing on Jan. 24. I was meeting with pro-life kids from Oklahoma here for the March for Life and the new nominee to be U.S. Ambassador to Tanzania," he said. "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.”
Burr is the only senator who has not yet commented on the allegations, and his press team did not respond to several requests for comment.
Despite some senators’ denials of any violation of insider trading laws or the STOCK Act, Phillips said the investigations requested by Common Cause are still necessary. Phillips said while there are ways the senators could prove they did not violate any laws, an investigation is necessary to confirm everything.
“I don’t think that just because someone says ‘Hey, I didn’t know anything about it’ or ‘I wasn’t a part of these meetings’ necessarily absolves them from having an investigation to completely make 100 percent sure that there has been no violation of the law," he said.
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