Burr steps down as Senate Intelligence chair amid stock sell-off investigation
Reports showed multiple senators allegedly sold millions of dollars worth of stock just before news of the COVID-19 pandemic broke.
Senator Richard Burr, R-N.C., resigned from his chair of the Intelligence Committee after the Federal Bureau of Investigation seized his phone in investigation into stocks he sold at the onset of the coronavirus outbreak.
Sens. Jim Risch of Idaho, Marco Rubio of Florida and Susan Collins of Maine are next in line to take over his chair, despite leading their own committees.
Burr allegedly advised private donors of the severe potential impact of the COVID-19 pandemic then let go of up to $1.7 million worth of stock holdings, spurring a Justice Department inquisition and calls for his resignation.
Most of Burr’s stock dump included shares in Wyndham Hotels and Resorts and hotel-chain Extended Stay America. It’s estimated that he sold up to $250,000 worth of shares between the two corporations.
Burr isn’t the only one. He’s among a cohort of politicians who — as a result of the massive trades conducted — profited off of a crisis that is expected to leave between 100,000 and 240,000 Americans dead. Records indicate that Sens. Dianne Feinstein, D-Calif., Kelly Loeffler, R-Ga., and James Inhofe, R-Okla., also sold off significant holdings.
Feinstein said the F.B.I. knocked on her door and that she complied with questioning. She and her husband, investment banker Richard Blum, were reported to have sold between $1.5 million and $6 million worth of shares in a biotechnology firm before the market crashed. Feinstein used Twitter to deny liability on March 20, claiming that her assets were held in a blind trust over which she had no control.
On May 14, Loeffler said she supplied information to the D.O.J. in February. She and her husband, New York Stock Exchange Chairman Jeffrey Sprecher, are reported to have sold millions of dollars worth of stock in companies, including Exxon Mobil, AutoZone and Ross Stores, beginning on January 24. Loeffler tweeted about attending the Senate coronavirus briefing the same day.
Loeffler released a statement on March 13 claiming she had no knowledge of the trading. She later said that she and her husband would divest from all individual stocks.
Inhofe also claimed ignorance of the movement of his holdings and the briefing, which he said he did not attend. Inhofe — who has not indicated that the D.O.J. is investigating him — sold up to $400,000 worth of holdings in PayPal, Apple and real-estate company Brookfield Asset Management.
These senators are being accused of insider trading — or, at the very least, stock dumping. Share prices reflect the cumulative public belief of what companies are worth, so sensitive information and breaking news are major drivers of the value of shares. Insider trading happens when certain people have access to information that hasn’t been made public yet that may cause them to sell stock before share value drops.
Insider trading is considered illegal by the Securities Exchange Commission. But it’s tricky: Burr contested the notion that the briefing he gave on February 27 was exclusive in a thread of tweets posted on March 19.
Insider trading wasn’t outlawed for senators until 2012 under the Stop Trading on Congressional Knowledge (S.T.O.C.K.) Act. At that, the regulations were loosened in 2013. Burr was one of many who opposed its passing.
If Burr was sharing that information out, it may not be considered insider trading, even if he was still engaged in stock dumping.
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