Richard Burr under investigation of insider trading by SEC

The Securities and Exchange Commission (SEC) is investigating whether Sen. Richard BurrRichard Mauze Burr Internal poll shows McCrory with double-digit lead in North Carolina Republican Senate primary Democratic incumbents bolster fundraising lead in key Senate elections McConnell receives wake-up call Republican Party MORE (RN.C.) violated federal insider trading laws by selling more than $ 1.6 million in stock before the market crashed last year.

On a judicial presentation Last week, the SEC revealed that it was investigating Burr’s decision to liquidate nearly all of his stock holdings on February 13, 2020 after receiving classified reports about the emerging coronavirus pandemic. The agency is also investigating whether Gerald Fauth, Burr’s brother-in-law, made similar stock sales based on information it received from Burr in a phone call the same day.

“Among other things, the Commission is investigating whether [Burr] sold shares on the basis of material non-public information, ”the agency revealed in a statement filed in the District Court for the Southern District of New York, where it is attempting to compel Fauth to comply with a subpoena.

The SEC said it “appears” that Burr obtained nonpublic information through his position as chairman of the Senate Intelligence Committee, his membership on the Senate Committee on Health, Education, Labor and Pensions (HELP) and his former employees involved in the response to the pandemic when it decided to sell almost all of its shares.

Burr allegedly called his stockbroker on the morning of February 13 and ordered him to sell more than $ 1.6 million in shares held in his and his wife’s joint individual retirement account (IRA), according to the SEC. Fauth called his sister, Burr’s wife, two hours later, and the senator briefly called Fauth shortly after, the SEC alleged.

Three minutes later, Fauth called his broker and told him to sell several shares from his wife’s IRA account, the SEC alleged.

Investors are prohibited by federal law from buying or selling securities based on non-public information that may affect the price of the asset once it is widely known. Trading based on non-public information or “insider trading” often allows an investor to avoid major losses or make significant gains.

The STOCK Act also prohibits members of Congress from using information obtained through their office to enrich themselves in the financial markets.

Burr’s decision to nearly liquidate his shares likely saved him and his wife hundreds of thousands of dollars in potential losses. The market began to collapse about two weeks after Burr’s sale when the coronavirus outbreak reached pandemic levels, but has since spiked well above its pre-pandemic heights.

The Justice Department also investigated Burr’s stock sales, but declined to press charges.

Burr, who will retire after his term ends in 2022, defended your stock sales in March 2020 after ProPublica first reported in disclosure. The senator told the Senate Ethics Committee that he based his decision on CNBC’s coverage of the initial impact of COVID-19 in Asia.

A Burr spokesman in the Senate did not respond to a request for comment Wednesday.

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