March 30, 2020/Press

DOJ, SEC Launch “Probe” of Burr’s Stock Dumping Scandal as Pressure Continues to Build for Him to Resign

Yesterday, CNN reported that the FBI has reached out to Senator Richard Burr about his stock market sell-off, part of a new “probe” from the Justice Department in coordination with the Securities and Exchange Commission into his pandemic profiteering. In a sign of the severity of the probe, Burr hired a former “high-level DOJ official” under George W. Bush to represent him.

The new probe comes as the SEC offers yet another warning about trading with private information – its second in a week. “Anyone who is privy to private information about a company or about markets needs to be cautious about how they use that private information,” SEC Chairman Jay Clayton told CNN, just a few days after the SEC issued a “sharp warning” that “trading in a company’s securities on the basis of inside information may violate the antifraud provisions of the federal securities laws.”

Meanwhile, pressure continues to build in-state for Senator Burr to resign. A column for the Greensboro News & Record, near Burr’s hometown of Winston-Salem, wrote that, “When the going gets tough Burr often seems to high-tail it for the nearest window.” The News & Observer editorial board noted that Burr “has not provided adequate answers” about his pandemic profiteering, and wrote that, “At the moment we needed him most, Richard Burr was thinking mostly about himself. One week later, that hasn’t changed.”

As the new DOJ/SEC probe shows, Senator Burr’s problems aren’t going away. “So why isn’t he?

CNN: Exclusive: Justice Department reviews stock trades by lawmakers after coronavirus briefings
By David Shortell, Evan Perez, Jeremy Herb and Kara Scannell
March 30, 2020

Key Points:

  • The Justice Department has started to probe a series of stock transactions made by lawmakers ahead of the sharp market downturn stemming from the spread of coronavirus, according to two people familiar with the matter.
  • The inquiry, which is still in its early stages and being done in coordination with the Securities and Exchange Commission, has so far included outreach from the FBI to at least one lawmaker, Sen. Richard Burr, seeking information about the trades, according to one of the sources.
  • Public scrutiny of the lawmakers’ market activity has centered on whether members of Congress sought to profit from the information they obtained in non-public briefings about the virus epidemic.
  • Burr, the North Carolina Republican who heads the Senate Intelligence Committee, has previously said that he relied only on public news reports as he decided to sell between $628,000 and $1.7 million in stocks on February 13. Earlier this month, he asked the Senate Ethics Committee to review the trades given “the assumption many could make in hindsight,” he said at the time.
  • But the sales have come under fire after senators received closed-door briefings about the virus over the past several weeks — before the market began trending downward.
  • Congress passed the Stock Act in 2012, which made it illegal for lawmakers to use inside information for financial benefit.
  • In an interview with CNBC on Monday morning, SEC Chairman Jay Clayton would not confirm the inquiry, but sent a warning about trading with private information.
  • “Anyone who is privy to private information about a company or about markets needs to be cautious about how they use that private information. That’s fundamental to our securities laws and that applies to government employees, public officials, etc, and the Stock Act codifies that,” Clayton said.
  • Burr’s sales represent a sizable share of his portfolio of stocks, according to his latest Senate financial disclosure documents filed in May 2019, although exact numbers aren’t possible because lawmakers only report trades as a range of dollar values.

News & Observer: Richard Burr’s troubles are not going away. So why isn’t he?
By the Editorial Board
March 26, 2020

Key Points:

  • More than a week has passed since news reports revealed how U.S. Sen Richard Burr profited off the coronavirus while failing to warn his constituents at the early, critical stages of the crisis. Things are hardly getting rosier for North Carolina’s senior senator.
  • Burr has been abandoned by fellow Republicans, some of whom have called for his resignation. He’s been sued by a shareholder of Wyndham Hotels & Suites for selling off $150,000 of that company’s stock. The Securities and Exchange Commission has issued a statement that, while not using Burr’s name, warned members of Congress about doing what the senator is accused of doing — trading off privileged information and briefings. And, on Monday, the Washington Post reported that the Justice Department is investigating those stock trades.
  • He is toxic to his party. He is embarrassing to North Carolina. Clearly, his problems are not going to go away.
  • So why isn’t he?
  • The senator has not provided adequate answers to those questions, and he has said he “relied solely on public news reports to guide my decision regarding the sale of stocks on February 13.” Reports, however, say that Burr and other members of the Senate Intelligence Committee and House Intelligence Committee were receiving “ominous, classified warnings” about the virus as early as late January.
  • But frankly, North Carolinians don’t need an agency or committee of Burr’s peers to tell us what he did was wrong. In a crisis that will define his state and country for years, the senator failed in his most fundamental duty, to serve and protect the people who elected him.
  • Now, everything he does will be colored by that failure. Republicans know Burr is an albatross, an example opponents will use throughout this election season to argue that too many in the GOP, especially the president, have seen COVID-19 through the lens of personal gains and losses. North Carolinians know that he will be a source of shame to our state, that until he honors his long-ago pledge to retire in 2022, he will be the N.C. senator who tried to steal a lifeboat all for himself.
  • As the coronavirus crisis worsens here and across the country, so will the weight of what Richard Burr did and didn’t do. It’s difficult to see him as a visible or viable representative of our interests. His effectiveness as a leader has been profoundly hobbled.
  • And yet, Burr seems to have no intention of doing everyone a favor and resigning. Sadly, that’s not a surprise. At the moment we needed him most, Richard Burr was thinking mostly about himself. One week later, that hasn’t changed.

Greensboro News & Record: Allen Johnson: When going gets tough, count on Sen. Burr to ‘Run away!’
By Allen Johnson
March 29, 2020

Key Points:

  • Richard Burr once climbed out of a window to evade a gaggle of reporters.
  • Burr, a Republican, may be wanting to slip away again these days to somewhere — anywhere else. He was outed several days ago in a pair of separate stories by NPR and Pro-Publica for:
  • 1. Making dire (and so far accurate) predictions in a private meeting with donors about the ravages of the coronavirus while sounding substantially more optimistic in public.
  • 2. Dumping as much as $1.7 million in stock before the markets fell as COVID-19 cases rose.
  • In retrospect, none of this should have come as a surprise. When the going gets tough Burr often seems to high-tail it for the nearest window.
  • There was the time in 2008 when, after reports that Citigroup was taking over what was then called Wachovia Bank, a panicked Burr told his wife to run to an ATM and withdraw as much cash as she could. Publicly, however, Burr had told constituents not to worry.
  • What you think you see — and hear — is a paragon of honor and seriousness and fair play. But what you get is the infamous call to arms by King Arthur in “Monty Python and the Holy Grail”: “Run away! Run away!”
  • Burr ran away from accountability when he was one of only three senators who voted against a 2012 bill that banned insider trading by members of Congress, calling the bill “insane” and “ludicrous.”
  • And here’s the thing: Burr may yet slip away from being held to account.
  • In today’s breaking-headline-a-minute news cycle, he could get lost in the shuffle (you know, like President Trump’s promised tax returns).
  • And in the end, Burr, who is not seeking reelection, might be allowed to “Run away! Run away!” into his retirement without ever being pressed to own up to his chronic spinelessness. Somebody, quick, close the windows.