Yesterday, the Securities and Exchange Commission issued “a sharp warning” against trading on non-public information related to the coronavirus just days after Senator Burr was caught dumping stock after receiving private briefings before a market freefall.
The warning told those with access – for example, the Chairman of the Senate Intelligence Committee – to “comply with the prohibitions on illegal securities trading,” and noted that, “trading in a company’s securities on the basis of inside information may violate the antifraud provisions of the federal securities laws.”
The sharp warning from the SEC comes as new reporting reveals that U.S. intelligence agencies “were issuing ominous, classified warnings in January and February about the global danger posed by the coronavirus,” warnings that Burr was “privy to” and which “coincided” with his sell off. According to a Washington Post report from over the weekend:
“The surge in warnings coincided with a move by Sen. Richard Burr (R-N.C.) to sell dozens of stocks worth between $628,033 and $1.72 million. As chairman of the Senate Intelligence Committee, Burr was privy to virtually all of the highly classified reporting on the coronavirus. Burr issued a statement Friday defending his sell-off, saying he sold based entirely on publicly available information, and he called for the Senate Ethics Committee to investigate.”
Burr has claimed that he “relied solely on public news reports” — but that doesn’t pass the smell test, especially after the Post’s report.
Burr has yet to answer several, very serious questions:
- As Chairman of the Intelligence Committee, what private, classified briefings did he recieve about the threat of the coronavirus and when?
- What proof can he provide that those briefings did not influence his decision to sell “a fortune” a week before the market crashed?
- Why were all of the transactions during this period sales, unlike his past “typical” disclosure reports which were “a mix of sales and purchases”?
- Why was his “February 13 selling spree” the “largest stock selling day of at least the past 14 months,” especially after publicly reassuring people that the U.S. “is better prepared than ever before” less than a week before dumping stock?
Senator Burr doesn’t have good answers for these questions because good answers don’t exist. The truth is he used his office and position to profit from the pandemic, and he must immediately step down.
CNBC: SEC warns on coronavirus insider trading after stock sales by Sen. Loeffler and NYSE chief husband raise eyebrows
By Dan Mangan
March 23, 2020
- The Securities and Exchange Commission on Monday issued a sharp warning against trading on non-public information related to the coronavirus — a caution that came days after news of recent stock sales by the CEO of the New York Stock Exchange and his senator wife sparked widespread criticism and calls for investigations.
- Those trades, involving sales of up to $3 million worth of securities, came in the weeks before stock market indices dramatically fell in value due to the coronavirus pandemic, and on the heels of a private, all-senators briefing on the virus outbreak from Trump administration officials that Loeffler attended on Jan. 24.
- The SEC directors in their statement noted that, “The 2019 coronavirus disease (COVID-19) has impacted the securities markets in unprecedented ways.”
- “In these dynamic circumstances, corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances,” the directors, Stephanie Avakian and Steven Pelkin said.
- “This may particularly be the case if earnings reports or required SEC disclosure filings are delayed due to COVID-19,” the directors said.
- The statement said that “given these unique circumstances, a greater number of people may have access to material nonpublic information than in less challenging times.”
- “Those with such access – including, for example, 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 directors wrote.
- “Trading in a company’s securities on the basis of inside information may violate the antifraud provisions of the federal securities laws.”
- Good government groups have filed complaints with various entities asking for investigations into Loeffler’s trading, as well as into stock sales by several other senators on the heels of the coronavirus briefing: Richard Burr, R-N.C., Diane Feinstein, D-Calif., and James Inhofe, R-Okla.
- The group Common Cause said Friday it had filed complaints with the SEC, Justice Department and Senate Ethics Committee “calling for immediate investigations” of Loeffler, Burr, Feinstein and Inhofe “for possible violations of the STOCK Act and insider trading laws.”
- Another group, Citizens for Responsibility and Ethics in Washington, filed a complaint with the Senate Ethics Committee asking for probes of Loeffler and Burr for possible violations of the STOCK Act.
- On Feb. 13, one week before U.S. stocks began sliding, Burr sold more than $500,000 worth of shares in a single day.
- The sales amounted to 33 individual transactions, and if they totaled the high end of the range that Burr reported, around $1.7 million, that would equal nearly all of his net worth.
Washington Post: U.S. intelligence reports from January and February warned about a likely pandemic
By Shane Harris, Greg Miller, Josh Dawsey and Ellen Nakashima
March 20, 2020
- U.S. intelligence agencies were issuing ominous, classified warnings in January and February about the global danger posed by the coronavirus while President Trump and lawmakers played down the threat and failed to take action that might have slowed the spread of the pathogen, according to U.S. officials familiar with spy agency reporting.
- Taken together, the reports and warnings painted an early picture of a virus that showed the characteristics of a globe-encircling pandemic that could require governments to take swift actions to contain it. But despite that constant flow of reporting, Trump continued publicly and privately to play down the threat the virus posed to Americans. Lawmakers, too, did not grapple with the virus in earnest until this month, as officials scrambled to keep citizens in their homes and hospitals braced for a surge in patients suffering from covid-19, the disease caused by the coronavirus.
- Intelligence agencies “have been warning on this since January,” said a U.S. official who had access to intelligence reporting that was disseminated to members of Congress and their staffs as well as to officials in the Trump administration, and who, along with others, spoke on the condition of anonymity to describe sensitive information.
- “Donald Trump may not have been expecting this, but a lot of other people in the government were — they just couldn’t get him to do anything about it,” this official said. “The system was blinking red.”
- The warnings from U.S. intelligence agencies increased in volume toward the end of January and into early February, said officials familiar with the reports. By then, a majority of the intelligence reporting included in daily briefing papers and digests from the Office of the Director of National Intelligence and the CIA was about covid-19, said officials who have read the reports.
- The surge in warnings coincided with a move by Sen. Richard Burr (R-N.C.) to sell dozens of stocks worth between $628,033 and $1.72 million. As chairman of the Senate Intelligence Committee, Burr was privy to virtually all of the highly classified reporting on the coronavirus.
- Inside the White House, Trump’s advisers struggled to get him to take the virus seriously, according to multiple officials with knowledge of meetings among those advisers and with the president.