Search

Sen. Richard Burr, brother-in-law spoke on phone just before stock sales that are under investigation, SEC says - CNBC

Senator Richard Burr, a Republican from North Carolina and ranking member of the Senate Health, Education, Labor, and Pensions Committee, speaks during a confirmation hearing in Washington, D.C., on Thursday, April 29, 2021.
Al Drago | Bloomberg | Getty Images

Sen. Richard Burr of North Carolina and his brother-in-law, who is chairman of an independent federal agency, spoke on the phone shortly before both men sold off stocks weeks ahead of national Covid lockdowns in 2020, the Securities and Exchange Commission said in a civil court filing.

The filing comes as the SEC continues to investigate whether Burr, a Republican, and his brother-in-law Gerald Fauth sold the stocks on the basis of material nonpublic information that Burr obtained as part of his job.

Members of Congress are barred from trading on nonpublic information they receive as a result of their positions as lawmakers.

As chairman of the Senate Intelligence Committee, Burr was given access in January and February 2020 to classified intelligence reports that contained stark warnings about the coronavirus pandemic.

The SEC's probe is focused on the timing of trades in February 2020, after Burr and other lawmakers were briefed on the danger of the pandemic spreading to the United States.

Fauth is chairman of the National Mediation Board, an agency that facilitates labor-management relations in the U.S. railroad and airline industries. He also is "the brother of Senator Burr's wife, Brooke Burr," the SEC filing notes.

A week after the February stock sales by Burr and his brother-in-law, stock markets began plunging over fear that the pandemic would cripple the global economy. The Dow Jones Industrial Average lost 30% of its value in the weeks following Burr's trades.

Burr in March 2020 said, "I relied solely on public news reports to guide my decision regarding the sale of stocks." He added: "Specifically, I closely followed CNBC's daily health and science reporting out of its Asia bureaus at the time."

The FBI seized Burr's phone in May 2020 as part of a criminal probe of the trades. That move led Burr to step aside as intelligence committee chairman. On Jan. 19, the day before Joe Biden was inaugurated as president, Burr announced that the Justice Department had informed him that it closed its investigation without filing criminal charges against him.

The SEC, in a new filing in its civil case, said that Burr, at 8:45 a.m. on Feb. 13, 2020, called his stockbroker to sell more than $1.65 million worth of stock, "all but one of the equities in his and his wife's joint individual retirement account ... portfolio."

At 11:32 a.m. that day, Burr called Fauth's cellphone, according to the filing in U.S. District Court in Manhattan. "The call lasted 50 seconds."

Gerald Fauth
Source: Wikipedia

At 11:33 a.m., a minute or less later, Fauth called his primary stockbroker's landline, the SEC said.

After failing to reach his first broker, Fauth called a second broker within two minutes and "directed her to sell several stocks in his wife's account," the filing reveals.

Fauth "sold between $97,000 and $280,000 worth of shares in six companies — including several that were hit particularly hard in the market swoon and economic downturn," according to ProPublica, which first reported the court filing.

Minutes after that, following Burr's own instructions from earlier that morning, the senator's broker "entered trades to sell equities in the IRA accounts of both Senator Burr and his wife," according to the filing.

The SEC's filing seeks a judge's order that would force Fauth to comply with an investigative subpoena that was issued in March 2020. The subpoena seeks documents, other evidence and Fauth's testimony.

Fauth and his lawyers have stonewalled that subpoena, the filing indicates.

The SEC said in its filing that, "Among other things, the Commission is investigating whether Senator Richard Burr ... sold stocks on the basis of material nonpublic information on February 13, 2020, in violation of the federal securities laws, including the STOCK Act, a statute passed by the U.S. Congress in 2012 to prohibit its members from using nonpublic information derived from their positions for their personal benefit."

"The Commission is also investigating whether [Fauth] and his wife, Mary Fauth, sold securities on the same day on the basis of material nonpublic information supplied to them by Senator Burr in violation of his duties."

A spokesman for Burr and a lawyer for Fauth did not immediately respond to requests for comment.

Adblock test (Why?)

Article From & Read More ( Sen. Richard Burr, brother-in-law spoke on phone just before stock sales that are under investigation, SEC says - CNBC )
https://ift.tt/3CBH81e
Business

Bagikan Berita Ini

0 Response to "Sen. Richard Burr, brother-in-law spoke on phone just before stock sales that are under investigation, SEC says - CNBC"

Post a Comment

Powered by Blogger.