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Congressional Insider Trading 2020 – Are Officials Misusing Public Office?

Congressional Insider Trading 2020 – Are Officials Misusing Public Office?

D.C. –  The Department of Justice (DOJ) launched a probe into the stock transactions of several senators without finding wrongdoing in the majority of those cases. Several senators sold their personal stock holdings after a congressional briefing on COVID-19’s economic impact. The probe into allegations against Republican Senator Richard Burr of North Carolina is ongoing.

The STOCK Act

Congress passed the STOCK Act in 2012. It prohibits members of Congress, government employees, congressional staffers, members of the executive branch, and the judiciary from engaging in insider trading with information obtained from their public office. At the time the act was passed, Senator Burr, the focus of an ongoing probe, voted against the act, calling it, “ludicrous.”

Senator Burr, Chairman of the Senate Intelligence Committee, allegedly sold 33 stocks that he and his wife held. These stocks were valued at between $628,033 and $1.72 million. The Burrs sold stocks that were in sectors impacted heavily by the pandemic. As the Chairman of the Intelligence Committee, he was warned of the sectors heavily impacted by the pandemic. 

After news of the allegations came out, notable celebrities including Fox News talk show host, Tucker Carlson, asked for Sen. Burr’s resignation and prosecution. At the time, Senator Burr gave no comment. 

Senator Kelly Loeffler 

Kelly Loeffler, a Republican junior senator from Georgia, also attended the same congressional briefing where Sen. Burr was also present. Acting on the same information, Sen. Loeffler also sold stocks valued at between $1.275 million to $3.1 million. Additionally, Sen. Loeffler purchased stocks in two companies directly benefiting from COVID-19. These include tech stocks from a teleconferencing software company. 

Senator Loeffler is a former executive at Intercontinental Exchange. She is also married to Jeffrey Sprecher, Chairman of the New York Stock Exchange.

In an exclusive to the Current Affairs Times, Sen. Loeffler’s spokesperson said, “These false allegations were a political attack and completely baseless. Since day one in public office, Senator Loeffler has been open, and fully transparent. As previously stated, the senator and her husband’s investment portfolios are handled by third-party, outside advisers, a standard they put into place before Kelly arrived in the Senate. Senator Loeffler and her husband made the decision in April to liquidate their holdings and move into exchange-traded funds (ETFs) and mutual funds. They did this to take this distraction off the table. Senator Loeffler fully cooperated with officials by providing documents and information to the Department of Justice, the SEC, and the Senate Ethics Committee, establishing that she and her husband acted entirely appropriately.”

Communications Director of the Georgia Senator’s Office, Louis-Charles Nadgey, exclusively provided Current Affairs Times with a copy of the letter sent by the Senate Ethics Committee to Senator Loeffler. According to this letter, after a preliminary inquiry based on a review of the transactions by Senator Loeffler and her husband, the committee did not find any evidence against her. This letter confirms the dismissal of the matter.

Senator Diane Feinstein

The California Democratic senator is a ranking member of the Senate Judiciary Committee. Sen. Feinstein sold stocks valued at between $1.5 million and $6 million owned jointly with her husband. The senator claimed that all of her assets are in a blind trust and she has no involvement in her husband’s financial decisions. There is no evidence supporting her statement. 

Investigation

Senator Burr told the Senate Ethics Committee that he only used public information to make financial decisions. Thereafter, the DOJ and SEC initiated a probe into his stock transactions. 

Christopher Carofine, the SEC chairman’s Director of Communications, directed Current Affairs Times to a press release confirming amendments to the whistleblower program. These amendments intend to provide transparency, clarity, and increase efficiency. This will mean that similar illegal stock trades or insider trading can be detected more efficiently.

The FBI also launched a criminal investigation and seized Sen. Burr’s phone in order to investigate his communications with stockbrokers and his personal iCloud account.

FBI spokeswoman, Lauren Hagee Glintz, told Current Affairs Times that per DOJ policy, the FBI cannot confirm nor deny the existence of investigations in addition to Senator Richard Burr’s insider trading scandal. In the interim, the senator stepped down as Chairman of the Senate Intelligence Committee.

Additionally, Montana’s Attorney General Tim Fox has accused Republican congressman, Greg Gianforte, of committing insider trading in a similar manner. The attorney general remained unavailable for comment. 

Amid elections, this investigation heaps more pressure on the Trump Administration. It is yet to be determined if this strategy caused over-leveraging of the stock market, leading to its collapse.

Do elected officials allow their wealth managers to independently make these investment decisions or do they use their public office to gain private benefits?

Image Credit: Louis Velazquez/Unsplash

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Afia is a lawyer, journalist, an avid traveler, an avid reader, a foodie, and an amateur singer. She enjoys instrumental music with her glass of wine ?

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