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Saturday, Apr 27, 2024

US senators dumped stock before coronavirus crash, prompting accusations of insider trading

Richard Burr and Kelly Loeffler sold as much as US$1.7 million and US$3.1 million in shares respectively before markets collapsed amid pandemic fears. Loeffler, one of the wealthiest US lawmakers, is married to chairman of New York Stock Exchange

An independent watchdog demanded an investigation on Friday after two Republican senators aware of the looming coronavirus disaster dumped their stocks even as the White House played down the threat.

Senator Richard Burr, the powerful chair of the Senate Intelligence Committee, and Congress newcomer Kelly Loeffler both faced criticism over their investment sell-offs, weeks before US stock markets collapsed.

Burr, who receives almost daily briefings from the US intelligence community on threats to the country, sold as much as US$1.7 million worth of shares on February 13.

Loeffler’s investments manager sold as much as US$3.1 million in shares between late January and February 14, official documents show. Loeffler, one of the wealthiest US lawmakers, is a member of the Senate Health Committee. Her husband is chairman of the New York Stock Exchange.

Critics accuse both of acting on inside information about the Covid-19 virus threat.

They also noted that, while Burr wrote for Fox News in early February that the American public had little to fear, he told a private gathering of donors weeks later that the coronavirus could resemble the 1918 Spanish Flu, which killed tens of millions.

Both senators denied any impropriety as some calls came for their resignations.

“Burr knew how bad it would be. He told the truth to his wealthy donors, while assuring the public that we were fine. THEN he sold off $1.6 million in stock before the fall. He needs to resign,” Democratic Congresswoman Alexandria Ocasio-Cortez said on Twitter.

On Friday, independent Congressional watchdog Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint to the Senate Ethics Committee.

“The job of a US Senator is to serve the American people,” said CREW director Noah Bookbinder. “It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty.”



The reports of insider stock trading added fuel to accusations that Trump and the US leadership knew of the serious threat but kept the public in the dark, delaying action that could have curbed the spread of infections.

As the Senate Intelligence Committee chairman, Burr receives much of the same daily reports on threats to the country as the White House.

He wrote on the Fox News website on February 7 that the government was “better prepared than ever” for the Covid-19 virus. But on February 13 he and his wife sold holdings in major companies, including leading hotel and travel groups.

At the time the US had only about a dozen cases and Trump was saying the country would not be significantly affected.

On February 27, one day after Trump declared that the number of US cases would decline, the North Carolina senator told wealthy donors that coronavirus was a threat like the 1918 Spanish Flu, National Public Radio reported Thursday.

“It is much more aggressive in its transmission than anything that we have seen in recent history,” Burr told the group. “It is probably more akin to the 1918 pandemic,” he said, warning them not to travel.

Burr defended his actions, saying NPR had “knowingly and irresponsibly misrepresented” his speech to donors.


In a statement on Friday he said he himself had asked the Senate Ethics Committee to review the matter “with full transparency”.

“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13,” he said.

Loeffler, who received a government briefing on the coronavirus threat on January 24, called the criticisms “a ridiculous and baseless attack”.

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