Coronovirus Insider trading allegations against Senators

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Sen. Richard Burr, R-N.C., is facing calls to resign after reports Thursday that the powerful Intelligence Committee chairman had privately warned well-connected donors of the dire impacts of the coronavirus pandemic last month while selling off up to $1.6 million of his own stocks.

ProPublica reported that Burr — who co-wrote an op-ed for Fox News in early February saying "the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus" — unloaded the stock around mid-February, about a week before the market started to plunge because of coronavirus concerns.

That included selling off up to $150,000 worth of shares of Wyndham Hotels and Resorts, which has lost two-thirds of its value, ProPublica reported. He also dumped to $100,000 of shares of another hotel chain, Extended Stay America.

ProPublica discovered, and NBC News has confirmed, the stock sell-offs in Burr's publicly available financial disclosure reports. The exact figures are unclear because the reports offer ranges of transactions.

The Senate Intelligence Committee received a number of briefings and intelligence reports in January and February that included non-public information about the growing coronavirus pandemic, Senate aides have told NBC News. The intelligence remains classified — it's unclear what warnings were given and exactly when.

The stock market has declined about 30 percent since Burr dumped the shares.

A spokesperson for Burr said the sales were "personal transactions made several weeks before the U.S. and financial markets showed signs of volatility due to the growing coronavirus outbreak."

"As the situation continues to evolve daily, he has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy," the spokesperson said.

Disclosure records also show that three other senators sold major holdings around the same time, including Sens. Dianne Feinstein, D-Calif., Kelly Loeffler, R-Ga., and James Inhofe, R-Okla., according to The New York Times.

In two tweets Thursday night, Loeffler, whose husband is the chairman of the New York Stock Exchange, defended the stock sales and said the investment decisions

Earlier Thursday, NPR reported that Burr had delivered a stark warning on the likely fallout of the virus at a luncheon with donors and well-connected constituents on Feb. 27.

"There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," Burr said, according to a recording of the remarks obtained by NPR. "It is probably more akin to the 1918 pandemic."

He also warned: "Every company should be cognizant of the fact that you may have to alter your travel. You may have to look at your employees and judge whether the trip they're making to Europe is essential or whether it can be done on videoconference. Why risk it?"

Burr's office confirmed his attendance at the event and the authenticity of the recording to NBC News, but it disputed the characterization of the event.

Two more senators made hefty stock sales before the coronavirus pandemic tanked global markets, records revealed as two other lawmakers who dumped millions in shares faced mounting calls to resign.

Sens. Dianne Feinstein and Jim Inhofe sold as much as $6.4 million worth of stock in the weeks before panic about the coronavirus sparked a worldwide selloff, according to disclosure filings first reported by the New York Times.

The additional revelations came amid widespread outrage toward GOP Sens. Richard Burr and Kelly Loeffler, who reportedly sold shares after getting briefings on the coronavirus threat.

Feinstein, a California Democrat, sold $500,001 to $1 million worth of stock in a company called Allogene Therapeutics on Jan. 31, less than a month before panic about the virus caused markets to plunge, Senate records show. Her husband sold $1,000,001 to $5 million worth of Allogene shares on Feb. 18, according to financial disclosures.

And Inhofe, an Oklahoma Republican, dumped as much as $400,000 worth of stock on Jan. 27, records show. He sold shares in five different companies including Apple, PayPal and Brookfield Asset Management, according to a disclosure report.

Feinstein spokesman Tom Mentzer said her husband made the transactions, not the senator herself.

“All of Senator Feinstein’s assets are in a blind trust, as they have been since she came to the Senate,” Mentzer said in an email. “She has no involvement in any of her husband’s financial decisions.”

Inhofe said he is not involved in his investment decisions. The senator asked his financial adviser in December 2018 to move his portfolio entirely out of stocks and into mutual funds in December 2018 “to avoid any appearance of controversy,” he said.

“My adviser has been doing so faithfully since that time and I am not aware of or consulted about any transactions,” Inhofe said in a statement.

The revelations came as figures across the political spectrum said Burr and Loeffler should resign for using sensitive information to cash in before fears about the virus tanked global stock markets.

“It is stomach-churning that the first thoughts these Senators had to a dire & classified #COVID briefing was how to profit off this crisis,” Rep. Alexandria Ocasio-Cortez (D-NY) said on Twitter Thursday night.

“I don’t care if you’re Republican or Democrat,” tweeted Charlie Kirk, a prominent conservative activist and chair of Students for Trump. “If you trade with inside info to enrich yourself during a crisis you are a disgrace. Resign, apologize, and donate all earnings to families of victims of China Virus.”

Burr, of North Carolina, was receiving daily briefings on the spreading coronavirus around the time he dumped as much as $1.7 million of his stock holdings on Feb. 13, about a week before the coronavirus panic sent markets tumbling, according to ProPublica.

Burr also drew criticism Thursday after NPR reported that he gave stark warnings about the virus’ potential impact to an exclusive North Carolina group while making more muted statements to the public.

Loeffler, a freshman Georgia senator, sold as much as $3.1 million worth of stock from Jan. 24 — the day she attended a private coronavirus briefing — through Feb. 14, the Daily Beast reported Thursday. Loeffler — whose husband is chairman and CEO of the New York Stock Exchange — also reportedly bought shares in the tech firm Oracle and Citrix, which provides teleworking software.

Some Democratic officials said Burr and Loeffler should be investigated and potentially disciplined — or even face criminal charges — for the suspiciously timed transactions.

“Senator Burr should resign and prepare to spend some quality time with a federal grand jury,” tweeted Rep. Jared Huffman (D-Calif.).

“Senators Burr and Loeffler should be investigated by authorities and the Senate Ethics Committee,” former Housing and Urban Development Secretary Julián Castro said on Twitter. “If the evidence suggests they engaged in insider trading, they should be charged and stand trial.”

Some observers have noted that Burr was one of just three senators to vote against the 2012 STOCK Act, which bans members of Congress from profiting from non-public information they learn on the job. Former Manhattan US Attorney Preet Bharara said congressional lawmakers “should not own individual stocks, period.”

“If you find out about a nation-threatening pandemic and your first move is to adjust your stock portfolio you should probably not be in a job that serves the public interest,” former Democratic presidential candidate Andrew Yang said on Twitter.

Representatives for Burr and Loeffler did not immediately respond to requests for comment Friday morning. But the senators have defended their stock trades amid the onslaught of criticism.

Loeffler said she leaves decisions about her investment portfolio to third-party advisers. “This is a ridiculous & baseless attack,” she tweeted early Friday, adding that she was informed of the trades on Feb. 16, after they were made.

Well this thread pushed me to check my stocks and investments online. I swore I wouldn't.

Someone please pass the tequila.

How do I not panic? We just all wait it out, right?

I have been selling out my crap stocks and reinvesting in better ones, at the same time, which have gone down a similar amount.
That way, not only do you have tax credits, the cost is just the brokerage fee in doing so.
It is similar to buying and selling a house in the same market.

The worst thing you can do is sell at the bottom of the market, realise the loss, and then see the stocks rise in value when you don't have any, as did happen to some during the GFC, or was that the KFC?
I get them mixed up, but I know only one of them is finger-licking good.

I have also reduced *some* of my stocks, as insurance.
No one really knows how far the market will go down.

Having said that, please don't take what I have said to heart.
I am *NOT* an expert in the stock market.
If you have an adviser, talk to *them*.

I do have a financial advisor, but I'm still freaking out. I don't want to sell anything.

I may need a bucket of popcorn chicken just to be safe.

I forgot to mention, we are in different countries, so tax credits, etc may not apply to you.
I'm assuming you knew that.

They’re telling you to “stay the course,” but watch out for developments.

Text from my financial advisor:

"Don't let the fluctuating value of your accounts get you down. You know they are long term investments. You own all the companies that deliver food, power, heat, phones, internet, oil, petroleum, and medications to consumers. Stick to the plan but let me know when your plan or cash flow needs change, and we can adjust if needed. If the companies you own crash and go away? Then the world has bigger problems for survival than money".

Text from my financial advisor:

"Don't let the fluctuating value of your accounts get you down. You know they are long term investments. You own all the companies that deliver food, power, heat, phones, internet, oil, petroleum, and medications to consumers. Stick to the plan but let me know when your plan or cash flow needs change, and we can adjust if needed. If the companies you own crash and go away? Then the world has bigger problems for survival than money".

Gulp.

Is this good news then?

Passing it on for others who may be in the same boat.

Continued:

"Me: Maybe I need stock in Purell or Lysol. Not sure if I'm joking or not.

Him: Good investor thinking!! ! ! That's is what your fund manager can do for you to slowly build your balances back to the high side in this fluctuation".

I asked him if I should go ahead with Lysol.

He said "No. You already own it in your investment. It's Reckitt Benckiser stock".

Never heard of them, but then why have my investments tanked?

Sorry folks just venting. Rough day. Just thought some of you might want the name Reckitt Benckiser.