A Republican congressman might have just found himself in some serious trouble with the law.
Breitbart reports that the federal Securities and Exchange Commission (SEC) has released more details in its investigation into whether GOP Sen. Richard Burr (NC) violated the law when he dumped $1.6 million in stocks last February just before the coronavirus pandemic hit.
The SEC wrote in its latest court filing:
It appears from the commission’s investigation that Senator Burr possessed material nonpublic information concerning COVID-19 and its potential impact on the U.S. and global economies.
In other words, the agency is alleging that Burr engaged in insider trading by making stock decisions based not on public knowledge, but on “nonpublic” facts he learned as a congressman and as part of several congressional committees.
All the details
This incident doesn’t just involve Burr, but it also involves his brother-in-law Gerald Fauth as well as his stockbroker. Both are under investigation by the SEC.
In the SEC’s latest filings, the agency explains the order of events that took place one morning last February.
Around 9 a.m., the SEC says, Burr called his broker to tell him to sell $1.6 million in stocks; at 11:30 a.m., Burr called Fauth; and a minute later, Fauth called his primary broker, who was not available. Around 11:35 a.m., the filings state, Fauth called another broker instructing him to sell several stocks, and a few minutes later, that’s exactly what the broker did.
Whereas Burr sold about $1.6 million, Fauth is alleged to have sold somewhere between $97,000 and $280,000. About a week later, Breitbart reports, the stock market plummeted.
Burr denies claims
Thus far, Burr has maintained that he’s done nothing wrong.
“Sen. Burr participated in the stock market based on public information and he did not coordinate his decision to trade on Feb. 13 with Mr. Fauth,” an attorney for the congressman said in a statement, according to Breitbart.
Meanwhile, the SEC is still trying to get Fauth to comply with a subpoena. According to the agency, it’s a battle they’ve been waging for over a year.
Fauth has apparently tried to use a medical excuse to get out of the subpoena. But the SEC noted that Fauth has been “healthy enough to continue his duties at the National Mediation Board.” We’ll see what the judge has to say.