One of the nation’s most prominent senators is stepping down from his role as chair of the Senate intelligence committee after FBI agents seized his cellphone Wednesday night as part of an investigation into improper stock trading practices.
U.S. Sen. Richard Burr, a Republican from North Carolina, turned over his cellphone to agents after they served a warrant at Burr's Washington, D.C., residence, according to the Los Angeles Times.
Shortly after noon on Thursday, Senate Majority Leader Mitch McConnell announced Burr is stepping down as committee chair while the FBI is conducting its examination.
A second law enforcement official said FBI agents served a warrant in recent days on Apple to obtain information from Burr’s iCloud account and said agents used data obtained from the California-based company as part of the evidence used to obtain the warrant for the senator’s phone.
Burr is under federal investigation after selling millions of dollars in stocks after he received intelligence briefings in late January about the emerging economic impact of the coronavirus outbreak.
Burr is one of four lawmakers to face accusations of insider trading but is the first to face a criminal probe in the matter. The three others include James Inhofe of Oklahoma, Democratic Sen. Dianne Feinstein of California, and Georgia’s newest senator, Kelly Loeffler.
Reports say all members of the U.S. Senate received a confidential Jan. 24 briefing about the toll the coronavirus outbreak would have on cargo shipments and supply chains. The briefing was more than a month before the virus was declared a pandemic March 11. Loeffler has said no confidential information was shared at the briefing.
In the days afterward, reports say stocks owned by the senators or their spouses were sold off in industries that were later most stricken by the outbreak.
Each has denied any wrongdoing, and Loeffler said the attacks on her are "100 percent political," according to Fox News. Loeffler is also arguing the her stock trading was done by financial advisers who acted independently and she didn't know about transactions until after they occurred.
The North Carolina Republican was already facing a separate federal lawsuit by an investor in the Wyndham Hotel chain who accused Burr of selling off as much as $150,000 in stock before it plunged nearly two-thirds in value.
The lawsuit, filed by Thomas P. O’Brien, a former federal prosecutor on behalf of an investor named Alan D. Jacobson, states the intelligence briefings Burr received as chairman of the Senate Intelligence Committee would have provided he and others on the panel an unfair market advantage.
“Senator Burr owed a duty to Congress, the United States government, and citizens of the United States, including Plaintiff, not to use material nonpublic information that he learned by virtue of his duties as a United States Senator in connection with the sale or purchase of any security,” the lawsuit says, according to ABC. “Senator Burr breached that duty by selling stock, including Wyndham stock, based on that material nonpublic information.”
The Stock Act, passed in 2012 under the Obama administration, makes it illegal for lawmakers to use their access to guide investment decisions.
Insider trading is subject to a maximum of $5 million in fines (up to $25 million for a business entity), and up to 20 years imprisonment, or both.
According to Senate records, Feinstein’s husband sold between $1.5 million and $6 million in stock of Allogene Therapeutics, a biotech company, in January and February.
Feinstein’s spokesperson said the senator denies any wrongdoing and “has no involvement in any of her husband’s financial decisions.”
Inhofe has since said he was not at the briefing. Records show he sold five stocks, worth between $180,000 and $400,000, in January, and another for $50,000 to $100,000 in February.
“I do not have any involvement in my investment decisions,” he wrote in a statement addressing the allegations first reported by The New York Times. “In December 2018, shortly after becoming chairman of the Senate Armed Services Committee, I instructed my financial advisor to move me out of all stocks and into mutual funds to avoid any appearance of controversy. My advisor has been doing so faithfully since that time ...”
Loeffler had been on the job less than three weeks when she attended the private, senators-only briefing on the spread of COVID-19.
In the days and weeks after, financial disclosures show that either she or her spouse sold 27 stocks valued between $1.275 million and $3.1 million from Jan. 24 through Feb. 14, according to Senate records.
They also purchased three stocks at a value of $450,000 to $1 million, including shares in Citrix, a software company that has gained about 15% in value since Loeffler and her husband bought the stock last month.
Scrutiny of her financial deals have led Democrats and Republicans to ask for her to resign or be investigated.
Loeffler is married to Jeffrey Sprecher, the chairman of the New York Stock Exchange and CEO of Intercontinental Exchange, a financial and commodities markets company.
Intercontinental Exchange, also Loeffler’s former employer, has since said the transactions made on her behalf were in compliance with its policies.
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