Report: Richard Burr’s Brother-in-Law Dumped Stock Minutes After Their 50-Second Chat - Vanity Fair
As you probably do not recall because so many other traumatic things have happened in the intervening year and half, back in February 2020, when the novel coronavirus was spreading across the country, Senate Intelligence Committee Chairman Richard Burr cowrote an op-ed insisting that Americans had little to worry about because, he claimed, “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus.” A couple other things Burr got up to that month? Warning “a small group of well-connected constituents” that the virus was “much more aggressive in its transmission than anything that we have seen in recent history,” and dumping about $1.65 million in stocks shortly before the market tanked, apparently in response to the realization that the COVID-19 situation was going to be very, very bad.
After news of Burr’s activities went public, the senator from North Carolina denied any wrongdoing, insisted that reporting to the contrary was a “tabloid-style hit piece,” and swore that the information on which he based his trade was public knowledge. Yet according to a new investigation, the real story is a lot shadier. Per CNBC:
Sen. Richard Burr of North Carolina and his brother-in-law, who is chairman of an independent federal agency, spoke on the phone shortly before both men sold off stocks weeks ahead of national COVID lockdowns in 2020, the Securities and Exchange Commission said in a civil court filing. The filing comes as the SEC continues to investigate whether Burr, a Republican, and his brother-in-law Gerald Fauth sold the stocks on the basis of material nonpublic information that Burr obtained as part of his job. Members of Congress are barred from trading on nonpublic information they receive as a result of their positions as lawmakers.
The SEC, in a new filing in its civil case, said that Burr, at 8:45 a.m. on Feb. 13, 2020, called his stockbroker to sell more than $1.65 million worth of stock, “all but one of the equities in his and his wife’s joint individual retirement account…portfolio.” At 11:32 a.m. that day, Burr called Fauth’s cell phone, according to the filing in U.S. District Court in Manhattan. “The call lasted 50 seconds.”
At 11:33 a.m., a minute or less later, Fauth called his primary stockbroker’s landline, the SEC said. After failing to reach his first broker, Fauth called a second broker within two minutes and “directed her to sell several stocks in his wife’s account,” the filing reveals.
According to ProPublica, Fauth ended up selling between $97,000 and $280,000 worth of shares in six companies, “including several that were hit particularly hard in the market swoon and economic downturn.” The SEC has asked a judge to force Fauth to comply with a subpoena that was issued in March 2020; thus far, Fauth has reportedly claimed that a medical condition prevents him from cooperating, despite the fact that, as ProPublica notes, “he has been healthy enough to continue his duties at the National Mediation Board.”
In its filings, according to ProPublica, the SEC accused Burr’s brother-in-law of waging “a relentless battle” to evade the subpoena. Per CNBC, the agency also wrote that “Among other things, the Commission is investigating whether Senator Richard Burr...sold stocks on the basis of material nonpublic information on February 13, 2020, in violation of the federal securities laws, including the STOCK Act, a statute passed by the U.S. Congress in 2012 to prohibit its members from using nonpublic information derived from their positions for their personal benefit.” The SEC added that it is also investigating “whether [Fauth] and his wife, Mary Fauth, sold securities on the same day on the basis of material nonpublic information supplied to them by Senator Burr in violation of his duties.”
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source: https://www.vanityfair.com/news/2021/10/richard-burr-brother-in-law-insider-trading
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