SEC Filing Puts 50-Second Burr Call Under the Microscope

Agency: Senator's brother-in-law dumped stocks after conferring with Burr in early days of pandemic
By Jenn Gidman,  Newser Staff
Posted Oct 29, 2021 9:41 AM CDT
Sen. Burr's Brother-in-Law Dumped Stock After Phone Call
In this June 17, 2021, file photo, Sen. Richard Burr, R-NC, speaks during a hearing on Capitol Hill in Washington.   (AP Photo/Susan Walsh, File)

In February 2020, Sen. Richard Burr was the head of the Senate Intelligence Committee, as well as a member of the chamber's Health, Education, Labor, and Pensions panel. He also had staffers tasked with helping out with the emerging pandemic. Those ties, and the knowledge on the coronavirus he may have gleaned from them, are now front and center in a Securities and Exchange Commission probe into whether the North Carolina senator engaged in insider trading by dumping more than $1.6 million in stocks a week before last year's market crash, per the Hill.

ProPublica first reported on an SEC court filing from last week noting how on Feb. 13, 2020, less than three hours after Burr talked to his broker and got rid of stock he and his wife held in an IRA, the senator made a 50-second phone call to brother-in-law Gerald Fauth. Within one minute Fauth placed a call to his own broker; that broker wasn't in the office so he immediately called a second one and dumped stock in six companies that same day. Now the SEC "among other things ... is investigating whether [Burr] sold stocks on the basis of material nonpublic information" regarding COVID and "its potential impact on the US and global economies," per the filing.

Burr was one of a number of senators who got rid of stocks after attending coronavirus briefings early last year, including GOP Sens. James Inhofe and Kelly Loefler and Democratic Sen. Dianne Feinstein. The Justice Department closed probes of the latter three senators in May 2020, and also declined to charge Burr. Investor trading based on such nonpublic info that will likely change the price of the asset once it becomes public is banned by federal law. The STOCK Act similarly prohibits members of Congress "from using information gained through their office to enrich themselves in financial markets," per the Hill, which adds that Burr and his wife probably kept hundreds of thousands of dollars safe by getting rid of their stock.

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Burr has said in the past that he made his stock decisions based on public info only. Shortly after the stock dump, his lawyer told ProPublica, "Sen. Burr ... did not coordinate his decision to trade on Feb. 13 with Mr. Fauth." Burr, the SEC, and an attorney for Fauth didn't comment on questions submitted to them by ProPublica, while Fauth himself hung up the phone when contacted by a ProPublica journalist. (More Richard Burr stories.)

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