SEC Ends Insider Trading Probe of Former Republican Sen. Richard Burr With No Action

Ryan Morgan
By Ryan Morgan
January 9, 2023Politics
SEC Ends Insider Trading Probe of Former Republican Sen. Richard Burr With No Action
Sen. Richard Burr (R-N.C.) gives an opening statement during a Senate Health, Education, Labor, and Pensions Committee hearing to discuss reopening schools during Covid-19 at Capitol Hill in Washington on Sept. 30, 2021. (Greg Nash- Pool/Getty Images)

The U.S. Securities and Exchanges Commission (SEC) has closed down a more than two-year probe of stock trades made by former Sen. Richard Burr (R-N.C.) while in office in 2020, taking no action against the outgoing senator.

Burr announced the closure of the probe in a statement he shared with CNN on Friday.

“This week, the SEC informed me that they have concluded their investigation with no action,” Burr’s statement read. “I am glad to have this matter in the rearview mirror as I begin my retirement from the Senate following nearly three decades of public service.”

In March 2020, Burr and his brother-in-law Gerald Fauth came under scrutiny for the timing of trades he made in the early days of the COVID-19 pandemic.

Senate financial disclosures showed Burr sold between $628,000 and $1.7 million in stocks on Feb. 13, 2020. Burr’s actions included sales of stocks in the hospitality industry, which suffered heavy financial losses shortly thereafter as the pandemic hit. Burr carried out those stock sales after he received closed-door briefings to learn about the threat posed by COVID-19.

Lawmakers’ Stock Sales Raised Questions

Burr was among a number of senators who came under scrutiny for the timing of their stock sales.

Sens. Dianne Feinstein (D-Calif.), Kelly Loeffler (R-Ga.), and Jim Inhofe (R-Okla.) also came under scrutiny for their pandemic-era stock trades.

Disclosures forms showed Feinstein sold between $1.5 million and $6 million in stock from a California biotech company called Allogene Therapeutics between Jan. 31 and Feb. 18, 2020.

Disclosures showed Loeffler sold between $1.3 million and $3.1 million in early January in stocks including the Exxon Mobil oil company, and Resideo Technologies, which makes smart home products. Records also showed that Loeffler purchased up to $250,000 in stocks in Citrix, a company that sells software to assist people working from home.

According to Senate records, Inhofe sold up to $500,000 in stocks in PayPal and in a real estate company called Brookfield Asset Management.

By May 2020, the U.S. Department of Justice had closed down investigations into Feinstein, Loeffler, and Inhofe, but Burr’s stock trades remained under scrutiny.

As part of the DOJ investigation, FBI agents searched Burr’s Washington D.C.-area home and seized his cellphone.

Burr maintained his innocence throughout the probes and insisted he made his stock trading decisions “solely on public news reports,” including CNBC reports out of Asia, where the COVID-19 outbreak began.

The SEC had previously said that Burr possessed “material nonpublic information concerning COVID-19 and its potential impact on the U.S. and global economies,” according to CNN.

The 2012 Stop Trading on Congressional Knowledge (STOCK) Act prohibits lawmakers and their aides from using “non-public information” obtained through their official duties to make a private profit, including insider trading.

Burr agreed to step down as Chairman of the Senate Intelligence Committee in May of 2020 as the investigations into his stock trades continued.

SEC Closes Investigation 2 Years After DOJ

The SEC’s decision to close its investigation came about two years after the DOJ closed its own investigation of Burr.

“Tonight, the Department of Justice informed me that it has concluded its review of my personal financial transactions conducted early last year,” Burr said in a statement in January 2021. “The case is now closed. I’m glad to hear it. My focus has been and will continue to be working for the people of North Carolina during this difficult time for our nation.”

The DOJ and SEC investigations had lasted through almost the entire second half of Burr’s third term in office. On Jan. 3, Burr retired from the Senate. Burr is succeeded by Sen. Ted Budd (R-S.C.).

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