2020 Congressional insider trading scandal

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The 2020 Congressional insider trading scandal was a political scandal in the United States involving members of the United States Senate due to multiple Senators allegedly violating the STOCK Act by selling their stocks before the stock market crash on February 20, 2020. The Department of Justice initiated a probe into the stock transactions on March 30, 2020.

History

Background

On January 26, 2012, Senator Joe Lieberman introduced the Stop Trading on Congressional Knowledge (STOCK) Act that would prohibit the use of non-public information for private profit, including insider trading by members of Congress and other government employees. The bill was passed by the Senate with only Senators Richard Burr, Jeff Bingaman, and Tom Coburn voting against it. The House of Representatives voted to approve of the bill and it was signed into law by President Barack Obama on April 4, 2012.[1]

Timeline

On January 24, 2020, the Senate Committees on Health and Foreign Relations held a closed meeting with only Senators present to brief them about the coronavirus outbreak and how it would effect the United States.[2][3] Following the meeting Senator Kelly Loeffler and her husband Jeffrey Sprecher, the chairman of the New York Stock Exchange, made twenty-seven transactions to sell stocks worth between $1,275,000 and $3,100,000 and two transactions to buy stock in Citrix Systems which saw an increase following the stock market crash.[2] Senator Dianne Feinstein had stock worth between $1.5 million and $6 million sold from January 31 to February 18, although her stock was held in a blind stock and she stated that all of the transactions were made by her husband Richard C. Blum and that she wasn't present at the Senate meeting, and Senator Jim Inhofe sold around $400,000 in stock on January 27, although he stated that he was not present for the January 24 meeting.[4][5]

On February 7, Senator Burr, the Chair of the Senate Intelligence Committee, stated in an open-editorial on how the government could respond to coronavirus that "Luckily, we have a framework in place that has put us in a better position than any other country to respond to a public health threat, like the coronavirus," However, on February 13, he and his wife sold between $628,000 and $1.7 million worth of stocks through thirty-three transactions and on February 27, Burr stated that "There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," at a Capitol Hill Club luncheon and his statement was later leaked in a secret recording.[6][7]

On March 19, ProPublica published an article showing that Burr had sold his stocks shortly before the stock market crash and Loeffler, Inhofe, and Feinstein's stock selling was also reported. NPR asked Caitlin Carroll, Burr's spokesperson, for a comment on the alleged violations and she responded with "lol" and then clarified that "As the situation continues to evolve daily, he has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy."[6]

Tucker Carlson called for Burr to resign from the Senate and be prosecuted for insider trading on a segment of Tucker Carlson Tonight.[8] Representative Alexandria Ocasio-Cortez called for Burr to resign and Representative Joaquin Castro called for an investigation into the stock selling.[9] Representative Doug Collins, who is running against Loeffler in Georgia Senate special election, criticized her by stating "People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain? I'm sickened just thinking about it."[10]

On March 20, Burr requested for the Senate Ethnics Committee to investigate his stock trading history and stated that he only used publicly available information to make his decisions.[11] On March 30, the Department of Justice imitated a probe into the stock transactions with the Securities and Exchange Commission.[12]

Official accused

References

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