Sen. Richard Burr Faces Lawsuit Over Timing Of Stock Sale

Originally published on March 25, 2020 12:18 pm
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STEVE INSKEEP, HOST:

What are members of Congress going to do about stock trading by themselves? Revelations about Senator Richard Burr raised this question. Our colleague Tim Mak revealed that Senator Burr gave dire warnings about the pandemic to an exclusive group a month ago. That was a time when the president was downplaying the threat. Then ProPublica revealed that Burr also sold a lot of stock before the market crashed.

NPR's Tim Mak is still on this story. Tim, good morning.

TIM MAK, BYLINE: Hey. Good morning.

INSKEEP: Should lawmakers be trading in stocks at all?

MAK: Well, some lawmakers believe that they shouldn't be allowed to do that at all. Lawmakers in the House have introduced what they call the Ban Conflicted Trading Act. Now, that's a bill first championed by Jeff Merkley of Oregon in the Senate. It would prohibit lawmakers from trading individual stocks. So along with Congressman Joe Neguse and Congresswoman Alexandria Ocasio-Cortez, Congressman Raja Krishnamoorthi is one of the lead sponsors of the legislation.

RAJA KRISHNAMOORTHI: I think it's time that the public knows that their members of Congress are not profiteering off of, you know, information that they gain through their public service. It's not fair, and it's not right.

MAK: Democrats are the initial co-sponsors to the legislation, but given the bipartisan outrage at Burr's actions, they have some hope that Republicans will join them.

INSKEEP: And to be clear, this is telling lawmakers, you can still have money. You can still buy...

MAK: Sure, yep.

INSKEEP: ...A mutual fund, index fund, just not individual stocks...

MAK: That's right.

INSKEEP: ...Where you could profit off of inside information. Now, this is not going to apply to Senator Burr if it becomes law because he's done what he's done. But he's being sued, isn't he?

MAK: That's right. Alan Jacobson of California was a shareholder in Wyndham Hotels and Resorts, one of the stocks that Burr sold. And he's alleging that Senator Burr exploited information available to him as a senator for personal gain. Thomas O'Brien is a lawyer representing Jacobson. And he said that they're trying to take the lead in holding Burr accountable.

THOMAS O'BRIEN: There's a vacuum there, and we're not waiting for the federal government, regulatory agencies. We're moving forward to remedy the wrong that the senator's created against our client and others.

MAK: I should note I reached out to Senator Burr's office for a comment for this story but received no response. Previously, he has said that he relied only on public news stories to make his decisions to dump stocks. He's also asked the Senate Ethics Committee to open an investigation into his own actions.

INSKEEP: Could he face other scrutiny?

MAK: Well, the big question is whether the Justice Department and/or the Securities and Exchange Commission will open up an investigation based on the facts we already know in the public domain. So to answer that, I tried to ask around to people who had some experience in this matter. I spoke to Katie Goldstein, who used to hold - who used to lead these sorts of investigations in the U.S. Attorney's Office for the Southern District of New York.

KATIE GOLDSTEIN: When I first read the allegations, the thought that crossed my mind was, it seems likely to me that there will be a grand jury investigation of this conduct. The circumstances were such that I thought it was likely that a U.S. attorney's office, perhaps the Southern District of New York, would open an investigation.

MAK: So that's her view and her estimation. But to be clear, there's no evidence that an actual investigation has started. I also reached out to the Justice Department and the SEC, and they had no comment.

INSKEEP: So a couple of things going on - people saying there ought to be a law, and also maybe some questions about whether Burr broke an existing law. Tim, thanks so much.

MAK: Thank you very much.

INSKEEP: That's NPR's Tim Mak. Transcript provided by NPR, Copyright NPR.