Feds drop insider-trading probe of Sen. Loeffler
Wednesday, May 27, 2020
The U.S. Justice Department has closed insider-trading investigations into three U.S. senators, including Georgia's Kelly Loeffler.
Loeffler's portfolio came under fire in March when a large number of stocks that she and her husband owned were sold off shortly after early coronavirus briefings. The stock market soon tanked.
In a statement, a spokesman for the Loeffler said the “exoneration by the Department of Justice affirms what Senator Loeffler has said all along — she did nothing wrong. This was a politically motivated attack shamelessly promoted by the fake news media and her political opponents."
Loeffler, a Republican who became a senator in January, and her husband dumped substantial portions of their portfolio and purchased new stocks around the time Congress was receiving briefings on the seriousness of the pandemic. Loeffler's husband, Jeffrey Sprecher, is chairman of the New York Stock Exchange, and she has said the accounts were managed by third-party advisers.
A Loeffler spokesperson had said that the senator forwarded documents to the department, the Securities and Exchange Commission and the Senate Ethics Committee "establishing that she and her husband acted entirely appropriately and observed both the letter and the spirit of the law."
Also closed were the investigations of Sens. Dianne Feinstein of California and Jim Inhofe of Oklahoma, according to people familiar with notifications sent to the senators.
The developments indicate that federal law enforcement officials are narrowing their focus in the stock investigation to Sen. Richard Burr, R-N.C, the former Senate Intelligence Committee chairman. Agents showed up at his Washington-area home about two weeks ago with a warrant to search his cellphone.
Senate records show that Burr and his wife sold between roughly $600,000 and $1.7 million in more than 30 transactions in late January and mid-February, just before the market began to dive and government health officials began to sound alarms about the virus. Burr has denied any wrongdoing.
Loeffler, Inhofe and Feinstein were notified Tuesday that they are no longer under investigation, according to three people familiar with the contacts but not authorized to speak about them.
Feinstein reported that her husband sold off between $1.5 million and $6 million worth of stock in Allogene Therapeutics before the market drop. The San Francisco-based biotech company researches and develops cures for cancer. Inhofe sold anywhere between roughly $395,000 and $850,000 worth of stock he held in multiple companies in late January and early February, according to a disclosure.
Like Loeffler, both Inhofe and Feinstein denied any wrongdoing or involvement in the trades. Inhofe, a Republican, tweeted in March that he had asked his financial adviser to move him out of stocks and into mutual funds in 2018, shortly after he became chairman of the Senate Armed Services Committee.
Both Loeffler and Feinstein had acknowledged contacts with the Justice Department. A spokesman for Feinstein said earlier this month that the Democratic senator was asked "some basic questions" by law enforcement about sales her husband made and had voluntarily answered questions.
Meanwhile, Burr temporarily stepped aside as chairman of the intelligence panel during the probe, saying he didn't want it to be a distraction. He also called for the Senate Ethics Committee to investigate his actions.
A spokeswoman for Alice Fisher, Burr's attorney, said Fisher would have no comment. The attorney has previously said that the senator has been "actively cooperating" with investigators.
"From the outset, Senator Burr has been focused on an appropriate and thorough review of the facts in this matter, which will establish that his actions were appropriate," Fisher said in a statement earlier this month.
Burr has acknowledged selling the stocks because of the coronavirus but said he relied “solely on public news reports,” specifically CNBC’s daily health and science reporting out of Asia, to make the financial decisions.