Burr's brother-in-law sold thousands in stocks the same day as Burr
Sen. Richard Burr's brother-in-law sold a half-dozen stocks for as much as $280,000 on the same day in February that the North Carolina Republican made dozens of stock sales ahead of the market downturn caused by the coronavirus outbreak, according to government documents.Posted — Updated
Burr's brother-in-law, Gerald Fauth, sold between $97,000 and $280,000 worth of shares in six stocks on February 13, according to documents filed with the Office of Government Ethics. That day, Burr and his wife sold 33 stocks valued between $628,000 and $1.7 million, according to Senate records. Burr denies he coordinated his trading with his brother-in-law that day.
Fauth is a member of the National Mediation Board, which provides mediation for interstate commerce in the aviation and rail industries. His sales on the same day as his brother-in-law raise further questions about why Burr was motivated to sell off a sizable portion of his stock portfolio in one day -- and the steps he took related to the sales.
Fauth did not respond to phone and email messages from CNN seeking comment.
As chairman of the Senate Intelligence Committee, Burr received classified briefings on the spread of the coronavirus. He said he made the trades based solely on public information, not information he received from the committee, and he asked the Senate Ethics Committee to review the sales after they were made public. Separately, the FBI and the Securities and Exchange Commission have contacted Burr as part of a review of stock trades made by lawmakers, CNN previously reported.
"Senator Burr participated in the stock market based on public information and he did not coordinate his decision to trade on February 13 with Mr. Fauth," Burr's attorney, Alice Fisher of Latham & Watkins, said in a statement.
There's no indication that the sales broke any laws or Senate rules. Congress passed the Stock Act in 2012, which made it illegal for lawmakers to use inside information for financial benefit. The Stock Act would not apply to Fauth, but he is subject to insider trading laws, although there's no evidence Burr or anyone else provided him information that would run afoul of insider trading rules.
Burr declined to discuss the controversy at the Capitol on Tuesday when asked whether he had been in touch with the Justice Department or the Ethics panel.
"I'm not addressing it at all," Burr said. "Let's let these things play out."
Fauth's sales were first reported by ProPublica. Fauth's filing with the Office of Government Ethics was provided to CNN and ProPublica by Luke Brindle-Khym, a partner and general counsel at QRI, an investigative firm based in New York.
Since February 13, when there were 15 confirmed coronavirus cases in the US, the stock market has seen a significant downturn as much of the US economy has shut down. The Dow Jones Industrial Average has lost nearly 20% of its value since February 13, dropping more than 5,700 points to a close of 23,665 on Wednesday.
Copyright 2023 by Cable News Network, Inc., a Time Warner Company. All rights reserved.