NC Sen. Richard Burr Under Investigation for Insider Trading
The U.S. Securities and Exchange Commission (SEC) announced in October that its investigation into NC GOP Senator Richard Burr and his brother-in-law Gerald Fauth was still underway. Burr sold $1.65 million in stock in February 2020, just before the outbreak of the Coronavirus pandemic. Source: NBC News
The U.S. Securities and Exchange Commission (SEC) announced in October that its investigation into NC GOP Senator Richard Burr and his brother-in-law Gerald Fauth was still underway. Burr sold $1.65 million in stock in February 2020, just before the outbreak of the Coronavirus pandemic. The court filings by the SEC state, “Among other things, the Commission is investigating whether, on February 13, 2020, Senator Burr sold stocks based on material nonpublic information in violation of the federal securities laws." One of the laws in question is the 2012 STOCK Act which prohibits legislators from trading stock based on private information. Senator Burr notably voted against this bill.
The court filing mentions a phone call between Sen. Burr and Gerald Fauth that took place shortly before the sales. Thus the timing of the call and the stock trades are a primary focus of the investigation. The FBI seized Burr's phone in May 2020 as part of the initial investigation, which led him to step down as the chairman of the Senate Intelligence Committee. Ultimately, Burr publicly announced that the Justice Department had closed its investigation without filing criminal charges on Inauguration Day.
In March 2020, Burr stated, “I relied solely on public news reports to guide my decision regarding the sale of stocks. Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time.” Nevertheless, the court filings show that the phone calls in question, between Burr and Fauth and to their respective stockbrokers, all took place within the span of a few hours on February 13, 2020. Burr sold $1.65 million, and Fauth sold between $97,000 and $280,000 in stocks that day.
All of this commotion around stock sales comes after Sen. Burr’s 2016 announcement that he would not seek reelection to the Senate in 2022. Interestingly, the same day one year after the aforementioned phone calls, Burr voted to impeach former President Donald Trump during his second impeachment trial. Given the closing of the DOJ investigation and Sen. Burr’s impending retirement, it is unclear what outcome may befall the veteran lawmaker or his brother-in-law. For now, the SEC is seeking Fauth’s testimony in the investigation to determine to what extent Sen. Burr shared information with him or to provide the commission with more details on the senator’s actions. As the investigation continues into Richard Burr’s final year in the United States Senate, the eyes of the SEC and the Republican and Democratic candidates who are running to fill his seat will be on him.