Four senators sold stocks before coronavirus threat crashed market
Four senators sold stocks shortly after a January briefing in the Senate on the novel coronavirus outbreak, unloading shares that plummeted in value a month later as the stock market crashed in the face of a global pandemic.
According to financial disclosure forms, Sens. Kelly Loeffler (R-Ga.), James Inhofe (R-Okla.), Dianne Feinstein (D-Calif.) and Richard Burr (R-N.C.) each sold hundreds of thousands of dollars in stocks within days of the Senate holding a classified briefing on Jan. 24 with Trump administration officials on the threat of the coronavirus outbreak.
The sales raise questions about whether the senators violated the STOCK Act, a law that bans members of Congress from making financial trades based on nonpublic information.
Loeffler and her husband, who is the chairman of the New York Stock Exchange, sold at least $355,000 in stocks from Jan. 24-31, according to Senate records, after the coronavirus briefing hosted by the Senate Health and Foreign Relations committees.
The senator and her husband also sold $890,000 in stocks from Feb. 5-14, just days after the first confirmed coronavirus cases emerged in the U.S. but nearly two weeks before community spread of the disease was confirmed within the country.
The sales, worth at least $1.2 million together, saved Loeffler and her husband from steep losses they would have incurred after the stock market’s crash began Feb. 24.
Loeffler said in a pair tweets Friday that she doesn’t control her and her husband’s financial assets and was informed of the sales on Feb. 16.
“This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement,” Loeffler tweeted.
This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.
— Senator Kelly Loeffler (@SenatorLoeffler) March 20, 2020
Loeffler was among several Republican senators who tamped down concerns about the administration’s response to the coronavirus outbreak while selling stocks that soon plunged within weeks of the disease spreading within the U.S. Loeffler is facing a tough election race this year, which includes a challenge from Rep. Doug Collins (R-Ga.).
Inhofe sold at least $180,000 in stocks on Jan. 27, days after the Senate’s coronavirus briefing, according to Senate records. Inhofe also sold at least $50,000 in stock in an asset management company on Feb. 20, four days before the stock market crashed.
Inhofe said in a statement Friday that he did not attend the Senate coronavirus briefing on Jan. 24, and instead met with children from Oklahoma who were in Washington, D.C., for the annual March for Life and with the nominee to be U.S. ambassador to Tanzania.
Inhofe added that he does not “have any involvement in my investment decisions” and instructed his financial adviser in December 2018 to begin selling all of his stock holdings two months after he was elected chairman of the Senate Armed Services Committee.
“I instructed my financial advisor to move me out of all stocks and into mutual funds to avoid any appearance of controversy. My advisor has been doing so faithfully since that time and I am not aware of or consulted about any transactions,” Inhofe said.
Inhofe’s financial disclosures show a steady stream of stock sales throughout 2019 and into early 2020. The senator also said he asked his financial adviser in December 2018 to reverse a purchase of stock in Raytheon, a U.S. defense contractor, that would have raised questions about conflicts of interest.
Inhofe wrote in a letter to the Senate Ethics Committee that his adviser made stock purchases “without my consultation or awareness.”
Inhofe’s sale came roughly a week after Burr on Feb. 13 sold between $628,000 and $1.72 million in stock while receiving classified briefings on coronavirus as chairman of the Senate Intelligence Committee.
“Senator Burr filed a financial disclosure form for personal transactions made several weeks before the U.S. and financial markets showed signs of volatility due to the growing coronavirus outbreak,” a spokesperson for Burr told ProPublica regarding the stock sales.
“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.”
Selling stocks before markets show signs of falling typically save an investor from financial losses.
On Friday, Burr asked the Senate Ethics Committee to investigate his stock sales, which he said were based on CNBC coverage of the coronavirus in Asia in mid-February.
Burr has come under further scrutiny after NPR reported this week that the senator compared the coronavirus outbreak to the 1918 influenza pandemic during a private Feb. 27 luncheon in Washington, D.C. Burr is scheduled to retire in early 2023 after his term ends, though he is under increasing pressure to resign now.
Trump and some Republicans lawmakers have faced intense criticism for playing down the threat of the novel coronavirus, which has infected more than 14,000 Americans and claimed at least 205 lives as of Friday morning, according to data compiled by Johns Hopkins University.
At least one Democratic senator also unloaded stock before the scale of the crisis became clear to the general public.
Feinstein, one the longest-tenured Senate Democrats, sold at least $500,000 in shares of Allogene Therapeutics, a California biotechnology company, on Jan. 31 and at least $1 million in Allogene stock on Feb. 18, according to Senate records.
A spokesman for Feinstein told The New York Times that she had nothing to do with the decisions to sell her stocks.
“All of Senator Feinstein’s assets are in a blind trust,” Tom Mentzer said in a statement. “She has no involvement in her husband’s financial decisions.”
Updated at 11:11 a.m.