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Thursday, March 28, 2024

Biden’s SEC Targets RINO Sen. Burr for Alleged Insider Trading

'If Burr were forced out, his short-term replacement in the evenly-split Congress would be filled by radical leftist Gov. Roy Cooper...'

(Headline USA) Retiring RINO Sen. Richard Burr, R-NC, and his brother-in-law are being investigated by the Securities and Exchange Commission for potential insider trading, a case that stems from their abrupt sales of financial holdings during the early days of the coronavirus pandemic, according to recent federal court filings.

Burr is among several lawmakers from both parties who faced outrage over their aggressive trading in early 2020, before the economic threat from the virus was widely known.

That fueled accusations that the members of Congress were acting on inside information gained through their official duties to benefit financially, which is illegal under a law known as the STOCK Act.

It is unclear whether Sen. Dianne Feinstein, D-Calif., who unloaded by far the largest amount of stock, has been the subject of investigation also under the Biden administration.

The issue may have been one reason that former Sen. Kelly Loeffler, R-Ga., was unable to retain her appointed seat in the 2020 election, falling to Democrat Raphael Warnock in a special-election runoff.

It might also have helped spur Burr’s decision not to run again in 2022, although his base of support may have eroded during the Trump administration after he sided with Democrats on several measures to undermine the president—including the appointment of Special Counsel Robert Mueller as part of the Russia-collusion hoax.

Nonetheless, his scrutiny by the current administration could have serious implications if Burr were forced out. His short-term replacement in the evenly-split Congress would be filled by radical leftist Gov. Roy Cooper.

That would allow Senate Democrats to avoid the nuisance of having to negotiate with centrist Sen. Joe Manchin, D-W.Va., and it might give a Democrat—presumably front-running candidate Cal Cunningham—an incumbent advantage in next year’s race, which is likely to be against Rep. Ted Budd, R-NC.

Burr was previously investigated by the Trump administration’s Justice Department for offloading $1.6 million from his portfolio in January and February 2020. The department cleared him of wrongdoing almost a year later—on Jan. 19, Donald Trump’s last full day in office.

But the SEC continued to investigate Burr, according to court documents filed in the Southern District of New York that were first made public last week. The agency enforces federal securities law.

Attorneys for Burr—as well as for Gerald Fauth, who is the brother of Burr’s wife—did not immediately respond to requests for comment. Burr has previously denied any wrongdoing.

The filings stem from a case brought by the SEC to force Fauth to comply with a subpoena. The agency argued that his close relationship with Burr and a phone call between the two, followed by calls to Fauth’s brokers, made his testimony “critical.”

“Whether Fauth was himself tipped with inside information from Senator Burr, and whether Fauth knew Senator Burr was violating his duties under the STOCK Act by conveying that information, are matters Fauth is uniquely positioned to speak to,” the SEC said in a filing.

To bolster their case, SEC attorneys released a timeline of phone calls from Feb. 13, 2020, the day Burr sold off the vast majority of his portfolio. It was roughly one week before the stock market went into a tailspin.

At the time Burr had “material nonpublic information concerning Covid-19 and its potential impact on the U.S. and global economies” some of which he “learned through his position” as chairman of the Senate Intelligence Committee and from former staffers directing the government’s coronavirus response, the SEC alleges in the court filing.

That day, after Burr instructed his own broker to sell, he spoke with Fauth in a call that lasted 50 seconds.

One minute later, the court document states, Fauth called one of his brokers. Two minutes later, he called another broker and gave instructions to sell shares in his wife’s account.

Later that day, Burr, who was staying at the Fauths’ home in suburban Washington, logged into his online brokerage account from an IP address registered to Fauth’s wife, court records state.

Burr has drawn perhaps the most scrutiny of all members of Congress for his trades in the early days of the pandemic. He was captured in a recording privately warning a group of influential constituents in early 2020 to prepare for economic devastation.

Burr denied trading on private information, but stepped aside from his position as chairman of the Senate Intelligence Committee after the FBI obtained a search warrant to seize a cellphone.

Burr is not seeking reelection next year. He was elected to the Senate in 2004 after a 10-year run in the House.

The STOCK Act, the statute which Burr and Fauth are being investigated under, was passed with bipartisan support in 2012 following a congressional stock-trading scandal. It was cheered by government ethics groups and watchdogs as a long-overdue step.

But in the nearly decade since, no one has been convicted under the law. Meanwhile, congressional stock trading has continued apace.

Legal experts say such insider trading cases are exceptionally difficult to prosecute because they require definitively proving whether someone acted on nonpublic information. That hinges on demonstrating intent — a high burden.

That’s part of why SEC investigators are trying to get a court order to force Fauth to testify a-year-and-a-half after they first issued a subpoena.

Fauth, a government official who serves as chairman of the National Mediation Board, has repeatedly cited his health as a reason for not complying. His attorneys have said it is a valid reason.

But he has continued to tend to his duties for the mediation board, participating in calls and meetings. He was recently nominated for another three-year term and appeared last month with the agency’s attorney to be interviewed by Republican Senate staffers before his confirmation hearing for the post.

“When he appeared for that interview, Fauth does not appear to have followed (his) physician’s advice that he avoid ‘stressful situations,’” the SEC wrote in the court filing.

Adapted from reporting by the Associated Press

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