A lawsuit against Republican North Carolina Sen. Richard Burr claims he committed securities fraud by selling $1.7 million in stocks while possessing private information about the impact of coronavirus.
The lawsuit comes after Burr was widely criticized for delivering a briefing to wealthy members of a private club on the potential impact of coronavirus on Feb. 27. Many of the organizations with access to the meeting were also top donors to his 2016 Senate campaign.
The group that organized Burr’s meeting was the Tar Heel Circle (THC), whose members include major businesses and other organizations in North Carolina, according to NPR.
At least ten of the group’s 38 member groups ranked in Burr’s top 100 donors for his 2016 campaign. (RELATED: Canada Urges Trump Not To Send Troops To Northern Border)
His top three donors, Reynolds American, Altria Group, and Duke Energy, are all members of the THC. Individuals and PACs affiliated with Reynolds donated $162,925; Altria $83,250, and Duke $79,900.
Other THC members in his top 100 donors are Lowe’s, the Nucor Corporation, Premier Inc, Honeywell International, Genworth Financial, Wells Fargo, and United Health Group, according to data on Open Secrets.
At least two additional THC member groups–Fidelity Investments and Moore Van Allen–made donations to Burr’s campaign but did not rank in the top 100.
Taken in total, individuals and PACs associated with these organizations donated more than $630,000 to Burr’s reelection effort.
During the meeting Burr struck a much more serious tone regarding the coronavirus than he had done publicly, perhaps giving attendees and early look at where the stock market was headed, according to NPR. A tape of the meeting obtained by NPR revealed him comparing the virus to the 1918 Spanish Flu, which had a death toll in the millions. (RELATED: Rick Wilson Appears To Wish Coronavirus On First Lady)
“Every company should be cognizant of the fact that you may have to alter your travel. You may have to look at your employees and judge whether the trip they’re making to Europe is essential or whether it can be done on video conference. Why risk it?” he said. “There will be, I’m sure, times that communities, probably some in North Carolina, have a transmission rate where they say, ‘Let’s close schools for two weeks. Everybody stay home.”
Burr has denied both giving THC members non-public information and using any non-public information for his own gain, however.
“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13. Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time,” he said in a statement. “Understanding the assumption many could make in hindsight however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency.” (RELATED: Trump Admin Moves To Limit Huawei’s Access To Computer Chips)
In a tabloid-style hit piece today, NPR knowingly and irresponsibly misrepresented a speech I gave last month about the coronavirus threat.
Let me set the record straight. 1/
— Richard Burr (@SenatorBurr) March 19, 2020
Burr was not the only Senator to get caught up in rumors of insider trading, however. Republican Georgia Senator Kelly Loeffler sold roughly $3.1 million in stocks she jointly held with her husband between January 24 and February 14, just before the disease put the stock market into freefall and after a private all-Senate meeting on the issue. (RELATED: Doug Collins Rips Kelly Loeffler For Dumping Stocks After Private Meeting On Coronavirus Impact)
Loeffler, however, claims a third party in charge of her finances made the sales and that she wasn’t aware until much later, she told Fox News Host Tucker Carlson.
“I decided that I was going to maintain the same posture that I had with the financial services industry, which was to have the third-party person and a set of advisers that were fully charged and able to make these transactions on my own so that I did not have to be involved in any of the decision-making around these financial transactions,” Loeffler said, adding that such a practice “worked very well in the private sector” and “kept us from having to have concerns around insider trading.”