The Securities and Exchange Commission is still investigating U.S. Sen. Richard Burr for insider trading related to his sale of more than $1.6 million in stocks at the onset of the coronavirus pandemic, according to a court filing by the SEC.
In its filing, which came in a related case involving stock sales by Burr’s brother-in-law, the SEC says it “is investigating whether Senator Richard Burr ... sold stocks on the basis of material nonpublic information on February 13, 2020, in violation of federal securities laws.”
The SEC is also investigating whether Burr’s brother-in-law and sister-in-law — Gerald and Mary Fauth — “sold securities that same day on the basis of material nonpublic information supplied to them by Senator Burr in violation of his duties.”
Gerald Fauth is the brother of Burr’s wife, Brooke.
The details in the document, filed in U.S. District Court in the Southern District of New York, were first reported by ProPublica.
Burr is the top-ranking Republican on the Senate’s health committee and was, until May 2020, the chairman of the Senate Intelligence Committee.
Burr, who is not running for reelection in 2022, has raised more than $524,000 as of the end of September for his legal defense through a legal expense trust fund, according to documents filed with the Office of Public Records. The fund has paid $565,000 to the Lathan & Watkins law firm.
In the latest quarterly filing, dated Oct. 6, the fund raised $87,000 and paid $75,000 in legal fees — its lowest raising and spending quarter this year.
Donors are allowed to contribute $10,000 annually to the legal expense fund, far more than they can contribute to a campaign account. Thirty-three current or former U.S. senators have donated to the fund.
In January, the Department of Justice closed its investigation into Burr’s stock sales without filing charges.
The SEC filing lays out a timeline of events leading up the Feb. 13, 2020, stock sales, based on its investigation.
• Burr and his wife communicated regularly with the Fauths via phone in February 2020, and Burr stayed at their home in Alexandria, Virginia, on more than one occasion in early February.
• On Feb. 13, 2020, at 8:54 a.m., Burr used his cell phone to call his broker and directed the broker to sell $1,652,866 worth of stock — all but one of the equities in his and his wife’s joint individual retirement account portfolio. The call lasted nearly 13 minutes.
• At 11:07 a.m., Gerald Fauth, on his cellphone, called Brooke Burr’s cellphone. The call lasted 2 minutes, 36 seconds.
• At 11:32 a.m., Burr called Fauth on his cellphone. The call lasted 50 seconds.
• At 11:33 a.m., Fauth called his broker from his cellphone. He was told the broker was out of the office. The call lasted 1 minute and 6 seconds.
• At 11:35 a.m., Fauth called a second broker from his cellphone and directed the broker to sell several stocks in his wife’s account. The call lasted 24 minutes.
* At 11:38 a.m., Burr’s broker entered trades to sell equities in the IRA accounts of both Burr and his wife.
* At 4:34 p.m., Burr logged into his online brokerage account using an IP address assigned to an account registered to Mary Fauth at the Fauths’ home. The markets close at 4 p.m.
The SEC contends that Burr at the time “possessed material nonpublic information concerning Covid-19 and its potential impact on the U.S. and global economies,” including information he learned from his positions on the Senate intelligence committee, the Senate health committee and through his relationships with former staffers who were directing key aspects of the government’s “preparedness and response to the Covid-19 pandemic.”
Burr has maintained that he made the stock sales based on publicly available information, including media reports.
“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,” said Alice Fisher, an attorney at Latham & Watkins, in a statement to The News & Observer on May 6, 2020.
Gerald Fauth was nominated to the National Mediation Board by President Donald Trump and confirmed by the Senate in 2017. He was renominated by President Joe Biden in 2021. The Senate health committee approved his nomination, but he is awaiting confirmation by the Senate. According to his biography, he has worked on economic, regulatory, public policy and legislative issues related to transportation in the private sector and federal government for more than 40 years.
The SEC subpoenaed documents and testimony from Fauth in May, but has not gotten them, which led to the recent court filings.
McClatchy DC reporter Alex Daugherty contributed to this story from Washington.
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