According to a new filing from the Securities and Exchange Commission, then-Senate Intelligence Committee chair Sen. Richard Burr (R-N.C.) and his brother-in-law Gerald Fauth spoke on the phone almost immediately before both men sold stock ahead of the coronavirus-driven market crash in March of 2020, ProPublica reports.
The men talked for 50 seconds, then hung up. "The very next minute," writes ProPublica, Fauth called his broker. The SEC believes Burr, who dumped over $1.6 million in stocks that week in February 2020, had "material nonpublic information regarding the incoming economic impact of coronavirus." Lawmakers are prohibited from trading on nonpublic information they're only privy to because of their position in Congress, explains CNBC.
It had been previously reported that Fauth and Burr dumped stock the same day; it was unknown, however, that the in-laws spoke that day and that their contact preceeded the stock sales under investigation by the SEC, writes ProPublica. The SEC's filings also allege "for the first time" that Burr used nonpublic information about the impending COVID-19 crisis to his advantage.
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Fauth is chairmain of the National Mediation Board, "an agency that facilitates labor-management relations in the U.S. railroad and airline industries," writes CNBC. After speaking with Burr, Fauth reportedly called two different stockbrokers, then "sold between $97,000 and $280,000 worth of shares in six companies — including several that were hit particularly hard in the market swoon and economic downturn," according to ProPublica.
The SEC's ongoing probe is focused on the timing of trades made by lawmakers in February 2020, after Burr and other members of Congress were briefed on the coronavirus, per CNBC. Burr said previously that he only used public information to inform his trades. Federal prosecutors had also previously decided not to charge him. Read more at ProPublica.
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