Burr: Probe over, no action Burr: SEC ends insider trading investigation with no action

Retired U.S. Sen. Richard Burr said Friday that the Securities and Exchange Commission has taken no action against him involving an insider-trading investigation related to February 2020 stock trades and the COVID-19 pandemic.

The Winston-Salem Republican released a brief statement that the SEC informed him of its conclusion this week.

"I am glad to have this matter in the rearview mirror as I begin my retirement from the Senate following nearly three decades of public service," Burr said.

The SEC launched an investigation on March 25, 2020 of the stock sales by Burr and his wife, Brooke, particularly on Feb. 13, 2020

According to SEC filings, at the time of the Feb. 13, 2020, stock sales, Burr "possessed material nonpublic information concerning COVID-19 and its potential impact on the U.S. and global economies."

U.S. Senate financial-disclosure documents show the Burrs sold between $628,000 and $1.72 million of their stock holdings in 33 separate transactions on Feb. 13, 2020.

The sales included shares of three corporations in the hotel and hospitality industry, which was hammered economically during the early months of the pandemic.

Burr's lawyer in the investigation, Alice Fisher of the Washington law firm Latham & Watkins LLP, said in the statement that "we have believed all along that this is the right result."

The SEC could not be immediately reached for comment Friday on Burr's statement.

It is likely the agency will not comment, similar to how the U.S. Justice Department left it to Burr and his lawyer to disclose on Jan. 19, 2021, that the federal law enforcement investigation into the stock sales had been completed without any insider-trading charges filed.

The Feb. 13 stock sales by Burr and his wife occurred six days after Burr co-wrote an op-ed piece saying America had tools in place to combat COVID-19.

Burr's comments carried significant weight in part because he is an author of the federal Pandemic All-Hazards Preparedness Act of 2006.

"This development shouldn't surprise us," said Mitch Kokai, senior policy analyst with conservative think tank John Locke Foundation.

"The SEC's questions about Richard Burr dealt with potential abuse of his role as a U.S. senator.

"Now that he longer holds that position, the agency likely determined that it would be unwise to continue focusing resources on this case."

STOCK Act

A central question of the SEC investigation into Burr is whether he violated the STOCK Act.

The STOCK Act, passed by Congress in 2012, prohibits federal lawmakers from using nonpublic information derived from their positions for their personal benefit. U.S. senators are required to submit periodic financial disclosures.

The SEC said Burr's information was obtained from his leadership roles on Senate committees "and from certain former staffers that were then directing key aspects of the U.S. Government's preparedness and response to the COVID-19 pandemic."

Five more U.S. senators also were cited for conducting stock sales before Feb. 20. They were Republican senators Kelly Loeffler of Georgia, Jim Inhofe of Oklahoma, David Perdue of Georgia, and Ron Johnson of Wisconsin, and Democratic Sen. Dianne Feinstein of California.

Some of those senators joined Burr in attending a joint Jan. 24, 2020, Senate Health and Foreign Relations committee briefing on coronavirus that included the director of the federal Centers of Disease Control and Prevention and Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, who has become the health care public face for the pandemic.

In May 2020, multiple media outlets reported Tuesday that Justice officials had informed Feinstein, Inhofe and Loeffler that investigations into their stock transactions have been closed.

That left Burr as the only U.S. senator still under investigation.

Burr's statements

A Federal Bureau of Investigation search warrant of Burr's cellphone cited Burr's Feb. 7, 2020, co-authored article on the pandemic with former U.S. Sen. Lamar Alexander, R-Tenn., on FoxNews.com.

The senators discussed the potential initial ramifications of the pandemic and cited their confidence in U.S. public-health preparedness.

The search warrant listed conversations that Burr had on March 17, 2020, after he had been giving a heads-up that media reports were being readied, foremost by NPR, related to the Feb. 13, 2020, stock sales.

The search warrant also featured Burr's statements to members of the Tar Heel Club in D.C. on Feb. 27, 2020, in which he warned about the widespread impact of the coming pandemic, and other public statements on the pandemic.

One key statement cited in a recording of the presentation has Burr saying, "There's one thing I can tell you about this: It is much more aggressive in its transmissions that anything we have seen in recent history. It's probably more akin to the 1918 pandemic."

Burr warned the private group on the same day that President Donald Trump publicly downplayed the virus.

After initially downplaying the NPR subsequent media reports, Burr issued on March 20, 2020, his public statement that his Feb. 13, 2020, stock trades were based primarily on "CNBC's daily health and science reporting out of its Asia bureaus."

According to the search warrant, "Senator Burr did not specifically reference any briefings or information he received in his capacity as a Member of Congress. (The unidentified individual) did not recall Burr mentioning CNBC during the conversation."

Burr and brother-in-law

The SEC's investigation into Burr's pre-pandemic stock trading has a sharp focus on Burr's conversations with brother-in-law Gerald Fauth on Feb. 13, 2020.

The SEC said Fauth's testimony "is critical" to its investigation.

That was the day the SEC says Burr and his wife "liquidated virtually all the stock" in their portfolio. The stock sold was valued at $1.65 million.

The publication Roll Call listed Richard Burr's net worth at $1.7 million as of 2018.

Shortly after a 50-second phone conversation between Burr and Fauth ended on Feb. 13, 2020, the SEC said Fauth called his stockbroker and sold between $97,000 and $280,000 worth of shares in six companies. That amount is according to a federal Public Financial Disclosure Act filing made by Fauth.

ProPublica and other media sources have reported Fauth sold major stock holdings on the same day as Burr.

"But it was previously unknown that Burr and Fauth spoke that day, and that their contact came just before Fauth began the process of dumping stock himself," ProPublica reported Oct. 28.

The stock Fauth sold involved Mondelez International Inc., a confectionery, food, holding and beverage company; Altria Group Inc., parent of tobacco manufacturer Philip Morris USA; Chevron Corp.; Royal Dutch Shell (B stock); BP (British Petroleum) PLC; and Williams-Sonoma Inc.

There was no overlap of the stocks sold Feb. 13 by the Burrs and Fauth. The Burrs bought stock in Mondelez in 2013 and sold it in 2015.

In May 2020, Fisher said in a statement that "Senator Burr participated in the stock market based on public information and he did not coordinate his decision to trade on Feb. 13 with Mr. Fauth."

In November 2021, after 17 months of not cooperating, Burr's brother-in-law agreed to respond to an SEC investigative subpoena. The results of that interview have not been made public.

Burr's cellphone

Burr's office could not be immediately reached for comment on whether the conclusion of the SEC investigation ends all of his legal issues.

Citing an anonymous law-enforcement source, the Los Angeles Times was the first to report in May 2020 that FBI agents came to Burr's home in the Washington area with a search warrant to seize Burr's cellphone.

In May 2021, a federal judge denied two requests to unseal records related to the cellphone seizure filed by the L.A. Times.

However, in September 2022 it was disclosed that Burr and his wife, Brooke, avoided a loss of at least $87,000 "as a result of well-timed stock sales" in February 2020 and profited by at least $164,000, according to the releasing of a less-redacted version of a federal court filing.

According to the search warrant: "Senator Burr explained that he was uncomfortable with a lot of things in the market and other things generally happening around the world; that Burr discussed the fact that there had been a long bull market and that it was due for a correction; and that the surge of (U.S. Sen.) Bernie Sanders in the Democratic party's nomination process was a risk to the market."

Burr also cited that he was concerned about how COVID-19 "could affect the stock market, and that it was an epidemic in China. Senator Burr also discussed supply chains and the fact that U.S. companies depended on Chinese suppliers."

"I believe probable cause exists that Senator Burr used material, non-public information regarding the impact that COVID-19 would have on the economy, and that he gained that information by virtue of his position as a member of Congress," according to the search warrant.

Political criticisms?

In the early months of the federal investigations into the Burr's stock sale, the senator faced criticism coming from both parties focused on the stock sales and Burr's private donor warning.

Wayne Goodwin, then-chairman of the N.C. Democratic Party, said in a May 2020 statement that "as the criminal investigation into Senator Burr escalates, it's clear that he can no longer try to sweep his apparent illegal trading under the rug."

"If he has any sense of decency left, Burr will resign immediately, and if they have any regard for the rule of law, Republicans across this state and all over our country will demand the same."

Sen. Thom Tillis, R-N.C., said repeatedly, that Burr owed North Carolinians an explanation for the stock sales, including involving Senate Ethics committee in that investigation.

By contrast, the criticism coming from the Republican and right-leaning pundits appears more directed at Burr not being sufficiently loyal to President Donald Trump.

The foremost example cited is Burr's role in the Senate Intelligence committee's investigation into Russia's actions in the 2016 presidential election.

For example, CNN reported in May 2020 that Burr and Donald Trump Jr. had reached an impasse on Burr's approval of a subpoena to get the president's son to answer more questions about a June 2016 Trump Tower meeting and the pursuit of a Trump Tower Moscow project.

Although Intelligence committee vice chairman Sen. Mark Warner, D-Va., also signed off on the subpoena, Burr was the first Republican member of Congress to subpoena a member of Trump's family.

Among the most vocal voices calling for Burr to step down is outspoken U.S. Rep. Matt Gaetz, R-Fla., one of the president's fiercest defenders.

Left-leaning groups and never-Trump Republican advocates have said since the Burr controversies erupted that Gaetz has been trying to force Burr's removal as Senate Intelligence chairman as payback for Burr's chairman role.

Gaetz has tweeted "Worth noting that Chairman Burr was swampily complicit in dragging an innocent @DonaldJTrumpJr before Senate Intel time & time again."

There also was talk before and after Burr's decision to step down as Senate Intelligence chairman claiming the FBI action as another example of the weaponizing of the Justice Department in Trump's favor by U.S. Attorney General William Barr.

"A lot more is needed to develop the record, but I do think this is a moment to be seriously on guard for DOJ being used to carry out political retribution," tweeted Susan Hennessey, executive editor at Lawfare and a CNN national security and legal analyst.

"Serving a warrant on a senator is a very significant and rapid escalation, and Trump has long had an axe to grind with Burr."

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