SEC probes possible insider stock trades by Sen. Richard Burr, relative

Senator Richard Burr, a Republican of North Carolina and a ranking member of the Senate Health, Education, Work, and Pensions Committee, speaks during a confirmation hearing in Washington, D.C., Thursday, April 29, 2021.

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The Securities and Exchange Commission said North Carolina Senator Richard Burr and his son-in-law, who is the head of an independent federal agency, spoke by phone shortly before the two men sold shares weeks before the 2020 national COVID shutdown.

The filing comes as the Securities and Exchange Commission continues to investigate whether Burr, a Republican, and his son-in-law Gerald Voth sold shares on the basis of immaterial information Burr obtained as part of his job.

Members of Congress are prohibited from circulating non-public information they receive as a result of their positions as legislators.

Voth is chair of the National Mediation Board, an agency that facilitates business and management relationships in the US rail and aviation industries. He is also the “brother of Senator Burr’s wife, Brock Burr,” Securities and Exchange Commission filing notes.

The Securities and Exchange Commission’s investigation focuses on the timing of trading in February 2020, after Burr and other lawmakers were briefed about the risk of the coronavirus pandemic spreading to the United States.

After a week of selling shares by Burr and his son-in-law, stock markets began to plummet over fear that the pandemic could cripple the global economy. The Dow Jones Industrial Average lost 30% of its value in the weeks following the Borough trade.

“I relied solely on public news reports to guide my decision on selling the stock,” Burr said in March 2020. “Specifically, I closely followed CNBC’s daily health and science reporting from its Asia offices at the time,” he added.

The FBI confiscated Burr’s phone in May 2020 as part of a criminal investigation into the trades. This move led to Burr stepping down as Chairman of the Senate Intelligence Committee. On January 19, the day before Joe Biden was inaugurated as president, Burr announced that the Justice Department had informed him that it had closed its investigation without criminal charges being brought against him.

The Securities and Exchange Commission, whose investigation is civil in nature, said in a new filing that Burr, at 8:45 a.m. on February 13, 2020, called his broker to sell more than $1.65 million worth of stock, “all but one of the shares in his retirement account.” Common singles for him and his wife…a purse.”

At 11:32 a.m. that morning, Burr called his Fauth cell phone, according to a filing in US District Court in Manhattan. The call lasted 50 seconds.

Gerald Voth

Source: Wikipedia

It’s 11:33 a.m. A minute or less later, Fauth, the head of the National Brokerage Board, called the primary stockbroker’s landline, the SEC said.

Revealing the deposit, after failing to reach his first broker, he called the second broker within two minutes and “ordered her to sell several shares in his wife’s account.”

Voth “sold between $97,000 and $280,000 of stock in six companies — including several that have been hit hard by the market and economic downturn,” according to ProPublica, which reported the suit to court.

Minutes later, in accordance with Burr’s own instructions earlier that morning, “the senator’s broker entered into deals to sell shares in the IRA accounts of both Senator Burr and his wife,” according to the filing.

The SEC filing seeks a judge’s warrant that would compel Fauth to comply with the investigation’s subpoena issued in March 2020. The subpoena seeks documents, other evidence and Futh’s testimony.

The lawsuit file notes that Voth and his attorneys denied the subpoena.

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The SEC said in its filing, “Among other matters, the Commission is investigating whether Senator Richard Burr … sold shares on the basis of material undisclosed information on February 13, 2020, in violation of federal securities laws, including shares .Act, a law passed by the US Congress in 2012 to prohibit its members from using non-public information derived from their office for personal benefit.”

“The committee is also investigating whether [Fauth] And his wife, Mary Foth, sold the securities on the same day on the basis of material nonpublic information that Senator Burr had given them in violation of his duties.”

A spokesman for Burr and Foth’s lawyer did not immediately respond to requests for comment.


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