Republican Sen. Richard Burr wasn’t alone in his suspicious, potentially million-dollar stock dump just ahead of March’s pandemic-induced market crash, as ProPublica reports the North Carolina senator’s brother-in-law also unloaded tens, even hundreds, of thousands of dollars in stock on the very same day. On Feb. 13, Burr, the chairman of the Senate Intelligence Committee, and his wife sold as much as $1.7 million in stocks; the same day, Burr’s brother-in-law, Gerald Fauth, a 2017 Trump administration appointee, sold as much as $280,000, according to financial disclosures. The 2012 STOCK Act makes it illegal for lawmakers to use insider information to trade ahead of the market. Fauth is not bound by the STOCK Act, but could have run afoul of laws prohibiting insider trading. Burr says his sales were made based on public information; Burr’s lawyer says the family’s sales were not coordinated.
Burr was in a unique position as the head of the Senate Intelligence Committee to have access to classified intelligence on the coming threat of the coronavirus. Internal alarms were already going off in the government early in the year, long before the public was attuned to the coming danger and economic chaos. Burr, however, continued to make reassuring public statements in February minimizing the potential impact of the virus, while privately warning business leaders that the pandemic’s damage could be historic. Meanwhile, Burr quietly jettisoned shares in 33 companies valued between $628,000 and $1.7 million. Many of the companies that Burr unloaded would go on to take a serious financial hit, and the timing and circumstances of the sell-off has piqued the interest of the FBI and the Securities and Exchange Commission.
Burr’s brother-in-law, who was not a frequent trader, also curiously dumped stock on Feb. 13, avoiding losses of up to $118,000 according to a financial analysis of the companies’ performance. “On Feb. 13, Fauth or his spouse sold between $15,001 and $50,000 of Altria, the tobacco company; between $50,001 and $100,000 of snack food maker Mondelez International; and between $1,001 and $15,000 of home furnishings retailer Williams-Sonoma,” according to ProPublica. “He also sold stakes in several oil companies, which have been hit particularly hard, including between $15,001 and $50,000 of Chevron; between $1,001 and $15,000 of BP and between $15,001 and $50,000 of Royal Dutch Shell.” The sales—and the potential loss—represent a not insignificant proportion of Fauth’s holdings, which ProPublica pegs at somewhere between $680,000 and $2 million.