Two Republican Senators Dumped Stock after early coronavirus briefings

I really don't think it took all that much prescience to guess that the stocks of companies providing teleconferencing services were likely to do better than the broader market (up a whole 2% in the case of Citrix) in an environment where people don't want to meet face to face. This is the sort of thing that people who trade stocks for a living know, and act on. Citrix is a large and well-known company ($2.5 billion revenue), not some well-kept secret.

And just to mention it again, Loeffler and spouse don't trade their own stocks.

CarpeScriptum said:

And just to mention it again, Loeffler and spouse don't trade their own stocks.

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You keep saying this, but how do you know?

I manage money for my parents. The money's in funds, but it would be trivially easy for me to buy and sell individual stocks for them. I'm not in finance, but I've known a lot of people who traded individual stocks (including, when he was healthy, my dad), often because they felt they could do better than the funds could. Sometimes they were right.

So what makes you think these people didn't do, or order, their own trading - or that we shouldn't, at the very least, find out for certain who made the calls on these sales?

lizmonster said:

You keep saying this, but how do you know? . . .So what makes you think these people didn't do, or order, their own trading - or that we shouldn't, at the very least, find out for certain who made the calls on these sales?

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Sure, find out. Look into it. Loeffler has said repeatedly that she and her husband do not make their own trades, and find about about them weeks later. See if that's true. I'm all for investigating. What I'm not for is the snide insinuations in the press that because someone sold stock in the face of impending peril, the fact of which was 100% public information, they have somehow done something wrong. Public service is not a financial suicide pact, and all available information says that this money was being managed independently. That it was managed intelligently should not be viewed as criminal.

Sorry I can't properly quote at the moment - our internet is out, and all of this is over my cell connection, which is VERY slow.

Okay, to just to clarify: your statement that "Loeffler and spouse don't trade their own stocks" is not a statement of verified fact, but is based on your choice to believe Loeffler's public statements.

What I'm not for is the snide insinuations in the press that because someone sold stock in the face of impending peril, the fact of which was 100% public information, they have somehow done something wrong.

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I believe the point that's in dispute is the "100% public information" part of this. It's my understanding that both Senators were privy to a private briefing that emphasized the financial dangers of what was happening, but then spoke with their constituents, downplaying the risk. Is that insider trading? Hard to say without proper investigation, but it's certainly deliberate deception.

Public service is not a financial suicide pact, and all available information says that this money was being managed independently.

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Just repeating to emphasize that "all available information," in this case, are the public statements of people who've been accused. Which doesn't mean they're lies, but they do undercut the weight of the assertion.

lizmonster said:

Okay, to just to clarify: your statement that "Loeffler and spouse don't trade their own stocks" is not a statement of verified fact, but is based on your choice to believe Loeffler's public statements. . . .Just repeating to emphasize that "all available information," in this case, are the public statements of people who've been accused. Which doesn't mean they're lies, but they do undercut the weight of the assertion.

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Well, there is zero evidence to disprove her statements about how her finances are handled, either. The only evidence we have is her verbal statements and a printed list of trades submitted by her to the Senate Ethics Committee, which states that she was advised of these trades significantly after they were made. (It is her making that assertion). Loeffler has been all over the TV talking about this, and there has been time for someone to come forward and contradict it. There will be more time, and of course it's being investigated, so we shall see.

For my part, given what I know about how the world works, I think it is unlikely in the extreme that the President of the New York Stock Exchange, having put his money into a blind trust so that he could hold that incredibly prominent position, and apparently being extremely wealthy, would risk losing his position, livelihood, prestige, etc. by attempting to instruct the blind trust to make trades and just hoping that fact would never, ever leak out.

And please understand what I'm saying here -- I'm talking about attempting to influence any trades at all ever, not just those particular trades at this particular time.

So it's not just what they say, but what I understand about how things work. Circumventing the blind trust wouldn't be quite the same as someone logging into their parents' E*Trade account and doing a few trades on their behalf.

lizmonster said:

It's my understanding that both Senators were privy to a private briefing that emphasized the financial dangers of what was happening, but then spoke with their constituents, downplaying the risk.

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I believe it is only Burr who is accused of that, actually. I addressed that topic at length above, but in brief, comparisons are being made between statements of Burr's that fell three weeks apart, as this virus problem was in the process of accelerating, and everyone's perceptions were changing daily.

As to "private briefings," there seems to be this need to assume that "private" somehow implies the imparting of supersecret information known only to the select few. In my opinion it's more likely that it just means a briefing specifically for Senators that summarizes and presents the best information available at the time. There has been a ton of information available to the general public about all of this for some time, coming out daily. I don't think it has been some sort of mystery, or that there was secret information that these people could act on.

Here, for example, is CNN on the 12th of February:

https://www.cnn.com/asia/live-news/coronavirus-outbreak-02-12-20-intl-hnk/index.html

45,000 infections worldwide, and 1,100 people dead. That should be enough to give one pause about what is happening . . . Burr sold his shares the next day.

CarpeScriptum said:

Well, there is zero evidence to disprove her statements about how her finances are handled, either. The only evidence we have is her verbal statements and a printed list of trades submitted by her to the Senate Ethics Committee, which states that she was advised of these trades significantly after they were made. (It is her making that assertion). Loeffler has been all over the TV talking about this, and there has been time for someone to come forward and contradict it. There will be more time, and of course it's being investigated, so we shall see.

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I believe some well-known liberal said "Trust but verify." We will indeed see, assuming the investigation does go forward.

CarpeScriptum said:

For my part, given what I know about how the world works, I think it is unlikely in the extreme that the President of the New York Stock Exchange, having put his money into a blind trust so that he could hold that incredibly prominent position, and apparently being extremely wealthy, would risk losing his position, livelihood, prestige, etc. by attempting to instruct the blind trust to make trades and just hoping that fact would never, ever leak out.

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For my part, given what I know about how the world works, I can't imagine the President of the New York Stock Exchange believing anything he did, whether merely sketchy or just flat-out illegal, would result in actual real-world consequences. People at his level are almost never substantively punished.

CarpeScriptum said:

So it's not just what they say, but what I understand about how things work. Circumventing the blind trust wouldn't be quite the same as someone logging into their parents' E*Trade account and doing a few trades on their behalf.

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From a procedural perspective, I expect it's much simpler for him to trade than it is for me, but thanks for the observation on my financial competence anyway.

CarpeScriptum said:

As to "private briefings," there seems to be this need to assume that "private" somehow implies the imparting of supersecret information known only to the select few. In my opinion it's more likely that it just means a briefing specifically for Senators that summarizes and presents the best information available at the time. There has been a ton of information available to the general public about all of this for some time, coming out daily. I don't think it has been some sort of mystery, or that there was secret information that these people could act on.

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And here's where it gets fuzzy. There is a massive percentage of the public - most of whom have been funneled into 401ks, if they have anything in the market at all - who don't parse the news this way. If their representative tells them to chill out, it's all fine, they're going to do that. If that representative knew it was unlikely to be fine and traded accordingly - is that insider trading, or just that representative being a jackass? One is punishable by law; the other isn't. I don't know which side of the line either of these individuals fall, but I would indeed like to find out.

There are a lot of assumptions being made here and you all need to realize Members of Congress are exempt from criminal prosecution on certain matters that would send yours and my butts to jail.

The original STOCK Act of 2012 (Stop Trading on Congressional Knowledge Act, Pub.L. 112–105, S. 2038, 126 Stat. 29) would have covered the current scenario but the key provision for criminal prosecution that would have done so was gutted from the final bill.

That leaves only two avenues of recourse:

1. An investigation by the Senate Ethics Committee or the House Committee on Ethics both of which only hold the power to impose a fine if the senator/representative is found guilty. (Burr has requested that investigation.)
2. The voting booth.

If you're interested, you can read the STOCK Act or read this article ("Is it illegal for lawmakers to trade stocks on insider info they learn on the job?"), which is both informative and accurate.

The site's not gonna let me quote it, but just here to point out Liz's 'well-known liberal' joke was pretty funny.

Surprise!

Shareholder suit accuses Sen. Richard Burr of securities fraud
https://www.politico.com/news/2020/03/23/richard-burr-lawsuit-coronavirus-145564

Alan Jacobson, a shareholder in Wyndham Hotels and Resorts, sued Burr in federal court on Monday, alleging that the senator used private information to motivate a mass liquidation of his assets. It is illegal for senators to use nonpublic information in conducting securities exchanges.

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This is one shareholder, not a class action suit. There is not a lot of thrust (trust?) behind this.

-cb

Surprise!

FBI Reaches Out to Sen. Burr Over Stock Sales Before Coronavirus Market Slide
https://time.com/5812843/fbi-senator-richard-burr-stocks-coronavirus/

The outreach suggests federal law enforcement officials may be looking to determine whether the North Carolina Republican exploited advance information when he dumped as much as $1.7 million in stocks in the days before the coronavirus wreaked havoc on the economy.

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-cb

Yeah, this investigation is headed to file 13. There are definitely two justice systems in the US.

http://www.nbcnews.com/politics/congress/justice-department-drops-insider-trading-probes-three-senators-n1215196?cid=sm_npd_nn_fb_ma

Richard Burr will go down because he was disloyal. We might hope he would speak out about the price of selling one's soul, but if I've learned one thing in the era of Dumb Hitler, that's not going to happen.

The US is now well into the heart of the darkest woods, following a well-trod path. We aren't coming out of this without a catastrophic amount of pain and suffering (both physical and to the national psyche), if we come out at all.

ElaineA said:

Richard Burr will go down because he was disloyal. We might hope he would speak out about the price of selling one's soul, but if I've learned one thing in the era of Dumb Hitler, that's not going to happen.

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I’ve seen him called Fat Joffrey, which might be my personal favorite.

It really is amazing how reluctant people he’s thrown under the bus are to say anything bad about him. I get that they fear his base and being primaried by a Trump-picked candidate, but really? None of them has a spine and a bit of pride??

I think they know better than anyone it's much darker than that. We have one jack boot solidly in the fascist state, and no one knows it better than the people he co-opted first. They know the consequences can be far worse than being primaried--people falling out windows and chopped up with chain saws only garners a shrug, you know? The fascist hates the internal traitor worse than the unwashed masses on the outside.

The outsiders are still catching up, still banking on those already-crumbled "norms," still thinking "this can't really happen to us."

darkprincealain said:

I didn’t say her. I said her decision maker(s). Plenty of the time these blind trusts are fine, but I just wonder how blind it is. As well, the republican senators and whoever else decided to dump stock after this briefing or rumor started. I’m not suggesting Feinstein herself did anything wrong. I’m sorry if it looks like I said she did.

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Since this came back up, I wanted to dig into it and make sure it happened like I remember. Having read through it, I still think the disagreement depends on a distinction without a difference, by which I mean that even if she were guilty of something, she wouldn’t be able to be prosecuted as mentioned above. I don’t think the problem is with my word choice or argument here, as much as it does with the reporting of what I read (these stories weren’t fully cooked before being published). Of course, I leave open the possibility that I was just confused, as I tend to get when the stories are this convoluted.

On the hopeful side, last Monday, I had a meeting with my financial guys for my paltry investments. I asked them about the future if Trump does lose the election. They said no worry. They had already started moving funds towards infrastructure building because that is what a Biden Administration would be doing. Now, I am no financial wizard but this seems to me that they see Trump losing. Always before they would say "well, yes he is a psycho nut job but he is good for the market."
Truthfully, I would view a loss in my investments as entertainment money well spent if he lost and the market crashed. This from a retired schoolteacher with a little farm ground. --s6