Sen. Kelly Loeffler (R-GA) benefited from stock trades worth millions of dollars shortly before the general public was alerted to the severity of the Covid-19 crisis, selling off shares in industries that have been adversely affected by the coronavirus pandemic and buying shares of companies that have benefited, according to an Atlanta Journal-Constitution (AJC) report published late Tuesday.

Loeffler, who sits on the Senate Health Committee, first began selling stocks on January 24 — the same day that committee held a private all-members session on Covid-19 — and continued making trades in late February and early March.

According to her latest financial disclosure, which the senator provided to the AJC, her largest transaction involved the sale of $18.7 million in Intercontinental Exchange stock in three separate deals dated February 26 and March 11. Intercontinental Exchange operates global exchanges for several financial and commodity markets — and since Loeffler made her first sale, its stock has fallen by 16 percent.

When challenged over the trades following prior reporting by the Daily Beast, Loeffler said the transactions were handled by an third-party advisors, given that she is an elected official and her husband, Jeffrey Sprecher, is chairman of the New York Stock Exchange and chairman and CEO of its holding company, Intercontinental Exchange.

Additionally, a spokesperson for the senator told the AJC that the sell-offs were pre-planned in order to pay taxes, cover transaction costs, and produce “liquidity.”

Raising questions, however, is the fact that beyond Intercontinental Exchange, the couple also sold stock from other companies ultimately affected by the coronavirus, including a combined $155,000 or so from retailers Ross Stores, TJX Cos. (the parent corporation for T.J. Maxx and Marshalls), and upscale athletic-apparel company Lululemon over the same period of time.

And as Loeffler and Sprecher made those sales, a number of stocks added to their portfolio have seen gains as the Covid-19 crisis deepens. For instance, the couple obtained $206,777 in shares of chemical giant Dupont, which produces critical protective gear to combat transmission of the virus, in four separate transactions in late February and early March. They also acquired shares in telecommuting company Citrix on January 24 — again, the same day the Senate Health Committee held a private meeting about the coronavirus.

Four days after the briefing (and her acquisition of Citrix stocks), Loeffler accused Democrats of misleading the American public about the Trump administration’s response to the outbreak for political gain.

On March 19, Loeffler responded to the allegations in a statement on Twitter. “As confirmed in the periodic transaction report to Senate Ethics, I was informed of these purchases and sales on February 16, 2020—three weeks after they were made,” she said.

The trades have garnered attention due to both their timing and Loeffler’s public assurances that the Trump administration had the coronavirus situation well in hand. But Loeffler isn’t the only lawmaker to have faced questions over recent stock trading.

Lawmakers are barred from insider trading, but it’s difficult to prove

Government officials and lawmakers are often privy to key information — which could potentially be used to profit in the stock market — that isn’t available to the public. In mid-January, former Rep. Chris Collins (R-NY) was convicted of using his position to engage in insider trading and was sentenced to 26 months in prison.

After learning that a drug made by an Australian biotech firm had failed in clinical trials, Collins warned his son in a phone call he made from the White House — after which his son, his son’s fiancée, her parents, and others sold their stock in the company ahead of the test results being made public, according to CNBC.

Many other lawmakers, including former Georgia representative and Health and Human Services secretary Tom Price have been accused of insider trading but were never convicted. Insider trading is often difficult to prove because there aren’t often clear tracks left from the crime, and prosecutors must prove that traders knowingly used inside information.

Members of Congress are barred from engaging in insider trading under the STOCK Act, as explained by Vox’s Ella Nilsen:

The bipartisan act was signed into law by President Barack Obama in 2012, after it became clear some members of Congress were using the classified information they were getting in briefings to get personally wealthy. Burr was one of just three senators at the time to vote against it.

“Any insider trading investigation involving the Stock Act will likely focus on did the member of Congress obtain ‘material’ ‘non-public’ information during the course of his or her official duties, did the member place the trades or cause the trades to be placed, or, alternatively, were the trades done through a blind trust with zero involvement by the member,” [Robert Long, a former senior attorney at the US Securities and Exchange Commission] told Vox.

Initially, the Stock Act had two major provisions. In addition to banning insider trading, it also beefed up transparency rules designed to require financial disclosures be posted online in searchable databases.

But just as the Stock Act was signed into law with lots of pomp and circumstance in April 2012, it was quietly defanged — with the searchable financial disclosures stripped out — about a year later. Members of Congress quietly passed that bill by unanimous consent, and Obama signed it into law.

Along with Loeffler, several other lawmakers, such as Sens. Richard Burr (R-NC), Jim Inhofe (R-OK), and Dianne Feinstein (D-CA) have been accused of engaging in potentially suspicious trading activity related to the pandemic, though all deny having done so. Burr himself asked for a Senate Ethics Committee investigation into his trading activity.

The Department of Justice, in conjunction with the Securities and Exchange Commission have begun an investigation into lawmakers who may have tried to profit off of inside information about the pandemic. The DOJ has yet to specify which members of Congress were under investigation.

It’s entirely possible that the trades were innocuous, but people’s nerves are frayed from dealing with the coronavirus pandemic itself as well as the resulting economic crash. The investigations will take time, and again, insider trading is difficult to prove. But even if all the lawmakers facing questions are cleared of wrongdoing, the situation may give additional weight to reforms being pushed by some of their colleagues.

For instance, Sen. Elizabeth Warren (D-MA) introduced wide-ranging anti-corruption legislation in 2018 which would have banned lawmakers from owning individual stocks altogether. And HR 1, which passed the House last year but has stalled in the Senate, would have tightened rules around lawmaker conflicts of interest, though it doesn’t specifically mention insider trading.

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