Sen. Kelly Loeffler and her husband’s firm, which owns the New York Stock Exchange, defended on Friday the propriety of the couple’s sales of up to $3 million worth of stocks after she was privately briefed by federal officials about the coronavirus outbreak.
At the same time, two good-government advocacy groups filed complaints against Loeffler, R-Ga., and other senators, in connection with their sales of stocks after that closed-door briefing on Jan. 24.
“I am very confident that we have followed the letter and spirit of the law,” Loeffler said in an interview on CNBC’s “The Exchange.”
“I had no involvement in the decisions” to trade the stocks, the freshman lawmaker said.
Instead, Loeffler said, those decisions involving nearly 30 trades were made by third-party investment advisors without any input by herself or her husband, Jeff Sprecher, chairman of the NYSE, and chairman and CEO of its holding company, Intercontinental Exchange.
Loeffler did not identify those third-party investment advisors by name after being asked to do so.
“We have no knowledge of these companies” whose stocks were sold and bought, Loeffler said, referring to her and Sprecher.
“I have no discretion over … our portfolio.”
She said the trades were a mix of buys and sells, and that some of the trades were “quite bullish.”
Loeffler’s interview came a day after news reports revealed about nearly 30 trades since late January in accounts owned by her and Sprecher.
On Thursday night, reports said Loeffler and other GOP senators, Intelligence Committee Chairman Richard Burr of North Carolina and Oklahoma’s James Inhofe, along with California Democratic Sen. Dianne Feinstein, dumped shares worth up to $10 million in the weeks after a Jan. 24 private briefing to senators about coronavirus by Trump administration health officials.
The sales occurred before a sharp drop in the stock market indexes in recent weeks as the coronavirus pandemic wreaked havoc on the U.S. economy.
Intercontinental Exchange, which owns other exchanges and clearing houses, said in a statement that the nearly 30 transactions involving the couple were “in compliance” with company policies.
Sen. Kelly Loeffler, R-Ga., her husband Jeffrey Sprecher participate in Loefflers swear-in reenactment for the cameras in the Capitol on Monday, Jan. 6, 2020.
Bill Clark | CQ-Roll Call | Getty Images
“Mr. Sprecher and Senator Loeffler have made clear that those transactions were executed by their financial advisors without Mr. Sprecher’s or Senator Loeffler’s input or direction,” the firm said. “Such transactions are in compliance with Intercontinental Exchange, Inc. policies and procedures.”
“These were not transactions in ICE securities, and any transactions by Mr. Sprecher or Senator Loeffler in ICE securities have been executed through a Rule 10b5-1 trading plan that was approved by Intercontinental Exchange,” the firm said.
“Per ICE policy, all trading plans require a 30-day cooling off period from the time the trading plan is adopted to the date of the first transaction.”
Loeffler reported in a disclosure filing this week a string of stock sales that began on Jan. 24, the same day her Senate committee hosted the closed-door briefing about the spread of the coronavirus by Trump administration officials.
Over the next three weeks, Loeffler and Sprecher sold shares worth $1.25 million to $3.1 million, according to disclosure records.
But on Feb. 14, accounts owned by Loeffler and Sprecher bought stock in Citrix, which provides teleworking software, and in Oracle, the technology company. Many Americans have been working remotely from home as companies closed or reduced staff at their physical offices due to the COVID-19 crisis.
Loeffler’s transactions were first reported Thursday by The Daily Beast. Loeffler’s spokeswoman on Thursday called that story “a ridiculous and baseless attack.”
Despite the statements by Loeffler and Intercontinental Exchange, the controversy over the stock sales by her and the other senators is not likely to go away anytime soon.
The government advocacy group Common Cause said Friday it had filed complaints with the Justice Department, the Securities and Exchange Commission and the Senate Ethics Committee “calling for immediate investigations” of Loeffler, Burr, Feinstein and Inhofe “for possible violations of the STOCK Act and insider trading laws.
The STOCK Act bars members of Congress from using inside information from their official positions for private gain.
Common Cause said the trades by the senators as alleged involved “potentially criminal misconduct.”
“These Senators appear to have used classified intelligence briefings as stock tips and sold off significant holdings to avoid losses in the markets,” said Paul Ryan, Common Cause Vice President for Policy and Litigation.
“These laws are on the books for a good reason, without them the potential to abuse the power of elected office for personal enrichment would be virtually unlimited.”
The federal Securities and Exchange Commission had no immediate comment when contacted by CNBC.
Another group, Citizens for Responsibility and Ethics in Washington, filed a complaint with the Senate Ethics Committee asking for probes of Loeffler and Burr for possible violations of the STOCK Act.
“The job of a U.S. Senator is to serve the American people,” said CREW Executive Director Noah Bookbinder.
“It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty,” Bookbinder said. “They must be immediately investigated.”
Rep. Alexandria Ocasio-Cortez, D-N.Y., called on Burr and Loeffler to resign, tweeting: “It is stomach-churning that the first thoughts these Senators had to a dire & classified #COVID briefing was how to profit off this crisis.”
“They didn’t mobilize to help families, or prep response. They dumped stock,” Ocasio-Cortez wrote.
In a statement Friday, Burr said his decision to off-load his stock was based “solely on public news reports,” including those from CNBC’s Asia bureaus about the spread of coronavirus.
“Understanding the assumption many could make in hindsight however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency,” Burr said.
On Feb. 13, one week before U.S. stocks began sliding, Burr sold more than $500,000 worth of shares in a single day. The sales amounted to 33 individual transactions, and if they totaled the high end of the range that Burr reported, around $1.7 million, that would equal nearly all of his net worth.
Burr’s trades were first reported by ProPublica.
North Carolina’s other U.S. senator, Thom Tillis, who is also a Republican, said on Twitter that, “Given the circumstances, Senator Burr owes North Carolinians an explanation.”
“His self-referral to the Ethics Committee for their review is appropriate, there needs to be a professional and bipartisan inquiry into this matter, which the Ethics Committee can provide,” Tillis said.
– Additional reporting by Christina Wilkie.