As advisors work in overdrive to help clients and keep up with the latest market, economic and tax-related news tied to the coronavirus, they are also taking to social media over news that four senators with exclusive information on COVID-19 made some moves that helped shield their portfolios from the recent turmoil.
Jeff Levine, a CPA, CFP and director of advanced planning at Buckingham Wealth Partners, started the discussion by asking: “Fishy to anyone else that MULTIPLE lawmakers told the public everything was OK + not to worry about #COVID19, at the SAME TIME they were: 1) Receiving classified briefings stating otherwise 2) Dumping stock. Exhibit A: Exhibit B.”
Sen. Kelly Loeffler, R-Ga., and three other senators are taking heat for selling and buying stocks after they received sensitive briefings in late January about the potential impact of the coronavirus. Loeffler and her husband, NYSE Chairman Jeffrey Sprecher, moved to sell stocks like AutoZone, Resideo Technologies and Ross Stores.
At the same time, the Loefflers made investments of $100,000 to $250,000 into Citrix, a teleworking software firm, and in Oracle, according to their disclosures.
Meanwhile, Sen. Richard Burr, R-N.C., and his wife sold about $1.7 million of holdings on Feb. 13. Others senators making recent stock sales before the market downturn include Republicans David Perdue of Georgia and James Inhofe of Oklahoma; the husband of Sen. Dianne Feinstein, D.-Calif., did so, as well.
What to Do?
Several investors and advisors suggested that the senators be prosecuted or kicked out of the Senate. “Unbelievable and should be prosecuted if true,” said Brett Rice in a tweet.
But Paul Miguel, CFP, says not so fast: “Because she bought Citrix the day AFTER earnings when it was up 7%? Lets wait to see.”
Miguel explained further: “I agree keeping her mouth shut on the virus looks terrible, I’m saying I don’t understand how she broke criminal insider trading laws for buying and selling common stocks after earnings news. Many Advisors & CNBC were recommending portfolio shifts on global virus news at time also.”
According to Loeffler, who defended the stock moves on Twitter late Thursday, “This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.”
She added: “As confirmed in the periodic transaction report to Senate Ethics, I was informed of these purchases and sales on Feb. 16, 2020 — three weeks after they were made.”