A shareholder at one of the companies Sen. Richard Burr sold stock from in the weeks before the coronavirus pandemic rocked the U.S. is suing the senator, alleging the top Republican committed securities fraud by “exploiting material information unavailable to the public.”
The complaint, filed Monday evening in the U.S. District Court for the District of Columbia by attorneys with the litigation boutique Browne George Ross, alleges that Burr “has acted as a scofflaw in a time of national crisis.”
The attorneys represent Alan Jacobson, a shareholder for Wyndham Hotels & Resorts, one of the companies Burr and his wife sold stock from on Feb. 13. The suit claims Burr used the information he learned in private briefings on the COVID-19 virus to sell off the stocks.
“In so doing, he injured shareholders—including Plaintiff Alan D. Jacobson—who purchased and/or continued to hold securities in those same companies,” the complaint reads.
“Plaintiff’s ability to procure relief in the federal courts is unimpaired by the fact that Senator Burr is a Member of the U.S. Senate, where in his capacity as Chairman of the Senate Intelligence Committee he learned the nonpublic material information on which he based his stock trades,” it continues.
The suit was filed by Browne George Ross partners Eric George and Thomas O’Brien. O’Brien was previously the U.S. attorney for the Central District of California, and spent two years in the office as head of the criminal division.
George previously spent a year as a counsel to the Senate Judiciary Committee, from 1999 to 2000.
ProPublica reported last week that Burr sold about $1.7 million worth of stock on Feb. 13, as the chairman of the Senate Intelligence Committee reportedly received daily briefings about the coronavirus pandemic that had yet to fully impact the U.S.
Burr maintained that he relied “solely on public news reports” in deciding to sell off the stocks, and on Friday asked the Senate Ethics Committee to review his stock sales.
Monday’s lawsuit alleges that Burr’s stock sales violate the Securities and Exchange Act and the Stop Trading on Congressional Knowledge Act of 2012.