Sen. Richard Burr (R-N.C.) (Photo: Diego M. Radzinschi/ALM)

The Justice Department is looking into stock sales and purchases made by several senators before the recent market drop and after they received sensitive briefings about the potential impact of the coronavirus, according to a CNN report.

The DOJ is working with the Securities and Exchange Commission on the investigation, and the FBI has contacted at least one lawmaker, Sen. Richard Burr, R-N.C., about the trades, one of CNN’s two sources said.

The Wall Street Journal also reported the investigation Monday afternoon, citing “a person familiar with the matter.”

Investors and others are concerned that some politicians appear to have profited from sensitive information obtained in private briefings — aka insider trading.  (Disclosure documents for Burr and others can be viewed online by the public.)

Burr, head of the Senate Intelligence Committee, said he sold $628,000 and $1.7 million in stocks in mid-February based on public news and asked the Senate Ethics Committee last month to look over the trades given “the assumption many could make in hindsight.”

The sales may not have broken any laws or Senate rules (found in the Stock Act of 2012), and it is common for the FBI and SEC to review stock trades when they are called into question, CNN’s report explained.

Burr’s lawyer, Alice Fisher, told the network Sunday in a statement that he “welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”

Burr’s committee was not briefed on the virus the week he sold stock, one source told CNN, though the senator has been briefed periodically on the coronavirus.

The DOJ, SEC and FBI all declined to comment about the matter, according to CNN.

SEC Warning

SEC Chairman Jay Clayton would not confirm the inquiry early Monday during a live interview on CNBC.

He did warn: “Anyone who is privy to private information about a company or about markets needs to be cautious about how they use that private information. That’s fundamental to our securities laws and that applies to government employees, public officials, etc., and the Stock Act codifies that.”

Loeffler’s Trades

Sen. Kelly Loeffler, R-Ga., and her husband Jeffey Sprecher — who is chairman of the New York Stock Exchange — sold stocks like AutoZone, Resideo Technologies and Ross Stores. 

At the same time, the couple made investments of $100,000 to $250,000 in Citrix, a teleworking software firm, and in Oracle, according to their disclosures.

Other senators who sold stocks 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.

Disclosures made by Feinstein include those tied to a blind trust, while those of the other senators — including Loeffler and Burr — do not. (The Senate’s disclosure website includes blind trust and other documents.)

— Check out Senators’ Stock Sales After Virus Briefings Spark Advisor Debate on ThinkAdvisor.