‘Wyndham, as a hotel chain, obviously stood to lose substantial business as a result of quarantine measures, border closures and substantial reductions in tourism…’
(Joshua Paladino, Liberty Headlines) A federal lawsuit filed Monday accuses Sen. Richard Burr, R-NC, of breaking a law that prohibits members of Congress from benefiting financially from privileged information, WRAL reported.
Congress passed the Stop Trading on Congressional Knowledge Act in 2012. Only three Senators voted against it, and Burr was one of them.
Alan Jacobson, who owns stock in Wyndham Hotels, claims Burr sold about $150,000 of company stocks based on exclusive knowledge of the coming coronavirus outbreak as he simultaneously told the American people not to worry about the nation’s well-being.
He sold the stocks on Feb. 13 at $59 a share.
“Over the next several weeks, Wyndham’s stock dropped precipitously as the market was belatedly informed of the severity of COVID-19, as well as its potential expected impact on the economy,” the lawsuit said. “In particular, Wyndham, as a hotel chain, obviously stood to lose substantial business as a result of quarantine measures, border closures and substantial reductions in tourism.”
Last week, Wyndham Hotels stock dropped to $14.50 per share, though it has since rebounded to $35 per share.
The Trump administration briefed the Senate Intelligence Committee, which Burr chairs, about the new coronavirus on Jan. 24.
By some estimates, Burr sold $1.7 million in stock on Feb. 13.
Sens. Kelly Loeffler, R-Ga., James Inhofe, R-Okla., and Dianne Feinstein, D-Calif., also conspicuously sold stock before the market crash. The four senators are estimated to have sold $11 million in stocks.
Burr denied the allegations in a tweet.
My statement in response to reports about recent financial disclosures: pic.twitter.com/J4kye5a4ok
— Richard Burr (@SenatorBurr) March 20, 2020
The lawsuit calls Burr “a scofflaw in a time of national crisis” and says that he “owed a duty … not to use material nonpublic information that he learned by virtue of his duties as a United States Senator in connection with the sale or purchase of any security.”
Realizing “the assumption many could make in hindsight,” Burr called on the Senate Ethics Committee “to open a complete review of the matter with full transparency.”