Sen. Kelly Loeffler announced Wednesday that she will unload all her family’s individual securities after facing intense scrutiny of her trades after receiving a private coronavirus briefing.
The Georgia Republican, who is married to New York Stock Exchange Chairman Jeffrey Sprecher, maintained in a Wall Street Journal opinion piece that she never profited from confidential information gleaned through her official capacity. Loeffler said she doesn’t direct trading decisions and that her family’s investments are managed by third-party advisers at financial services companies, including Morgan Stanley and Goldman Sachs.
But those who outsource their money management through a blind trust, or a third party, can still influence that management by letting investment advisers know, for example, that a bailout to a certain industry is imminent.
“Although Senate ethics rules don’t require it, my husband and I are liquidating our holdings in managed accounts and moving into exchange-traded funds and mutual funds,” she said. “I will report these exiting transactions in the periodic transaction report I file later this month.”
This means she will still hold assets that are made up of several companies but won’t hold individual company stocks, for instance.
Loeffler started selling her jointly held assets on Jan. 24, the same day White House officials briefed the Senate Health, Education, Labor and Pensions Committee about the novel coronavirus. Loeffler then sold more than $1 million in stock, according to The Daily Beast. Millions more in her stock sales emerged, according to a report by The Atlanta Journal-Constitution.
Loeffler cast blame on the media for improperly focusing on her trading history and said the briefing did not supply her with any material, nonpublic information — a standard that could have exposed her to a charge of insider trading.
“In its hunger to place blame, the media fixated on a fantasy of improper congressional trading, stemming from a Jan. 24 briefing I and other Senators attended with health officials,” Loeffler wrote. “But based on contemporaneous reporting and public statements by the officials who provided the briefing, there was no material or nonpublic information discussed. All we did was meet public health leaders and ask them questions about the emerging virus.”
Loeffler was appointed to the Senate by Georgia’s governor in January after Sen. Johnny Isakson resigned, citing health reasons. She is running in a special election to fill the remainder of Isakson’s term and faces a challenge from Rep. Doug Collins in the Nov. 3 GOP primary.
Loeffler had been required to file a report disclosing all of her and Sprecher’s financial assets by Feb. 5, but she requested and was granted an extension to file that report by May 5.
Craig Holman, government affairs lobbyist at the ethics advocacy group Public Citizen, said that while Loeffler’s divestiture was prudent, it comes too late.
“Loeffler saved tens of millions of dollars in losses when she dumped her stock after a confidential briefing on the pending pandemic,” Holman said. “It is what she did, not what she plans to do in the future, for which she must answer.”
Intelligence Chairman Richard M. Burr has also faced questions about stock trades he made prior to a sharp market downturn caused by the virus. He asked for an investigation by the Senate’s Ethics Committee, and the Department of Justice has also sought information about the trades.
A spokesperson for Burr’s lawyer, Alice Fisher, had no comment on Loeffler’s divestiture decision. Burr, a Republican from North Carolina, is in the fourth year of the six-year term he won with 51 percent of the vote in 2016.