U.S. Sen. Dianne Feinstein (D-San Francisco) and three of her colleagues face ethics complaints after reports that they sold off stocks worth millions of dollars days before the coronavirus pandemic crashed the stock market.
Feinstein has denied wrongdoing.
However, Good government advocacy group Common Cause today filed complaints with the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Senate Ethics Committee calling for immediate investigations of Feinstein and Sens. Richard Burr, Kelly Loeffler, and James Inhofe for possible insider trading.
According to media reports, each of accused were warned in classified briefings of the potentially catastrophic impact of the COVID-19 outbreak and proceeded to dump signifiant amounts of stock ranging from hundreds of thousands to millions of dollars.
Feinstein, ranking member of the Senate Judiciary Committee, and her husband sold between $1.5 million and $6 million in stock in Allogene Therapeutics from Jan. 31 to Feb. 18, according to the New York Times. And all three senators reportedly made all of the trades well before the coronavirus pandemic triggered the stock market collapse.
After he jettisoned his own stock and while President Donald Trump was still downplaying the encroaching pandemic, Burr warned a Feb. 27 gathering of constituents and donors about the dire financial impact of the COVID-19 public health crisis. In a recording of the event obtained by NPR, Burr compares the novel coronavirus to the 1918 Spanish Flu pandemic that killed an estimated 50 million to 100 million worldwide.
The STOCK Act extends insider trading restrictions to members of Congress, prohibiting them from using non-public information derived from their positions for personal gain. As for the Securities and Exchange Act, the law bans use of “any manipulative or deceptive device or contrivance” in connection with buying or selling stocks. Meanwhile SEC rules bar “any manipulative or deceptive device or contrivance” and “any device, scheme, or artifice to defraud” involving a stock trade.
“The American people expect and deserve leaders who look after the interests of the people before their own personal interests,” Common Cause President Karen Hobert Flynn said in a news release emailed to reporters Friday. “These potential violations of insider trading laws and the STOCK Act by these senators, outlined in widespread media reports, show what appears to be contempt for the law and further a contempt for the American people these senators have sworn to serve. Situations like these are exactly why Common Cause fought to help pass the STOCK Act, to prevent government officials abusing their power for their personal profit.”