02:16 - Source: CNN
Senators faced with scruity over stock sell offs right before market crash
CNN  — 

Republican Sen. Kelly Loeffler of Georgia said Wednesday that she and her husband are divesting from individual stocks amid sharp criticism over trades she and other lawmakers made ahead of the market downturn caused by coronavirus.

Loeffler wrote a Wall Street Journal op-ed Wednesday defending the trades, saying they were made by third-party financial advisers without her knowledge and she had become a “top target of baseless attacks”

But she said she and her husband, Jeffrey Sprecher, who is chairman of the New York Stock Exchange, would nevertheless divest from individual stocks so it would no longer be a distraction amid the work against the coronavirus.

“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,” Loeffler wrote.

“I’m not doing this because I have to,” she added. “I’ve done everything the right way and in compliance with Securities and Exchange Commission regulations, Senate ethics rules and U.S. law. I’m doing it because the issue isn’t worth the distraction. My family’s investment accounts are being used as weapons for an assault on my character at a time when we should all be focused on making our country safe and strong.”

Loeffler, who is up for reelection in November after being sworn in as a senator in January, was one of several lawmakers whose stock trades came under scrutiny following the disclosure of Senate Intelligence Chairman Richard Burr’s stock sales. Burr, a Republican from North Carolina, reported selling shares valued between $628,000 and $1.7 million in a single day in February.

As CNN first reported last week, the FBI is now examining lawmakers’ stock trades made ahead of the market downturn. CNN reported that the FBI, which is working with the Securities and Exchange Commission, has contacted Burr as part of the probe, but Loeffler and other senators had not been contacted.

The lawmakers came under public scrutiny in particular because they were briefed by Trump administration officials on the coronavirus. In addition to briefings for all senators, Burr received information on the outbreak as chairman of the Senate Intelligence Committee. He says his trades were based solely on public reports and not information he received behind closed doors.

Burr asked the Senate Ethics Committee to review his stock sales amid the criticism, but Loeffler has insisted she did nothing wrong. Still, Loeffler’s political opponents – including fellow Georgia Republican Rep. Doug Collins, who is challenging her for her Senate seat in 2020 – pounced on the trades and accused her of profiting off of her new role as a senator.

Loeffler, a former business executive who is reportedly one of the richest senators, said in the op-ed that she and her husband “never used any confidential information I received while performing my Senate duties as a means of making a private profit.”

“As longtime executives at a Fortune 500 financial-services firm, my husband and I put this arrangement in place to insulate ourselves and our colleagues from these sorts of unfounded accusations,” she wrote.

Loeffler and her husband sold 27 stocks valued between $1.275 million and $3.1 million from January 24 through February 14, according to Senate records. They also purchased three stocks at a value of $450,000-$1 million, including shares in Citrix, a software company that’s gained value over the past two months even as the Dow Jones Industrial Average has dropped roughly 20%.

Last week, Loeffler and Sprecher, who is CEO of Intercontinental Exchange, reported purchasing stock options in the company valued between $6 million and $30 million. They then sold their stock options at a value between $11 million and $55 million. The exact value of the stock options sale was $18.6 million, according to the Atlanta Journal-Constitution. Loeffler’s campaign told the paper those sales were prearranged and part of the couple’s compensation package.

In addition, Loeffler and Sprecher sold between $586,000 and $1.7 million in stocks and stock options in late February and March, and purchased between $461,000 and $1.2 million in stocks.

The total value of Loeffler’s stock portfolio is unknown because she has not yet been required to file the Senate’s annual financial disclosure form because she is still a new senator. She said she will report the liquidation in her Senate filings later this month.