Senator Sued Over Stock Sales After Virus Briefing

Monday's lawsuit alleges that Burr's stock sales violate the Securities and Exchange Act and the Stop Trading on Congressional Knowledge Act of 2012.

"While members of the public, including plaintiff, were being told by the United States government, including by Senator Burr, that the United States was prepared to face emerging public health threats like the coronavirus and that COVID-19 would not have a significant impact on the economy, Senator Burr was in possession of material nonpublic information to the contrary," the lawsuit reads.

The complaint focuses on the Wyndham stocks, which have lost two-thirds of their market value since Feb. 13. The hospitality industry is experiencing steep losses during the pandemic, as fewer people travel and groups cancel conferences that typically use those facilities.

"On February 13, 2020, the day that Senator Burr and his wife dumped $150,000 of Wyndham stock, Wyndham's stock traded at a high of $59.37," the complaint reads.

"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. 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," it explains.

Earlier Remarks

The lawsuit also highlights public and private remarks that Burr made about the incoming impact of the coronavirus pandemic, including comments he made to a small group on Feb. 27, revealed in reporting by NPR.

"There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," Burr said at the time. "It is probably more akin to the 1918 pandemic."

"Senator Burr's knowledge of the devastating impact of COVID-19 on the United States, the mitigation measures that would be taken in efforts to curtail its spread, and the coming hit to the economy is evident not only by the fact that he received confidential briefings on COVID-19 and then sold all of the shares he held in the stock market but by comments he made to a small group of private investors," Monday's complaint reads.

Jacobson and his attorneys are seeking compensatory damages from Burr, as well as litigation costs and expenses and "such other and further relief as this court deems just and appropriate."

Read more here:

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