ProPublica has been following a case of alleged insider trading involving Republican Senator Richard Burr of North Carolina since last spring when they revealed Burr and his brother-in-law each dumped stocks within minutes of speaking on the phone regarding the impending market crash in February. Burr is said to have sold $1.6 million worth of stocks according to filings from the Securities and Exchange Commission (SEC).
Burr’s brother-in-law, Gerald Fauth, a Trump appointee who still has a post on the National Mediation Board, sold between $97,000 and $280,000 worth of shares in six companies, including several that had been hit particularly hard in the market in the wake of uncertainty surrounding the still relatively new Coronavirus pandemic. Donald Trump appointed Fauth to the three-person board, a federal agency that facilitates labor-management relations within the nation’s railroad and airline industries. President Joe Biden reappointed him to the board.After Burr and Fauth spoke for all of 50 seconds, Fauth then called his broker. Burr, according to the SEC, had “material nonpublic information” regarding the incoming economic impact of coronavirus. The week after the trades, the market began its crash, falling by more than 30% in the subsequent month.
When we broke this story last year, Burr's attorney told us Burr "did not coordinate his decision to trade on Feb. 13 with Mr. Fauth.”
Now we know Burr called Fauth after the trades, and Fauth called his broker the very next minute.
What did Burr say?https://t.co/EiXjZ4oPS4
— Robert Faturechi (@RobertFaturechi) October 28, 2021
In the filings, the SEC also revealed that there is an ongoing insider trading investigation into both Burr and Fauth’s trades. The revelations come as part of an effort by the SEC to force Fauth to comply with a subpoena that the agency said he has stonewalled for more than a year, and which was filed not long after ProPublica’s story.
Burr calls his broker at 8:54 am 8/13/20, directing the sale $1.65M in stock.
At 11:32 am Burr called Fauth for 50 seconds.
At 11:33 am Fauth calls a broker- couldn't reach them.
At 11:35 am he calls a 2nd broker, tells her to "sell several stocks in his wife's account."
— Ted Corcoran (RedTRaccoon) (@RedTRaccoon) October 28, 2021
According to the SEC, Fauth has cited a medical condition for why he cannot comply with the subpoena, even as he has been healthy enough to continue his duties at the National Mediation Board. In its filings, the SEC accuses Fauth of engaging in “a relentless battle” to dodge the subpoena.
The SEC is running an insider trading investigation against Senator Richard Burr of North Carolina and his brother-in-law, Gerald Fauth. They both dumped stock based on nonpublic information.
Do you really not wonder how there are so many millionaires in Congress?#StockMarket
— Bobby Martin (@BobbyM62) October 28, 2021
Read ProPublica’s full report here.