The Justice Department has notified Sens. Kelly Loeffler, R-Ga., James Inhofe, R-Okla., and Dianne Feinstein, D-Calif., that it has closed insider trading investigations of their stock sales before the coronavirus pandemic crashed global markets, according to people familiar with the investigation.
The notifications leaves open a Justice Department investigation into Sen. Richard Burr, R-N.C., who earlier this month stepped down as chairman of the Senate Intelligence Committee after FBI agents seized his cellphone and executed a search warrant for his electronic communications.
Loeffler’s office and aides to Feinstein and Inhofe confirmed that the three senators were informed Tuesday afternoon that the Justice Department has ended an inquiry into their stock trades and that neither will be investigated further investigation.
Burr spokeswoman Caitlin Carroll declined to comment.
Aides for Feinstein and Loeffler previously acknowledged that the senators had been in contact with federal law enforcement and denied impropriety. Feinstein had been questioned by FBI agents about stock sales, which she has said were done by her husband and without her knowledge, a spokesperson said. Loeffler’s office acknowledged that she had turned over documents related to stock sales she says she did not actively participate in.
The ongoing investigation of Burr comes as he has fallen out of favor with President Donald Trump and his allies over his handling of the committee’s sweeping, years-long investigation into Russia’s interference in the 2016 U.S. election.
This month, a person familiar with the investigation of Burr and other senators said investigators are examining the timing of Burr’s trades and any communications concerning stock sales that he may have had with his brother-in-law and others. This person cautioned, however, that there are significant legal hurdles to bringing charges in such cases, particularly the Constitution’s “speech or debate” clause, which covers many of the activities of members of Congress.
Legal experts say any case against a sitting lawmaker will have significant challenges, because of prior legal rulings that bar prosecutors from admitting evidence related to lawmaker’s official actions, such as statements by Burr about what and when he knew about the pandemic threat.
Tom Mentzer, a spokesman for Feinstein, said this month that the senator in April was “asked some basic questions by law enforcement about her husband’s stock transactions.” The spokesman said Feinstein “was happy to voluntarily answer those questions to set the record straight and provided additional documents to show she had no involvement in her husband’s transactions.”
Disclosure records show that Feinstein and her husband sold $1.5 million-$6 million worth of stock between Jan. 31 and Feb. 18.
A spokeswoman for Loeffler said she had provided documents and information to the Justice Department, Securities and Exchange Commission, and Senate Ethics Committee “establishing that she and her husband acted entirely appropriately and observed both the letter and the spirit of the law.”
“Today’s clear exoneration by the Department of Justice affirms what Senator Loeffler has said all along – she did nothing wrong,” said spokesman Stephen Lawson.
The SEC was aware of Tuesday’s actions by the Justice Department, a person familiar with the matter said, but the status of its inquiry was unclear.
The Justice Department has been investigating stock trades Burr made since March. The inquiry followed a review of public disclosures, first reported by the Center for Responsive Politics and ProPublica, that showed Burr and his wife sold 33 stocks worth between $628,033 and $1.72 million – including many in sectors hit hard by the pandemic, such as the hotel, restaurant and shipping industries. The Senate Intelligence Committee received numerous coronavirus briefings in the weeks leading up to the February sell-off, according to people familiar with the investigation. Burr’s brother-in-law also sold significant shares in February, ProPublica has reported.
From late February through mid-March, the stock market posted steep declines as the coronavirus reached the United States and states began implementing stay-home orders that hampered or shut down large segments of the American economy.