A newly filed lawsuit in federal court alleges Sen. Richard Burr (R-NC) may have committed securities fraud by selling upwards of $1.72 million in stock before the coronavirus pandemic reached its height in February.
Politico reported on Tuesday a shareholder of Wyndham Hotels and Resorts is suing the senator in federal court, alleging Burr used inside information available to him as a member of congress to avoid widespread losses on the stock.
“Senator Burr owed a duty to Congress, the United States government, and citizens … not to use material nonpublic information that he learned by virtue of his duties as a United States Senator in connection with the sale or purchase of any security,” the lawsuit, which was filed in U.S. District Court for the District of Columbia, reads.
The lawsuit comes as Burr is facing calls to resign amid revelations he unloaded thousands of dollars worth of stock—less than a week before the stock market sharply dropped because of the coronavirus pandemic. The senator’s timely sell-off netted between $628,000 and $1.72 million.
Most of the shares were in hospitality companies, like Wyndham Hotels and Hilton, that took an especially hard hit as coronavirus travel restrictions went into place.
More troubling is that the transactions, 33 in total, came as the Intelligence Committee, which Burr chairs, was receiving daily briefings on the pandemic. Given that fact, when news of the sell-off broke, speculation began to stir that the senator had acted on inside information to protect his assets.
If true, Burr could potentially be found in violation of the STOCK Act, which prohibits the use of non-public information for private profit by lawmakers.
Burr has strenuously denied any wrongdoing. In a statement issued last week, the senator admitted while the selloff was motivated by the coronavirus, he did not act on information privileged only to members of congress.
“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13,” Burr said, urging the Senate Ethics Committee to launch an investigation into the sale.