(CN) — The FBI served North Carolina Senator Richard Burr with a search warrant Wednesday evening and seized his cellphone as part of an investigation of possible insider trading.
Republican Senator Burr, the chairman of the Senate Intelligence Committee, reportedly had his cellphone seized by federal agents Wednesday night at his residence as part of a stock trading investigation. The investigation is aimed to determine if Burr broke insider trading regulations during stock trades he made as the United States was beginning its battle with Covid-19.
The investigation stems from a series of transactions Burr made on Feb. 13. In these transactions, the North Carolina senator sold a sizeable portion of his stock portfolio, with much of the sold stock coming from businesses that would later take a series of hits as the stock market responded to the coronavirus outbreak in the United States.
Burr reportedly sold this significant portion of his stock portfolio around the time that two committees Burr sits on, the Intelligence Committee and a Senate health committee, were receiving coronavirus briefings on a daily basis.
The health committee received a briefing on the coronavirus on Feb. 12 – just one day before Burr sold off significant portions of his portfolio.
Burr’s stock sell-off roughly amounted to between $628,000 and $1.72 million, according to the Los Angeles Times, which first reported the story.
Burr is being sued by a stockholder in Wyndham Hotels & Resorts, who claimed that the senator violated securities laws when he sold his shares in the hotel company.
Another potential aspect of the ongoing investigation is the fact that Burr’s brother-in-law, Gerald Fauth, also reportedly sold a notable amount of stock the same day the North Carolina senator sold his.
According to documents filed with the Office of Government Ethics, Fauth, who serves on a national mediation board for labor disputes in the rail and aviation sectors, sold six stocks that amounted to between $97,000 and $280,000.
Burr has fully denied coordinating these trades with his brother-in-law.
The FBI’s search warrant comes after Burr asked that the Senate Ethics Committee, the committee in charge of responding to and dealing with ethical matters involving sitting senators, to review his stock trades.
Sitting senators being served with search warrants like the one Burr received Wednesday evening are not a common occurrence. Such a warrant would also have required an official stamp of approval from a sitting judge, suggesting that prosecutors or FBI agents would have had to have made a compelling enough case to a judge that the warrant was justified.
The investigation is largely due to law signed by President Obama in 2012 known as the Stop Trading on Congressional Knowledge Act, or STOCK Act. Under this law, it is unlawful for members of Congress or other government employees to use information they learned as part of their government employment for their own personal and private financial gain.
The bill received widespread bipartisan support, even being sponsored by then-Republican Senator Scott Brown and Democratic Senator Kirsten Gillibrand. The bill passed overwhelmingly in the House and Senate, with just three senators voting no.
Richard Burr was one of the three dissenting senators.
Burr is not the only sitting senator to face some scrutiny for stock transactions made in the run-up to the Covid-19 outbreak in the United States.
Republican Senator Kelly Loeffler of Georgia reportedly also sold off a large amount of her portfolio, selling stock roughly valued between $1.25 million and $3.1 million in late February and early March. The dumped stock came from a series of businesses that would later be hard hit by the stock market as the coronavirus pandemic began in earnest in the United States.
Loeffler did more than just sell off her stock during this time period. She also bought shares from a company called Citrix, a software company that provides remote networking services and, on its website, advertises itself as a company that helps to “reimagine employee experience by increasing productivity and engagement” and supports a remote workforce.
After these sales were released to the public, Loeffler announced that she and her husband would divest all individual stocks.
Loeffler, who was appointed to the Senate to fill a vacancy left by former Senator Johnny Isakson after he resigned due to health reasons, is set to run for the seat in a special election later this year.
Burr, who was first elected to the Senate in 2004, said that he does not plan to run for reelection once his term expires in 2022.
Burr’s office did not immediately respond to request for comment Wednesday night.