FBI cited ‘well-timed stock sales’ in seizing Sen. Burr’s cellphone
WASHINGTON — The Department of Justice launched a criminal insidertrading and securities fraud investigation of Sen. Richard M. Burr (R-N.C.) over what the FBI called “welltimed stock sales” at the outset of the COVID-19 pandemic in 2020, according to a partially redacted warrant released Monday evening.
The Times successfully sued for access to the warrant under the Freedom of Information Act, then fought the extensive redactions made by the department.
In late August, Chief U.S. District Judge Beryl A. Howell ordered the Justice Department to file a new version of the warrant with fewer redactions and more information on the evidence it used to obtain the warrant, but accepted the department’s request to keep certain third-party witness information and law enforcement techniques under seal.
“We’re pleased to see that these less-redacted filings provide the public with additional insight into the government’s investigation. While some redactions remain, the public now has a much clearer picture of the government’s basis for executing a warrant for Sen. Burr’s cellphone,” said Katie Townsend, an attorney for The Times who works for the Reporters Committee for Freedom of the Press.
Howell asked the government to make an additional filing Wednesday so she can evaluate the remaining redactions. Lawyers for The Times and Reporters Committee for Freedom of the Press are also reviewing the redactions, Townsend said.
A spokesman for the U.S. attorney’s office for the District of Columbia declined to comment.
The May 2020 warrant request to search Burr’s cellphone said that in February of that year, while the government was downplaying concerns about COVID-19 in the U.S., Burr sold 95% of his holdings in his individual retirement account and 58% of the holdings in wife Brooke Burr’s IRA. He also invested $1,189,000 in the Federated U.S. Treasury Cash Reserves Fund using 76% of the total holdings in a joint account he held with his wife.
“His portfolio went from approximately 83% in equities to approximately 3% in equities. Beginning on February 20, 2020 — six days after Senator Burr’s sale of the majority of his equity — the stock market endured a dramatic and substantial downturn,” FBI Special Agent Brandon Merriman said in the affidavit used to justify the search. “In total, Senator Burr avoided more than an estimated $87,000 in loss as a result of his welltimed stock sales, and profited more than $164,000.”
Gerald Fauth, Burr’s brother-in-law, also sold about $160,000 in stocks after speaking and texting with Burr, the affidavit says.
The 38-page FBI affidavit argued that the mid-February timing of sales of stock held by Burr, his wife and Fauth was suspicious, and stated that agents were looking for text messages and other communications about the stock sales as part of an investigation into whether Burr violated a law preventing members of Congress from trading on insider information they glean from their official work.
The partially redacted version of the warrant provides few details on what nonpublic information Burr, then chairman of the Senate Intelligence Committee, had about the pandemic before his stock sales. He stepped down from the committee shortly after The Times broke the news of the search warrant.
Burr and other senators received briefings from U.S. public health officials before the stock sales. Several of them, including California Democrat Dianne Feinstein, were scrutinized by the Justice Department for potential violations of congressional insider-trading rules for selling or buying stock at the start of the pandemic. Burr’s was the only case in which a warrant was obtained.
Burr was never charged with crimes connected to the trades. The Justice Department confirmed in its June court filings that it had dropped the investigation in January 2021. A month later, The Times filed its lawsuit, arguing that the records should be made public to explain the department’s unusual decision to pursue a warrant against a sitting member of Congress.