RALEIGH, N.C. — Court records released Tuesday reveal that U.S. Sen. Richard Burr avoided an estimated $87,000 in losses and gained more than $164,000 due to his “well-timed” stock sales at the beginning of the COVID-19 pandemic.
New information about a now-closed insider trading investigation into Burr, R-N.C., and his family came to light Tuesday after a judge ordered the release of federal materials. They are related to a search warrant that allowed investigators to seize and search Burr’s cell phone.
The Los Angeles Times first reported the Department of Justice investigation in May 2020 after Burr sold more than $1.6 million in stocks at the beginning of the COVID-19 pandemic. The court documents reveal that investigators believed Burr, his brother-in-law and sister-in-law may have sold off stocks based on nonpublic information Burr received in February 2020 as the pandemic was rising in the United States.
While the Department of Justice and Securities and Exchange Commission have both investigated Burr and his family, they have not filed any charges. The Justice Department probe, which produced the newly redacted documents, is completed.
The version of the search warrant materials made public Tuesday includes some information that previously was redacted and gives more insight into what caused investigators to look into decisions Burr made about his stocks.
Burr sold nearly all of his and around 61% of his wife’s stocks on Jan. 31 and Feb. 13, the documents state. His brother-in-law, Gerald Fauth, told Fauth’s wife’s broker to sell “a significant amount” of their stock within minutes of speaking to Burr on Feb. 13, court documents state. Court documents say the sale of Burr's and Fauth’s stocks on Feb. 13 happened nearly simultaneously.
Six days after, as the seriousness of the pandemic became clear, the market experienced “a dramatic and substantial downturn,” court documents state.
FBI agents tried to interview Burr at his North Carolina home on March 28, but he refused.
The Los Angeles Times learned about the Department of Justice investigation from an unnamed law enforcement official who tipped the newspaper off that Burr’s cellphone had been seized in May 2020.
In January 2021, Burr announced that the Department of Justice had ended its investigation.
“Tonight, the Department of Justice informed me that it has concluded its review of my personal financial transactions conducted early last year,” Burr told McClatchy. “The case is now closed. I’m glad to hear it. My focus has been and will continue to be working for the people of North Carolina during this difficult time for our nation.”
A month later, the Los Angeles Times petitioned the court to unseal all judicial records regarding the warrant obtained to search Burr’s phone.
District Court Judge Beryl Howell of the District of Columbia denied the request.
“Assuming that the requested materials exist, and that the qualified public right of access attaches, no disclosure of search warrant materials would be appropriate in a closed, non-public investigation that has not resulted in criminal charges, and where individual privacy and governmental interests may be implicated,” Howell wrote.
But 10 months later, a different federal judge ordered Fauth to comply with a subpoena regarding the SEC’s parallel investigation into allegations of insider trading by Burr and his family.
Meanwhile, the Los Angeles Times continued to appeal its own case.
In an order released Aug. 29, Howell said something had changed: The previously secret DOJ investigation was now public. Howell cited public admissions from the SEC, Fauth’s attorney, Burr and even the DOJ, which acknowledged for the first time its own investigation and that the search warrant materials existed.
DOJ submitted to Howell proposed redacted copies of the search warrant, the application for the warrant and records known as the supporting affidavit and the docket sheet.
The court ordered DOJ to specify in detail why portions needed to be redacted. DOJ reduced the redactions but court records still raised questions, Howell said in her order. On Aug. 19, in a private hearing, the court went through each line with DOJ to determine why it was redacted.
Howell said she would allow some of the redactions to stand. Those included will protect third-party privacy interests, financial information gained from third parties and private third-party witnesses, she said. It also includes descriptions of law enforcement techniques.
She said the DOJ’s proposed redactions were meant to preserve due process interests of the people who were targeted in the investigation but weren’t charged criminally.
Howell specifically told the DOJ which lines of the order needed to be released to the public and ordered that the document be filed by Sept. 5, which was a holiday.
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