David Perdue: Republican Senator faces scrutiny over stock trades made as Covid spread in US

Legal experts call the timing of the sales ‘suspicious’

Senator David Perdue, a Republican from Georgia, is facing scrutiny over a few very well times stock sales and purchases around the time the coronavirus first began to spread in the US.

The Associated Press reported that on 23 January, around the time Congress was being briefed on the potential impact the coronavirus posed to the US, Mr Perdue sold off between $1m and $5m worth of shares in Cardlytics stock. Mr Perdue used to sit on the company's board of directors.

The sales were detailed in congressional financial disclosure documents.

Then, in March, after Cardlytics' stock plummeted, Mr Perdue bought the stock back at $30 a share. He invested between $200,000 and $500,000 in the stock.

Since then, the shares have quadrupled in value, closing at $121 a share on Tuesday.

Mr Perdue was one of several senators who made sales and investments that appear timed with the economic impact of the coronavirus in the US.

Mr Perdue's investments have become a point of contention as he is now locked in a runoff election against Democrat Jon Ossoff in January. The runoff in January will - in part - determine which party controls the Senate come January.

Mr Ossoff has seized the opportunity to use the questionable trades against Mr Perdue, calling him a "crook".

There is no evidence that Mr Perdue used insider knowledge to inform his trades. It is illegal for a member of Congress or a company insider to use nonpublic information to guide their stock trades.

Even still, legal experts are suspicious of the timing of Mr Perdue's trades.

John C Coffeee Jr, a Columbia University law school professor specialising in corporate and securities issues, said the trades "seem suspicious" but said suspicions weren't enough to charge someone with a crime.  

"You need more than suspicions to convict," he said.

A spokesman for Mr Perdue told the Associated Press that Mr Perdue had been cleared of any wrongdoing, but did not provide further details.

“The bi-partisan Senate Ethics Committee, DOJ and SEC all independently and swiftly cleared Senator Perdue months ago, which was reported on,” the spokesman said.

Mr Perdue is not the only Georgia Republican facing a run-off election who has been accused of insider trading; Sen. Kelly Loeffler was also accused of using her privileged information as a member of Congress to profit on the stock market.

Ms Loeffler's purchases sparked a Senate ethics investigation. She claimed she had no knowledge of what her stock managers were doing and denied she participated in insider trading.

In Ms Loeffler's case, she attended a 24 January briefing from Dr Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, and Dr Robert Redfield, the head of the US Centres for Disease Control, about the pandemic's threat.

In the three weeks following the meeting, Ms Loeffler and her husband made more than 20 stock sales of between $1.25m and $3.1m. She also bought stock in two companies that make teleworking software.

When markets plummeted in February, the couple sold $18.7m in shares of Intercontinental Exchange stock in three sales. They also sold their shares in retail stores, according to the Atlanta Journal Constitution.

The Senate panel investigating Ms Loeffler said it found "no evidence" that she broke the law or any of the Senate's rules.

In May, she announced she would step down from a subcommitte with direct oversight of the Commodity Futures Trading Commission, though she still maintains her seat on the full committee.

Mr Perdue attended the same 24 January briefing as Ms Loeffler.

The senator's moves with Cardlytic were part of a broader flurry of action he took at the beginning of 2020.

Despite praising Donald Trump for "executing the greatest economic turnaround in US history" in February, Mr Perdue made a series of quick sales from his stock portfolio and made purchases of stocks that were poised to do well during the pandemic, specifically DuPont, which manufactures protective equipment, and pharmaceutical company Pfizer, which has produced a viable coronavirus vaccine.

Donna Nagy, an Indiana University law professor, said that Congress should limit the investments members can make while serving.

“All of these questions about the motivations behind our members of Congress and their personal securities trading could be alleviated if Congress passed a law that limited investments,” Ms Nagy, said. “Ordinary citizens should not have to question members of Congress about their investments.”