A new analysis from Dartmouth College reveals that Senate Intelligence Committee Chairman Richard Burr (R-N.C.), who sold up to $1.7 million in stocks before the market began to nosedive because of the coronavirus, had otherwise middling success in the stock market during the last eight years.
Burr wasn’t alone in his mediocre stock performance; the study looked at the market behavior of all senators who were in Congress at some point in the last eight years. The majority only found very modest success in the market, if any success at all.
In Burr’s case, since 2012, stocks that the North Carolina lawmaker bought fell an average of 6 percent after a year, relative to stocks in the same industry.
“Burr has relatively lousy performance over the broad period,” economics professor Bruce Sacerdote, who worked on the analysis with his students, told NPR. “It’s not like he’s a stock-picking genius.”
Additionally, Burr wasn’t an overly active trader, averaging 3.2 stock sale transactions per quarter over the past eight years.
However, on Feb. 13, the senator made more than 30 stock sales.
After Burr sold the stocks, they lost value, underperforming the market by 8 percent. Sacerdote and his students found this stat to be statistically significant, meaning that it was very unlikely that Burr’s series of successful transactions occurred by chance alone.
Kevin Fahey, a lecturer at Swansea University who reviewed Sacerdote’s findings, told NPR, “Lawmakers are not making money off of their [stock market] decisions. Maybe Richard Burr made money … but all senators taken as a whole, all lawmakers don’t seem to be doing this systematically.”
As head of the powerful Senate Intelligence Committee, Burr received frequent briefings on the status of the growing outbreak. In private, he described the disease as serious, but never did so publicly.
On Feb. 27, Burr told a private audience of wealthy constituents that COVID-19 was “much more aggressive in its transmission than anything that we have seen in recent history. … It is probably more akin to the 1918 pandemic.”
Burr’s trades are now the subject of a Justice Department probe.
“Well-timed trades and trades that are unusual in size or scale are certainly going to be relevant to the government,” Katherine Goldstein, former head of securities fraud investigations for the U.S. Attorney’s Office for the Southern District of New York, told NPR.
“But this investigation will hinge on whether there is evidence that the information imparted to any member of Congress was material and nonpublic,” she noted. “That’s where the rubber will meet the road.”