As we posted last week, the FBI was apparently investigating Senators Loeffler, Feinstein, Inhofe and Burr for possible insider trading. Yesterday it announced that it was closing the investigation of all except Burr.
Feinstein claims her account is in a blind trust, Loeffler claims that her husband was involved in the trades with no involvement by her. Inhofe’s trades were reportedly sales of tech companies, not directly coronavirus related, and he claims that he gave instructions in 2018 to his broker to move his portfolio entirely out of stocks and into mutual funds in December 2018. He stated that his adviser has been doing so since then, and he was not aware of or consulted about any transactions.
While Feinstein and Inhofe may have valid defenses, Loeffler’s trades are more problematic given the allegation that she sold the same day White House officials briefed her and her Health, Education, Labor and Pensions Committee colleagues about the coronavirus. Her sales, and purchases were coronavirus related, according to press reports.
The fact that the DOJ has shut down a criminal investigation does not mean that the SEC is not investigating. Given the fact that penalties for insider trading from the SEC can be up to three times the profit gained, or loss avoided, that is a significant penalty.