Sen. Kelly Loeffler liquidates stocks after uproar over coronavirus sell-off
Sen. Kelly Loeffler. Photo: Madnel Ngan/AFP via Getty Images
Sen. Kelly Loeffler (R-Ga.) and her husband Jeffrey Sprecher are liquidating their stock portfolio and moving holdings into exchange traded funds (ETFs) after coming under fire for purchasing and selling roughly $1.4 million in stock just before the market crashed in response to the coronavirus pandemic.
Why it matters: Loeffler, who faces a competitive reelection fight in November, is one of several senators under fire for selling shares shortly after a private briefing on the coronavirus — sparking accusations of insider trading.
Details: In an op-ed published Wednesday, Loeffler wrote that, despite fully complying with the law, she decided to liquidate her accounts and move them to ETFs to "end the distractions" caused by the sell-off.
- Her Senate campaign told Axios that Loeffler's opponents "are clearly using her stock portfolio as a political weapon for an assault on her character during a national crisis," and they saw this as the best way to shut down the "untrue" accusations of improper trading.
- The campaign also said that the Jan. 24 Senate briefing "did not disclose any material or nonpublic information."
What they're saying: The campaign explains Loeffler's investments are managed by third-party advisors at Morgan Stanley, Goldman Sachs, Sepio Capital and Wells Fargo, and neither Loeffler nor her husband — the CEO of Intercontinental Exchange, the company that owns the New York Stock Exchange — direct trading in these accounts.
- “As longtime executives at a Fortune 500 financial-services firm, my husband and I put this arrangement in place to insulate ourselves and our colleagues from these sorts of unfounded accusations,” Loeffler said.
- “I’m not doing this because I have to. I’ve done everything the right way and in compliance with Securities and Exchange Commission regulations, Senate ethics rules and U.S. law. I’m doing it because the issue isn’t worth the distraction,” she added.
Our thought bubble, via Axios' Felix Salmon: Stocks have risen about 20% from their lows, in a move that doesn't seem to reflect economic fundamentals. Loeffler's liquidation is consistent with her earlier stock sales, in that it will turn out to be profitable in the event of future stock market declines.
The big picture: Georgia Gov. Brian Kemp appointed Loeffler, formerly a business executive, in December to fill the seat vacated by GOP Sen. Johnny Isakson.
- On Nov. 3, Loeffler will face off with Rep. Doug Collins (R-Ga.), the top Republican on the House Judiciary Committee during impeachment and a loyal defender of president, for the Senate seat.
Read Loeffler's full statement:
I have not profited or attempted to profit at any time based on my service in the Senate. This story was manufactured by a left-wing website, never fact checked and used as a weapon by the media and my political opponents as a baseless attack. There is no truth to any of it.
Our family’s investments have long been managed by outside investment advisors at Morgan Stanley, Goldman Sachs, Sepio Capital, and Wells Fargo. They make their investment decisions for our accounts, including buying and selling securities like stocks and options —without our input, direction or knowledge.
For my over-20-year career in the financial services industry—as well as since I’ve been in the Senate—I have done everything according to the spirit and the letter of the law, and have been recognized for my integrity, professionalism and hard work.
Amid this health crisis, the temptation to circulate lies and misinformation is too great for the media and my political opponents. That is why I’m taking steps to remove this temptation so that we can turn our focus back to where it belongs: on combating COVID-19 and restoring our country to health and economic recovery.
All of the individual stock and options holdings in these managed accounts will be liquidated by the investment managers and the proceeds will be reinvested into ETFs and mutual funds.
Let me be clear: I do not have to do this. I’ve done everything at or above the requirements for complying with the STOCK Act, SEC regulations, Senate Ethics rules, and US law, and of course, will continue to do so.
I’m doing this because this transparency is being abused for political gain, and the steps I’ve taken to distance myself from these accounts are being ignored. I left the private sector to serve the people of Georgia, not make a profit, and in fact donate my Senate pay to Georgia charities.
I believe Georgians can see with my results in just three months in the Senate that my focus is on delivering results for them, and delivering relief for those impacted by COVID-19. As an outsider, I came to get results and I won’t let politics get in the way of public service and keeping our state and our country strong.