Sen. Kelly Loeffler of Georgia on Wednesday said that she and her CEO husband Jeff Sprecher will liquidate their individual stock share positions and related options after weeks of criticism of the couple for selling millions of dollars in stock amid the coronavirus pandemic.
Loeffler on Wednesday reiterated her defense of the prior stock sales as legally and ethically proper, and her claim that the couple’s trading was handled by third parties without her prior knowledge.
And she said that she and Sprecher, who is the chairman and CEO of Intercontinental Exchange, the company that owns the New York Stock Exchange, are selling off the individual shares not because she had to, but because she wanted to avoid further controversy.
Loeffler, who is the richest member of the Senate, said in a Wall Street Journal opinion page article announcing her decision that her stock holdings would be converted to mutual funds and exchange-traded funds by third-party advisors who handle her investments.
That Journal article carries the headline, “I Never Traded on Confidential Coronavirus Information,” a reference to the fact that Loeffler’s and Sprecher’s trades came after the senator was briefed with other lawmakers about the virus by federal health officials.
In a statement, Loeffler said, “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.”
The liquidation will be done by the end of the week, said a spokesman for Loeffler.
The senator was appointed to her Senate seat by Georgia Gov. Brian Kemp at the beginning of January after then-Sen. Johnny Isakson said he was resigning for health reasons before his term expired.
Loeffler faces several challengers in Georgia’s May 19 open primary for her Senate seat, notably from GOP Rep. Doug Collins, as well as three Democrats, a Libertarian, and an independent. Collins has raised the controversy over Loeffler’s stock trades in his campaign.
While there has not been recent public polling in the race, a recent survey commissioned by the Collins campaign after the fallout over Loeffler’s stock trades showed Collins with a huge lead, of 23 percentage points, over the senator.
“That’s not a real poll. It’s as fake as their attacks,” Loeffler’s spokesman told CNBC on Wednesday.
Before the Collins-sponsored poll, surveys conducted by the University of Georgia, as reported by the Atlanta Journal-Constitution, showed the two Republicans in a virtual dead heat.
Those polls were conducted before Loeffler and her husband Sprecher came under fire last month after it was revealed in Senate disclosure filings that that they had sold up to $3 million worth of equities.
Those sales came in advance of a massive drop in stock market indexes in reaction to the spread of the coronavirus in the United States. The couple’s sales may have insulated them from losses in the stocks.
The trades came after Loeffler was privately briefed by federal officials about the spread and impact of the coronavirus.
Loeffler’s trading as well as other similar stock sales and purchases by other lawmakers, renewed calls by some observers to bar members of Congress from owning stock in individual companies.
Public filings with the Securities and Exchange Commission reveal that in addition to those trades, Sprecher on Feb. 26 sold $3.5 million in shares of Intercontinental Exchange, or ICE, at an average price of $93.42 each. Other SEC filings show that Sprecher and Loeffler “also sold $15.3 million worth of ICE shares on March 11, at an average price of around $87 per share.”
A spokesman for Collins’ Senate campaign, Dan McLagan, said, “We’re not buying it,” in a statement to the Journal-Constitution about the announced share liquidation by Loeffler and Sprecher.
“This is essentially a guilty plea, and Georgians who just saw their retirement plans crater while she profited are not going to agree to the plea deal,” McLagan told the newspaper.
In her statement Wednesday announcing the liquidation, Loeffler said: “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,”
Loeffler also said, “I have not profited or attempted to profit at any time based on my service in the Senate.”
“Our family’s investments have long been managed by outside investment advisors at Morgan Stanley, Goldman Sachs, Sepio Capital, and Wells Fargo,” she said Wednesday in her statement.
“They make their investment decisions for our accounts, including buying and selling securities like stocks and options — without our input, direction or knowledge.”
Loeffler said, “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.”
She said she was selling off the shares because her “transparency” about the stock sales “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,” she wrote in the Journal op-ed.
At least two good-government advocacy groups have filed complaints against Loeffler and other senators in connection with their sales of stocks after a Jan. 24 closed-door briefing for senators by federal health officials about the coronavirus outbreak.
The Securities and Exchange Commission in late March issued a sharp warning against trading on nonpublic information related to the coronavirus. The caution came days after news broke about the official disclosures of the sales by Loeffler and her husband, as well three other senators: Richard Burr, R-N.C., James Inhofe, R-Okla., and Dianne Feinstein, D-Calif.
Burr has said that his decision to sell in 33 individual transactions what may have been as much as $1.7 million in stock — or nearly all of his net worth — was based “solely on public news reports,” including those from CNBC’s Asia bureaus about the spread of the coronavirus.
Inhofe has said the sales in his accounts were part of ongoing sales he ordered for all his stocks when he became chairman of the Senate Armed Services Committee in September 2018.
Feinstein has said the reported stock sales on her disclosure were actually made by her husband, and that she had no input his trading moves.