“The Georgia Republican, currently in the middle of a grueling runoff campaign, has not provided any documentation to the public about the government probes into his stock trading.”
Atlanta, Ga. — This morning, new reporting by Sam Brodey of The Daily Beast debunks the repeated claims by Sen. David Perdue (R-Ga.) that he was “totally exonerated” for his “well-timed” stock trading by the Securities and Exchange Commission and Justice Department, noting that “neither agency has that power.”
Perdue’s unethical stock trading has been under intense scrutiny, most recently as new reports have found Perdue allegedly used his office to personally profit off of the coronavirus pandemic and opioid crisis.
Perdue has yet to provide a single piece of evidence showing he was actually cleared by federal authorities for his impeccably timed stock trades, and has not proved whether the probes include profiting from defense contractor stocks as Chairman of the Senate Subcommittee on Seapower, using his seat on the Senate Banking Committee to trade hundreds of thousands worth of bank shares, or knowledge from the coronavirus task force briefings to purchase stocks in Pfizer, days before they announced they would begin working on a vaccine.
Find key highlights from the report below.
- Faced with a steady drip of reporting on his conspicuously timed stock trades, Sen. David Perdue (R-GA) is defending himself with a line that his biggest ally, President Donald Trump, has practically made into a mantra.
- “Totally exonerated,” declares a newly released television ad from Perdue, which claims he has been fully cleared by the Department of Justice and the federal Securities and Exchange Commission.
- Except neither agency has that power.
- Both agencies probed trades Perdue made at the onset of the coronavirus pandemic, and both have reportedly concluded those probes without filing criminal or civil charges. But contrary to Perdue’s claims, that conclusion does not amount to an exoneration—because these agencies explicitly do not issue them.
- The Georgia Republican, currently in the middle of a grueling runoff campaign, has not provided any documentation to the public about the government probes into his stock trading. That is possibly because any messages Perdue might have received from the feds would likely have painted a far more ambiguous picture about his activity, securities law experts told The Daily Beast.
- Upon closing a file, the SEC may inform the entity being investigated that they “do not intend to recommend an enforcement action.” But the message also includes a clear caveat that the notice “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation.” Much of the time, say defense lawyers who have worked these cases, neither agency issues a letter or notice of any kind that a file has been closed, leaving them to read the tea leaves as to what investigators are up to.
- There is a meaningful difference between an exoneration and a decision not to charge, say experts. “It’s good news for him, but it doesn’t exonerate him,” said Chris Bruno, a former prosecutor at the DOJ, which can bring criminal charges for insider trading. “It just means that they have not been able to find relevant evidence that would substantiate a case, at this static point in time, beyond a reasonable doubt, and that’s different from exonerating someone. They’re not saying they found evidence showing innocence.”
- The SEC, which can make civil charges for violations of financial rules, is “not in the exoneration business,” said James Cox, a professor of securities law at Duke University, who explained that the absence of charges against a person or company can reflect a number of calculations.
- Perdue’s office did not respond to a request for comment on what correspondence he received from federal investigators and why he claimed he was fully exonerated.
- During the runoff campaign, both GOP senators have felt compelled to put money behind ad campaigns claiming their stock trades crossed no legal or ethical lines. Both have been under scrutiny from the press and from federal investigators for months for their offloading of certain stocks, and acquisition of others, around private Senate briefings related to the spread of the coronavirus in January.
- A recent report in the New York Times found that in January, Perdue personally called his independent stockbroker and directed him to sell off $1 million in holdings in a financial company where he’d previously served on the board. Perdue, a former corporate CEO who was the Senate’s most active stock trader by far, also engaged in conveniently well-timed trades in previous years.
- In 2018, for example, the senator acquired stock in a contractor for the U.S. Navy as he assumed control of a Senate panel with jurisdiction over the Navy, and then sold off the stock at a profit as he worked on a bill that steered new business to the contractor, The Daily Beast reported.
- Perdue has decided to skip a scheduled Sunday debate with his Democratic opponent, Jon Ossoff, a move that will allow him to avoid any direct questions on his stock trading. And Perdue has stuck closely to friendly audiences since the runoff campaign began, denying national and local press the opportunity to ask about his trading and his explanation for it.
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