Sen. Kelly Loeffler (R-Ga.) on Wednesday said she would liquidate her stocks after claims she misused privileged information to adjust her portfolio ahead of the pandemic-led market crash.
“My family’s investment accounts are being used as weapons for an assault on my character at a time when we should all be focused on making our country safe and strong,” Loeffler wrote in an op-ed for The Wall Street Journal.
Allegations of wrongdoing, which Loeffler has repeatedly denied, revolve around claims that she and others leveraged for personal gain information from a closed-door Senate-only meeting that previewed COVID-19 impacts, potentially giving participants an edge on markets.
Between Jan. 24 and Feb. 14, Loeffler reportedly sold around $3.1 million in stocks she held with her CEO husband Jeff Sprecher, who heads the company that owns the New York Stock Exchange.
Wall Street’s COVID-19 rout has battered markets, leaving the benchmark S&P 500 down around 19 percent from its February record high.
Loeffler said she makes no decisions on her investments, which she insisted are managed by a third-party.
“I want to set the record straight: This is a ridiculous & baseless attack. I don’t make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement,” Loeffler wrote on Twitter.
The net worth of Loeffler and her husband, according to The Wall Street Journal, is estimated at around half a billion dollars, making her the wealthiest member of the Senate.
“My family’s investments are managed by third-party advisers at Morgan Stanley, Goldman Sachs, Sepio Capital, and Wells Fargo. These professionals buy and sell stocks on our behalf. We don’t direct trading in these accounts. These trades are disclosed routinely and publicly in reports to the Senate Select Committee on Ethics, in full compliance with transparency laws,” Loeffler wrote in the Wall Street Journal op-ed, headlined: “I never traded on confidential coronavirus information but to end the distraction, my family will divest from individual stocks.”
In the op-ed, Loeffler said her stock holdings would be converted to mutual funds and exchange-traded funds.
She maintained she acted correctly and in compliance with the law.
“I’ve done everything the right way and in compliance with Securities and Exchange Commission regulations, Senate ethics rules and U.S. law,” she said, adding that she was divesting “because the issue isn’t worth the distraction.”
An official with Loeffler’s campaign told investigative reporter Sara Carter that the claims rely on twisting facts.
“Allegations of improper trading are based purely on cherry-picking dates and misrepresenting transactions contained in Senator Loeffler’s Periodic Transaction Reports (PTRs), rather than any actions that Sen. Loeffler took,” a spokesperson for Loeffler told Carter.
Even if absent any wrongdoing, the optics of the stock sales are troublesome, according to Chester Spatt, professor of finance at Carnegie Mellon University and former SEC economist.
“This is why senators shouldn’t be doing this,” he told the Atlanta Journal-Constitution. “The burden is on them to demonstrate they were not using insider information.”