Sen. Kelly Loeffler and her husband to exit stocks after coronavirus sales uproar
Senator Kelly Loeffler and her spouse — the CEO of the public company that owns the New York Stock Exchange — will cash out their individual stock holdings and move their millions into diversified mutual funds. The decision follows a political firestorm over their stock transactions following a Senate briefing on the coronavirus before the global stock market crash.
A wealthy Georgia business executive appointed in December to fill a vacant Senate seat, Loeffler announced the financial decision in an opinion article published by the Wall Street Journal on Wednesday. The Republican reiterated her contention that she and husband, Intercontinental Exchange CEO Jeffrey Sprecher, had done nothing wrong, blaming "baseless attacks from political adversaries and the media" for the controversy.
Loeffler, who is up for reelection in November, also said she wants to close the door on the episode, which her leading opponent for the Senate seat has called "distasteful."
"Although Senate ethics rules don't require it, my husband and I are liquidating our holdings in managed accounts and moving into exchange-traded funds and mutual funds," she wrote.
Some congressional ethics experts say the rules should bar lawmakers from trading individual stocks.
"Anyone who serves in Congress or is the head of a major exchange should have no business speculating in the market," Virginia Canter, the chief ethics counsel for good government group CREW, told CBS MoneyWatch about Sprecher's and Loeffler's stock sales when the controversy first raged last month.
"They should have been in diversified funds" that are not concentrated in a single stock or industry, Canter said. "These are people in a privileged position, and it looks like they took advantage of it."
Loeffler maintains the investments were made by her financial advisers and were done without her knowledge. She and her husband sold between $1.2 million and $3.1 million in stocks in the three weeks after she attended a closed-door coronavirus briefing on January 24, according to a Senate financial disclosure report in mid-March. The sales came ahead of the broader stock market tumbling on worries about the pandemic.
The couple's stock moves first drew scrutiny in a March 19 report by the Daily Beast, which said the Senate's newest member had sold seven figures' worth of stock holdings in the days and weeks after the private gathering of senators on the emerging coronavirus threat that ultimately battered U.S. equities.
CBS MoneyWatch followed the next day with news that Sprecher sold $19 million worth of the Intercontinental Exchange's shares in February and March. The earliest sales of his company's stock came days before the first reported death from the coronavirus disease in the U.S., according to a filing with the Securities and Exchange Commission. ICE shares had since plunged nearly 25% amid the broader downdraft in stocks.
An ICE statement to CBS MoneyWatch last month did not offer many details of Sprecher's stock transactions, but said the company "maintains a global personal trading policy that prohibits insider trading and discretionary trading of stocks by its employees without the prior consent of the company."