Republican Richard Burr steps down as Senate Intel Chair as FBI probe into stock sales, insider trading escalates

Sen. Richard Burr (R-N.C.) has stepped down as chair of the Senate Intelligence Committee amid reports that federal authorities have escalated an investigation into alleged insider trading.

Burr temporarily resigned from his chairmanship, which he’s held since 2015, on Thursday morning after the Los Angeles Times reported that FBI agents had executed a search warrant on his residence and seized his cell phone. The publication also reported that the FBI had recently served a warrant on Apple in order to obtain information from Burr’s iCloud account.

In a statement, Burr said he would step aside as committee chair “until this investigation is resolved.”

“The work the Intelligence Committee and its members do is too important to risk hindering in any way,” he said. “I believe this step is necessary to allow the committee to continue its essential work free of external distractions.”

Representatives for the FBI, Department of Justice, and Securities and Exchange Commission all declined to comment on the investigation.

Burr is among several members of Congress who have faced scrutiny for stock trades executed in the wake of private Senate briefings earlier this year on the threat posed by the coronavirus pandemic. Under the STOCK Act of 2012, members of Congress are prohibited from using nonpublic information gained through their positions to trade stocks.

In addition to Burr, Sen. Kelly Loeffler (R-Ga.)—who is married to New York Stock Exchange chairman Jeffrey Sprecher—has also drawn scrutiny for stock trades made by her and her husband in the wake of Senate committee briefings. While representatives for Loeffler did not return a request for comment, a spokesperson for Loeffler told the Washington Post that “no search warrant has been served” on the Georgia senator.

Loeffler’s office subsequently released a statement late Thursday revealing that she had provided “documents and information” on her stock holdings to the Department of Justice, SEC, and Senate Ethics Committee.

“The documents and information demonstrated [Loeffler] and her husband’s lack of involvement in their managed accounts, as well as the details of those accounts,” Loeffler’s office said.

Likewise, a spokesperson for Sen. Dianne Feinstein (D-Calif.) confirmed reports that Feinstein had been questioned by the FBI and turned over documents relating to stock trades made by her husband, investment banker Richard Blum.

“Senator Feinstein was asked some basic questions by law enforcement about her husband’s stock transactions,” the Feinstein spokesperson told Fortune. “She was happy to voluntarily answer those questions to set the record straight and provided additional documents to show she had no involvement in her husband’s transactions. There have been no follow up actions on this issue.”

Whereas Loeffler and Feinstein claim to have had no knowledge of stock trades made on their behalf or by their spouses, Burr has acknowledged that he was behind dozens of transactions worth up to $1.7 million in early February—several weeks before markets globally went into free fall as the pandemic’s economic toll became clear. Additionally, Burr’s brother-in-law, Gerald Fauth, sold up to $280,000 worth of stocks on the same day as Burr, ProPublica reported earlier this month.

Burr has denied that he used nonpublic information gained through his position to inform his stock trades, claiming he “relied solely on public news reports to guide my decision” and calling for a Senate ethics investigation in the interest of “full transparency.” He has also denied coordinating trades with his brother-in-law.

The investigation into Burr, and potentially other members of Congress, is the biggest test yet for the STOCK Act, which has been deployed sparingly since its passage in 2012. The bill sought to close a loophole that effectively exempted members of Congress from SEC insider trading laws.

Burr’s current term in the Senate expires in 2022. Prior to the insider trading controversy, he had indicated that he does not plan to seek reelection.

Update, May 14, 2020: This article has been updated to include comment from representatives for Sen. Loeffler, Sen. Feinstein, the FBI, the Department of Justice, and the SEC.