TL;DR: “This is a ridiculous & baseless attack. I don’t make investment decisions for my portfolio,” former cryptocurrency exchange Bakkt CEO, now US Senator from Georgia, Kelly Loeffler snapped on Twitter in response to accusations of dumping stock after a closed briefing given to lawmakers by leading health officials about coronavirus.
Ex-Bakkt CEO Accused of Dumping Stock After Early Coronavirus Briefing
On Wall Street, it’s known as a smash and grab, a form of insider trading, a kind of privileged looting. Among the many moral hazards endemic with having lawmaking bodies is early access to information sure to change investment mood. Members are often privy to coming acts of war, for example, massive mobilizations that will impact markets at least indirectly. It’s part of the deliberative, policymaking and crafting process.
This means it can be in a lawmaker’s rational self-interest to adjust their personal financial risk exposure accordingly ahead of panics or in anticipation of market upswings. Months-old, newly minted US Senate appointee Kelly Loeffler, Bakkt‘s first CEO, is being accused of such stock moves after she was briefed with colleagues in closed-door meetings about coronavirus. Loeffler denies the charges and their implications, insisting, “Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.” Senate ethics require sitting members to have all of their financial dealings monitored.
She and four other senators, as of publication, are believed to have sold off millions of dollars worth of stock shortly before a significant market crash. What’s worse is how many of these same senators were saying the opposite of their supposed trades, playing down coronavirus’s potential impact. One accused smash and grab senator reportedly told well-connected supporters about coming ordered government shutdowns and emergency measures — vital insider knowledge.
Loeffler is thought to have sold between $1 and $3 million dollars from the end of January just as she and her colleagues were getting coronavirus briefings. Reporting stresses she and her husband (Jeffrey Sprecher, CEO of Intercontinental Exchange, which owns the New York Stock Exchange and Bakkt) sold stock right after she was briefed on the issue by leading health agencies like the CDC and Dr. Anthony Fauci from the National Institutes of Health. After that day and through mid-February, she and her husband made 29 trades, 27 of which were sales. One of the two stock buys was in a telecommuting and teleconferencing company, according to reports.
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DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.