Senators under scrutiny after selling shares before stock market crash

Federal investigators are ramping up their inquiries into at least two US senators who sold shares before the US stock market crashed due to coronavirus.

Georgia Republican Kelly Loeffler became the second senator in recent days to turn over documents to federal authorities investigating possible insider trading.

Ms Loeffler said the documents showed that she and her husband – the chairman of the New York Stock Exchange – had "acted entirely appropriately and observed both the letter and the spirit of the law".

Several members of Congress are under scrutiny for investment decisions they made earlier this year on stock holdings related to companies that were subsequently impacted negatively by coronavirus.

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On Thursday, North Carolina Republican Richard Burr stepped down temporarily as chair of the influential Senate intelligence committee, after the FBI seized his phone and other records as part of an investigation into his sale of stocks earlier in February.

The two senators offloaded millions of dollars in stock shortly before the US stock markets crashed in March due to the coronavirus pandemic. As members of Congress they received private briefings on the pandemic from intelligence agencies – information that was not available to the public.

A 2012 law prohibits lawmakers or staff members from buying or selling stocks based on information gleaned as part of their official duties.

Public domain

Mr Burr and Ms Loeffler insist they did nothing wrong and that information related to coronavirus was already in the public domain. Democratic senator Dianne Feinstein also confirmed that she has co-operated with federal investigators over stock sales by her husband. The long-standing senator for California said she had "no involvement with her husband's transactions".

The heightened scrutiny of the investment decisions of members of Congress came as the US House of Representatives prepared on Friday night to vote on a $3 trillion (€2.77 trillion) stimulus package – the latest attempt by lawmakers to cushion the economic effects of coronavirus which has wreaked havoc on the US economy.

The Democratic-controlled House was expected to vote on the mammoth 1,800-page bill despite the opposition of some Democratic as well as Republican members.

The Republican-controlled Senate and the White House have already indicated they will veto the proposal, which they believe is too profligate in light of the financial commitments already provided by the federal government to the US economy.

White House economic adviser Larry Kudlow said he believed the $3 trillion price tag "seems off-target".

“We can’t spend our way into prosperity,” he said.

The scale of the economic toll on the US economy was revealed in new figures on Friday that showed retail sales fell by 16.4 per cent last month – a steeper decline than had been expected by analysts. Several mainstream retail brands such as J Crew and Neiman Marcus have declared bankruptcy in recent weeks.

Vaccine initiative

Separately, US president Donald Trump announced the launch of a new vaccine initiative – “Operation WarpSpeed” – at a press conference in the White House.

Comparing it to the Manhattan Project, which led to the creation of the atomic bomb during the second World War, Mr Trump called the new project an "historic, groundbreaking initiative".

Life-saving treatments would be produced at scale, he said. “We’re talking about massive investments so that millions of Americans will quickly have access to them.”

Mr Trump said he hoped a coronavirus vaccine would be available before the end of the year, despite the fact that the former head of the government’s top vaccine agency said a vaccine is still at least 12 to 18 months away.

“There’s never been a vaccine project anywhere in history like this,” the president declared. “We’re looking for a full vaccine for anyone who wants to get it.”