Monday, January 18

Revealed: David Perdue Bought Bank Shares After Meeting Financial Officials | Georgia


David Perdue, the Georgia Republican facing a runoff in the Senate election on Tuesday, twice bought a significant number of shares in a U.S. bank shortly after meeting with financial policy-makers, prompting more questions about his prolific stock trading while in office.

In one case, in May 2015, Perdue purchased between $15,000 and $50,000 worth of Regions Financial Corporation stock two days after a 10-minute phone call with then-Secretary of the Treasury Jack Lew.

Perdue bought additional shares in the bank two years later, on May 18, 2017, two days after a half-hour meeting with then-Federal Reserve chair Janet Yellen.

It is in no way clear whether Perdue discussed relevant financial regulation or other market-sensitive issues with Lew or Yellen or whether the discussions influenced his decision to buy the shares.

At the time of the call with Lew, members of the Senate banking committee, which Perdue sits on, were in close talks about a possible trade deal.

But the purchase of more Regions stock in the wake of Perdue’s meeting with Yellen, who will be nominated to serve as Secretary of the Treasury by Joe Biden once the president-elect takes office, is possibly significant, because it took about two months. Before Yellen publicly discussed his support for raising the $50 billion asset threshold for systemically important institutions, a change that meant Regions Bank could see a loosening of important financial regulations.

As Yellen’s views on the issue publicly evolved in her role as Fed chair, so did Perdue’s accumulation of shares in Regions. Perdue separately sought to promote regulatory legislation that was favorable to banks like Regions, which Regions and more than a dozen other banks publicly endorsed.

Public records show that Perdue sold its full stake in Regions on October 11, 2019 and October 23, 2019, suggesting that Perdue may have made a 21% return on its previous investment. He then bought more shares in November 2019 and January 2020.

John Burke, Perdue’s chief communications officer, has said that Perdue does not handle day-to-day decisions about its portfolio, which Perdue says is managed by outside financial advisers.

It is not uncommon for policy-makers like Yellen to meet with senators. On the day of her meeting with Perdue in 2017, Yellen also met Lord Mervyn King, former Governor of the Bank of England, had lunch with Treasury Secretary Steve Mnuchin, and then met with another senator, Ohio Democrat Sherrod Brown. .

Former members of the government say policy-makers try to be cautious in such meetings and try to avoid sharing information that could move the markets. At the same time, it can be difficult to avoid sharing potentially valuable information if senators and legislators are discussing any issue in depth, and a senator might be able to gauge an evolving political position that could be market-sensitive.

The new revelations come as Perdue’s frequent trading in shares while in office has come under increased scrutiny in the press ahead of his runoff in the Senate election Tuesday. If the Democrats win two second-round elections, control of the Senate will be transferred from the Republicans to the Democrats.

Previous media reports have focused on how Perdue has faced federal scrutiny for his frequent stock trading while in office, and whether his position as a senator with access to market-sensitive information, especially during the pandemic, may have influenced some transactions. The New York Times, citing several anonymous sources, said that Perdue’s sale of $1 million in stock in a finance company called Paralytics, where he served on the board, caught the attention of researchers at the Justice Department last spring, who were conducting “an extensive review of the senator’s prolific trade around the start of the coronavirus pandemic for possible evidence of insider trading.”

Investigators eventually concluded that a personal message that had been sent to Perdue by the company’s chief executive, alluding to “upcoming changes”, was not “non-public information” and they refused to press charges. Perdue sold his shares two days after receiving the CEO’s personal message. About six weeks later, the CEO resigned and the company revealed that the results were below expectations, causing the stock to plummet.

The New York Times separately reported that, as a member of the Senate cybersecurity committee, Perdue and others sought the protection of the National Guard against data breaches. the The newspaper said that as of 2016, Perdue bought and sold shares in a cybersecurity company called FireEye 61 times.. Nearly half of those exchanges, the New York Times reported, occurred while Perdue was serving on the cybersecurity committee, which could have given him access to confidential information.

The Perdue Senate campaign did not respond to The Guardian’s request for comment. He has previously denied having any conflict of interest.

But Perdue’s challenger in the senator’s runoff this week, Democrat Jon Scoff, has repeatedly raised the issue and accused Perdue of using his office to enrich himself.

Perdue’s spokesman called the criticisms “unfounded” and emphasized that federal investigators “totally exonerated him.”

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www.theguardian.com

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