North Carolina senator Richard Burr and his brother-in law were talking on the phone just before the stock market collapsed weeks prior to national Covid lockdowns in 2020. The Securities and Exchange Commission stated in court filing that the two men had spoken shortly before.

This filing was made as the SEC continues its investigation into whether Gerald Fauth (a Republican) and Burr sold the stock on the basis of unmaterial information Burr gained as part his job.

Nonpublic information received by members of Congress is not allowed to be traded because of their position as legislators.

Fauth heads the National Mediation Board. It is an agency which facilitates labor and management relations within the U.S. rail and airline industry. The SEC filing notes also mention that Fauth is the “brother of Senator Burr’s wife Brooke Burr”.

After Burr and other legislators were informed about the risk of the pandemic, SEC is now investigating the timing of February 2020 trades.

Stock markets plunged one week following the Burr stock sale and the brother-in law’s stock purchases. This was due to fears that the pandemic could cripple the world economy. In the following weeks, the Dow Jones Industrial Average saw a 30% drop in its value due to Burr’s trading.

Burr, March 2020 stated that “I only relied on public news reports as a guide to my decision concerning the sale of stock”. Burr added, “In particular, I followed closely CNBC’s science and health reporting from its Asia offices at that time.”

In May 2020, the FBI took Burr’s cell phone as part of its criminal investigation into trades. This action caused Burr to resign as chair of the Senate Intelligence Committee. Joe Biden became president on Jan. 19. Burr announcedThe Justice Department informed him it had closed the investigation and not filed criminal charges against him.

According to the SEC’s civil probe, Burr called his broker on February 13th 2020 at 8.45 am, asking him to sell $1.65million worth of stock. portfolio.”

According to the Manhattan U.S. District Court filings, Burr called Fauth at 11:32 am that day. The call took 50 seconds.

11.33 am. Fauth, chairman of National Mediation Board called the landline number of his primary stockbroker, approximately one minute later.

Fauth, who had failed to get in touch with his first broker called the second within 2 minutes. “Directed her to sell multiple stocks in his wife’s account,” the filing states.

Fauth “sold between $97,000 and $280,000 worth of shares in six companies — including several that were hit particularly hard in the market swoon and economic downturn,” according to ProPublica, which first reported the court filing.

According to the filing, Burr instructed his broker to “enter trades to buy equities from the IRA accounts of Senator Burr” minutes later.

SEC files a motion asking for an order from a judge that Fauth comply with an investigation subpoena dated March 2020. Fauth is required to provide documents and other evidence in the subpoena.

The filing shows that Fauth has obstructed the subpoena by his legal team.

In its filing, the SEC stated that it was investigating Senator Richard Burr’s stock sale on Feb 13, 2020 on the basis material nonpublic data. This is in violation of federal securities laws including the STOCK Act (a 2012 statute by Congress to prevent its members using nonpublic information derived in their positions for personal gain).

“The Commission is investigating also whether [Fauth]Mary Fauth and Senator Burr’s wife sold securities that same day on the basis material nonpublic information. This was in contravention of their duties.

Requests for comment were not promptly answered by a Burr spokesperson and Fauth’s lawyer.