The former CEO of one of Atlanta’s fastest growing cryptocurrency startups is under fire after reports surfaced of questionable stock trades in the wake of a private congressional briefing.
Sen. Kelly Loeffler, who served as the CEO of Bakkt, an Atlanta-based cryptocurrency exchange, for more than a year, is one of several lawmakers who have reportedly sold off stock weeks prior to the coronavirus outbreak causing one of the worst days in stock market history. Loeffler called the claims a "ridiculous and baseless attack."
The Daily Beast released a story Thursday night alleging that Loeffler sold stock owned by her and her husband, Intercontinental Exchange CEO Jeff Sprecher, on Jan. 24. The same day, Loeffler, who is part of the Senate Health Committee, attended a private meeting on the coronavirus. Loeffler and other senators were briefed on the virus from administration officials. CDC Director Dr. Robert R. Redfield and the head of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, attended the meeting.
According to the report, Loeffler and her husband sold stock in Resideo Technologies, valued at somewhere between $50,001 and $100,000 on Jan. 24, the first of 29 stock transactions since the meeting. Resideo Technologies stock has since fallen by more than half its value since January.
Between Jan. 24-Feb. 14, the report says Loeffler and Sprecher sold jointly-owned stock worth between $1.275 million and $3.1 million. The couple also made two purchases in tech companies during this time period, according to transaction documents submitted to Senate ethics officials: stock in Citrix, a SaaS company that offers teleworking software, worth between $100,000 and $250,000, and stock in Oracle, a company that specializes in integrated cloud applications and platform services, for a price of $100,000 to $250,000.
Since the purchase, Citrix has seen a small bump in stock, while Oracle has seen a dip in value. Oracle stock had a sharp increase in shares on Thursday, after announcing "prospects for live streaming as leading content streaming companies turn to Oracle Cloud Infrastructure," according to Yahoo Fiance.
"The 15 stocks that Loeffler reported selling have lost more than a third of their value, on average, since she reported offloading them," the Daily Beast reported. The article also alleges Loeffler originally reported the sales as stock owned by her husband, but amended the filing last week to clarify most of the stocks were jointly owned.
Under the Stop Trading on Congressional Knowledge Act, it is illegal for members of the Senate to use nonpublic information gleaned from their position to use for personal gain.
Shortly after the Daily Beast story broke, Loeffler tweeted, "This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement."
“As confirmed in the periodic transaction report to Senate Ethics, I was informed of these purchases and sales on February 16, 2020—three weeks after they were made," Loeffler said in a follow-up tweet.
When asked for a comment from Loeffler's office regarding the Daily Beast story, a spokesperson for Loeffler's campaign directed Atlanta Inno to Loeffler's tweets as her official statement.
Loeffler tweeted Friday afternoon a link to the financial disclosures, which includes a note that "transactions notified to filer on or after February 16, 2020." Loeffler said the statement was her "proof" of her accounts.
Loeffler is one of several senators facing scrutiny after attending committee meetings regarding the coronavirus outbreak and selling off large stock holdings following the briefing. The Center for Responsive Politics reported last week that Sen. Richard Burr (R-NC) sold shares worth $500,000 to $1.5 million in February before the stock market saw a historic downfall. Burr attended the same committee meeting as Loeffler on Jan. 24. Senator David Perdue (R-GA) has also been under scrutiny for stock trades after attending a similar briefing on the coronavirus as the member of the Foreign Relations Committee.
Loeffler stepped down from her CEO position at Bakkt prior to assuming office on Jan. 6. Bakkt is a owned by ICE, which is also the parent company of the New York Stock Exchange. In addition to being the founder, chairman and CEO of ICE, Sprecher is a board member of Bakkt and the chairman of the New York Stock Exchange.
Update: Since the publishing of this article, Intercontinental Exchange released a statement in regard to the accusations that Sen. Kelly Loeffler and her husband, ICE CEO and Chairman Jeff Sprecher, sold off stocks after Loeffler was briefed on the coronavirus during a private meeting in the Senate.
"Intercontinental Exchange maintains a Global Personal Trading Policy that prohibits insider trading and discretionary trading of stocks by its employees without the prior consent of the company," the press release says. "With regard to recent media reports concerning securities transactions in the personal managed accounts for Intercontinental Exchange Chairman and CEO Jeff Sprecher and his wife, Senator Kelly Loeffler, Mr. Sprecher and Senator Loeffler have made clear that those transactions were executed by their financial advisors without Mr. Sprecher’s or Senator Loeffler’s input or direction." Read the full statement here.
Loeffler is also part of the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission. The CFTC regulates ICE and U.S. derivatives markets.
The accusations against Loeffler come just three days after Bakkt announced is had closed a $300 million Series B round. The funding involved several notable investors, including Intercontinental Exchange.
