Sen. Richard Burr's Pre-Pandemic Stock Sell-Offs Highly Unusual, Analysis Shows

[Demovictory9]

https://www.npr.org/2020/04/16/836126532/senator-burrs-pre-pandemic-stock-sell-offs-highly-unusual-analysis-shows


Sen. Richard Burr's Pre-Pandemic Stock Sell-Offs Highly Unusual, Analysis Shows

Sen. Richard Burr's sale of up to $1.7 million in stocks shortly before the recent market crash was one of the lawmaker's only market-beating trades since record keeping began eight years ago, according to a new study.

The new analysis, presented by researchers at Dartmouth College, shows just how unusual the North Carolina senator's transactions were. On a single day, Feb. 13 of this year, Burr unloaded a significant portion of his net worth — a departure from his typically low-volume trading history.

The Senate Intelligence Committee chairman was generally a poor stock-picker, said Bruce Sacerdote, an economics professor at Dartmouth who worked on this analysis along with two of his students. In fact, most U.S. senators over the course of the past eight years have only found middling success in the stock market, their study found.

Since 2012, Burr picked stocks that performed poorly: On average, six months after he bought a stock, it was down .8% relative to stocks in the same industry; after a year, his stocks were down by 6% compared with that benchmark.

"Burr has relatively lousy performance over the broad period," says Sacerdote. "It's not like he's a stock-picking genius."

Burr also did not typically trade in high frequencies. Between 2012 and 2019, he made on average 3.2 stock sales transactions per quarter. But on Feb. 13 of this year, Burr made more than 30 stock sales.

These sales were both well-timed and well-chosen: After Burr sold the stocks, they underperformed the market by 8%. This means the stocks performed worse than comparable stocks in the same sector between the sale and the end of March.

This finding by Sacerdote and his team is statistically significant, which means that it is highly unlikely that Burr made such a successful series of transactions by chance alone.

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1. Clear case of insider training, which is illegal.

But I don't think anything will happen to him. Senators seem immune from such crimes.