Market Overview

Sen. Kelly Loeffler Will Liquidate Stocks 'To End The Distraction' Following Insider Trading Controversy

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Sen. Kelly Loeffler Will Liquidate Stocks 'To End The Distraction' Following Insider Trading Controversy

United States Senator for Georgia Kelly Loeffler on Wednesday said that she and her husband Jeffrey Sprecher, who heads the New York Stock Exchange parent company Intercontinental Exchange Inc. (NYSE: ICE), will divest from individual stocks in the coming weeks.

What Happened

The move comes following the controversy surrounding their sale of millions in stocks just ahead of the massive market selloff caused by the novel coronavirus (COVID-19) pandemic.

In an opinion post for the Wall Street Journal, Loeffler said that her family's investments are managed by third-party advisors at Morgan Stanley (NYSE: MS), Goldman Sachs Group Inc. (NYSE: GS), Sepio Capital, and Wells Fargo & Company (NYSE: WFC), and they don't do "direct trading in these accounts."

"As longtime executives at a Fortune 500 financial-services firm, my husband and I put this arrangement in place to insulate ourselves and our colleagues from these sorts of unfounded accusations," Loeffler added.

The former Bakkt CEO said both Sprecher and she would liquidate their holdings in the managed accounts and move them to exchange-traded funds and mutual funds.

Loeffler noted that she would report the divestment in her periodic Senate filing later this month.

"I'm doing it because the issue isn't worth the distraction," she said. "My family's investment accounts are being used as weapons for an assault on my character at a time when we should all be focused on making our country safe and strong."

Why It Matters

Loeffler was among the four senators, who were accused of using privileged information as members of the Congress to make trades benefiting them financially, at a time when they were assuring the public that the U.S. is ready to tackle the coronavirus outbreak.

The 49-year old Republican, who is also the wealthiest member of the Congress by far, filled in as Georgia senator when incumbent Johnny Isakson, who retired without completing his term due to health concerns.

Loeffler is seeking to complete Isakson's term and is contesting in the special election for the Senate seat later this year. The controversy has taken center stage in her and her primary opponent and fellow Republican Doug Collins's campaign.

"This is essentially a guilty plea and Georgians who just saw their retirement plans crater while she profited are not going to agree to the plea deal," Dan McLagan, a spokesman for Collins's campaign, told the Journal. "Same advisors, different funds and no blind trust? We're not buying it."

Price Action

Intercontinental Exchange shares closed 3.69% higher at $85.34 on Wednesday.

 

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