At the casino, the house (almost always) wins. In the stock market, Sen. Richard Burr (R-NC) never seems to lose. That’s certainly the reputation Burr has managed to cultivate these last few weeks as his financial disclosures showed he sold off major stock positions worth up to $1.72 million just ahead of the market crash resulting from the COVID-19 coronavirus pandemic. Another of Burr’s well-timed stock trades is now drawing scrutiny. Burr sold off nearly $47,000 worth of shares in an obscure Dutch fertilizer company in 2018 — when the stock was near its five-year peak. Burr’s profitable sale came just weeks before the stock tanked and lost nearly half its value, ProPublica reported Tuesday.
The company, OCI, produces nitrogen fertilizers, methanol and other natural gas-based chemical products. It is based in the Netherlands and is not traded on any U.S. stock exchange, though it does trade on the Euronext in Amsterdam.
During a three-day period in September of 2018, Burr and his wife unloaded their entire stake in OCI, which was trading at about $28. Approximately one month after the Burrs divested from OCI, the company’s stock price began a three-month nose-dive, ending the year trading at about $17 after OCI failed to meet quarterly earnings expectations.
At least part of the underlying reason for OCI’s failure had its roots in U.S. politics, according to ProPublica.
“Investors may also have been disappointed by developments in the Trump administration’s trade policy that hurt OCI,” the report stated.
“The company had been positioned to benefit from the expected sanctions on Iranian oil and petrochemical imports. But in November 2018, the Trump administration waived some of those restrictions. The waivers undercut the company’s hopes.”
In his role as chairman of the Senate Intelligence Committee, Burr has at least some oversight over matters concerning Iran and sanctions policy, though ProPublica did not find any direct evidence that Burr had advance knowledge of the Trump administration’s planned sanction waivers.
“By selling when they did, the Burrs avoided a decline in share price that the company has yet to recover from,” the report continued.
“The stock traded at 29 euros a share on Sept. 5, near the high point for the last four years, and fell 42% by the end of that year. OCI’s stock is now selling at about a third of its value compared with when Burr first invested.”
Federal authorities are already looking into whether Burr and a handful of other lawmakers unloaded stock ahead of the COVID-19 pandemic-related market crash based on non-public information obtained through their elected positions.
[image via YouTube screengrab]
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