Sen. Burr’s brother-in-law ordered to provide testimony in SEC insider trading investigation
By Kara Scannell
A federal judge has ordered Sen. Richard Burr’s brother-in-law to answer questions from the Securities and Exchange Commission, allowing the regulator to advance its investigation into their stock sales.
Judge Andrew Carter said Gerald Fauth, Burr’s brother-in-law, would have to testify, but he agreed to some accommodations to mitigate Fauth’s undefined medical condition.
Fauth had tried to avoid testifying in person, saying a serious medical condition should prevent him from enduring the stress of being questioned under oath.
Burr, a North Carolina Republican who held positions on committees overseeing health policy and US intelligence, sold $1.65 million in stock on February 13, 2020, according to court filings. The sales included tens of thousands of dollars in stock in the hospitality industry, which was particularly hard hit in the coronavirus outbreak. Burr was staying at Fauth’s home the week of the well-timed stock sales.
Lawyers for Fauth and Burr have denied any wrongdoing.
The SEC will need to provide documents and topics one week in advance of Fauth’s remote testimony, which will be limited to 2.5 hours with unlimited breaks, the judge said.
The SEC has said it needs Fauth’s testimony as part of its investigation into whether Fauth and Burr’s February 2020 stock trades were made while they were in possession of inside information. The SEC says Burr possessed “material nonpublic information concerning Covid-19 and its potential impact on the U.S. and global economies.”
Fauth had asked the judge to permit him to answer in written form.
In rejecting Fauth’s arguments, Carter cited his role as the chairman of the National Mediation Board and his previous willingness to answer questions relating to his confirmation.
“Respondent is still working as the head of a federal agency,” the judge noted.
“I am not a doctor. I do not pretend to be one,” the judge said, adding that if Fauth needs to limit stressful situations “someone might suggest one meditate or do yoga or something else. I don’t think running a federal agency is something one might recommend … to mitigate stress.”
The judge is allowing Fauth’s lawyers to work with the SEC on determining when the testimony will take place, which he suggested be the week after Thanksgiving. He ordered the parties to submit a joint status report by November 16. The judge told Fauth he could be held in civil contempt without notice if he fails to comply with the order.
The-CNN-Wire
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