Ethics group urges probe of Corker stock trades
Photo: Chip Somodevilla, Getty
WASHINGTON — A new ethics watchdog group in Washington is asking the Securities and Exchange Commission and the Senate ethics committee to investigate whether Sen. Bob Corker had access to inside information when he profited from stock trades involving a Chattanooga real estate company.
The Campaign for Accountability, a nonprofit formed in 2015 that targets elected officials, filed the complaints Tuesday based largely on a Nov. 3 Wall Street Journal story showing Corker, R-Tenn., made well-timed trades in a company he did business with years ago. Corker did not disclose some of the transactions until the newspaper inquired about them.
“In essence, Sen. Corker bought low, sold high, and failed to disclose his profit in the prescribed time period,” according to the complaint.
It alleges Corker was tipped off by insiders at CBL or at the firm that issued stock ratings for CBL.
“Based on his trading pattern, it appears that on several occasions Sen. Corker likely received material, non-public information … and the senator then used that information to place timely trades on CBL securities,” according to the complaint.
Corker’s office said his investments in CBL & Associates have been public knowledge since 2007 when he joined the U.S. Senate, and the financial disclosure omissions were a “technical oversight” that has since been corrected.
“These baseless accusations from a political special interest group are categorically false and nothing more than a smear campaign,” said Corker spokeswoman Tara DiJulio.
Corker’s trading in CBL shows a pattern of big-dollar transactions that either reaped huge profits or shielded him from heavy losses, according to the Wall Street Journal, which first looked at Corker’s CBL trading in 2011.
In one newly disclosed case, Corker bought between $1 million and $5 million in CBL shares in 2011 and sold them five months later for a 42 percent gain. Members of Congress are required to report their financial holdings and transactions, but only in broad ranges.
Corker, the former mayor of Chattanooga, once worked for a company that did construction work for CBL, and CBL executives would later donate to his political campaigns.
The Wall Street Journal reported that Corker made between $1 million and $5 million on his CBL trades in 2010 and 2012.
Some of the trades cited were timed closely to changes in CBL’s stock rating, the paper reported. For example Corker bought between $3 million and $15 million in CBL in three transactions in June and July 2010. One day after the last trade, the stock’s outlook was upgraded, and when he started selling it soon afterward, it had risen 18.3 percent.
DiJulio said the omissions on the disclosure form were made by Corker’s accounting firm.
“The accounting firm that worked on his financial disclosure reports properly listed the sale and gain or loss of transactions, but some did not list the day they were purchased, so after completing a full review, we are correcting this technical oversight,” she said.
Congress in 2012 passed the Stop Trading on Congressional Knowledge (STOCK) Act, which made clear that members of Congress are subject to existing laws against insider trading. The law was in response to allegations that some members had used non-public information about the economy to inform their trading decisions.
The Campaign for Accountability is led by the former chief counsel at Citizens for Responsibility and Ethics in Washington, which last year became affiliated with Democratic operative David Brock, an ally of presidential candidate Hillary Clinton.
Two members of the advisory board for the Campaign for Accountability have past ties to the Democratic Party. But the group says it is nonpartisan and has filed complaints against Republicans and Democrats, including in October when it asked for an investigation into a bipartisan group of House members who accepted donations from the payday loan industry.