David Perdue, the Georgia Republican facing a second round Senate election on Tuesday, twice bought a significant number of shares in a U.S. bank shortly after meeting with financial lawmakers, raising more questions about his prolific stock trading while in office.
In one case, in May 2015, Perdue bought between $ 15,000 and $ 50,000 in shares of Regions Financial Corporation two days after a 10-minute call with then-Treasury Secretary Jack Lew.
Perdue bought additional shares in the bank two years later, on May 18, 2017, two days after a half-hour meeting with then Federal Reserve Chairman Janet Yellen.
It is not clear in either case whether Perdue discussed relevant financial regulations or other market-sensitive issues with Lew or Yellen or whether the discussions influenced his decision to buy the shares.
At the time of the call with Lew, members of the Senate banking committee, of which Perdue is a member, were talking about a possible trade deal.
But the purchase of more Regions shares following Perdue’s meeting with Yellen – who will be appointed to serve as Treasury secretary by Joe Biden once President-elect takes office – is possibly significant, because it happened about two months before Yellen publicly discussing its support for raising the $ 50 billion asset limit for systemically important institutions, a change that meant that Regions Bank could see a relaxation of important financial regulations.
As Yellen’s views on the matter publicly evolved in his role as Fed chairman, so did Perdue’s stock buildup in the regions. Perdue separately sought to promote deregulation legislation favorable to banks like Regions, which Regions and more than a dozen other banks have publicly endorsed.
Public records show that Perdue sold its full stake in Regions on October 11, 2019 and on October 23, 2019, suggesting that Perdue may have obtained a 21% return on his previous investment. He then bought more shares in November 2019 and January 2020.
John Burke, Perdue’s communications director, said Perdue does not deal with day-to-day decisions about its portfolio, which Perdue says is managed by outside financial advisors.
It is not uncommon for lawmakers like Yellen to meet with senators. On the day of his meeting with Perdue in 2017, Yellen also met Lord Mervyn King, the former governor of the Bank of England, had lunch with Treasury Secretary Steve Mnuchin and then met with another senator, Ohio Democrat Sherrod Brown .
Former government officials say lawmakers try to be cautious at such meetings and avoid sharing information that could move markets. At the same time, it can be difficult to avoid sharing potentially valuable information if senators and policymakers are discussing any issue in depth, and a senator may be able to assess an evolving political position that may be sensitive to the market.
The new revelations come at a time when the frequent trading of Perdue’s shares while in office came under increasing scrutiny in the press ahead of his election to the Senate on Tuesday. If Democrats win two run-off elections, it will transfer Senate control from Republicans to Democrats.
Previous media reports focused on how Perdue faced federal scrutiny for his frequent stock trading while in office and whether his position as a senator with access to confidential market information, especially during the pandemic, may have influenced some businesses. The New York Times, citing several anonymous sources, said that the $ 1 million sale of Perdue’s shares in a financial company called Cardlytics, where he served on the board, caught the attention of Justice Department investigators last spring who were assuming “the broad review of the senator’s prolific trade around the start of the coronavirus pandemic for possible evidence of domestic trade”.
The investigators concluded that a personal message sent to Perdue by the company’s chief executive, alluding to “future changes”, was not “non-public information” and refused to process the charges. Perdue sold his shares two days after receiving the CEO’s personal message. About six weeks later, the chief executive resigned and the company revealed that the results were below expectations, causing the shares to plummet.
The New York Times reported separately that, as a member of the Senate cybersecurity committee, Perdue and others sought to protect the National Guard from data breaches. The newspaper said that as of 2016, Perdue bought and sold shares in a cybersecurity company called FireEye on 61 occasions. Almost half of those negotiations, the New York Times reported, took place while Perdue was on the cyber security committee, which could have given him access to confidential information.
Perdue’s Senate campaign did not respond to the Guardian’s request for comment. He previously denied having any conflict of interest.
But Perdue’s opponent in the senator’s second round this week, Democrat Jon Ossoff, raised the issue several times and accused Perdue of using his position to get rich.
Perdue’s spokesman called the criticisms “unfounded” and emphasized that he was “totally exonerated” by federal investigators.