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Richard Burr to step down as Senate Intel Chair amid stock sale probe

Yahoo Finance’s Alexis Keenan joins Zack Guzman to discuss CBS reporting Senator Richard Burr’s phone was seized in an FBI investigation over insider trading allegations.

Video Transcript

ZACK GUZMAN: Welcome back to live market coverage here on Yahoo Finance. Today, we got some interesting updates in the case and allegations against Senator Richard Burr, the Senate Intelligence Committee chairman as of this morning around allegations considering tying him to insider trading in the wake of information gathered around the coronavirus pandemic today.

Senate Majority leader Mitch McConnell saying that Burr has agreed to step down as Intel chair during the prudency of this investigation. For more on that, I want to get to Yahoo Finance's Alexis Keenan who has the details on that front. Alexis.

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ALEXIS KEENAN: Hi, Zack. So we won't go as far yet to say that these are official allegations. What we're learning is coming from the "LA Times," and they are reporting that the FBI obtained two different search warrants in order to look into these claims that there may have been some inappropriate trading in connection with COVID-19 information that Senator Burr and other members of Congress would have been getting around the time when the US was starting to learn more about how the virus might impact the US.

Now, the first warrant is said to have been served on Apple, actually. In recent days is the way that the "LA Times" puts it. They say that what they're looking for from Apple is to go into Burr's iCloud account. Now, also another warrant already issued as of yesterday evening to seize Burr's mobile phone. Supposedly the information for the phone was substantiated by the warrant that was served on Apple.

Now, it's really a different beast when you're talking about getting search warrants-- prosecutors getting search warrants-- actually granted for members of Congress. They require an extra layer of really authority here. So instead of just requiring probable cause, which all search warrants would require, they also need to get the blessing of the Department of Justice's public integrity unit.

In addition, it also has to be signed off on by DOJ high-ranking members. So this is a really special kind of warrant and take some extra legwork here by prosecutors. Now, the Justice Department is said to be investigating what we know, because they're publicly disclosed 33 different stock transactions that Burr executed on February 13.

The range-- what we get from these disclosures-- the public disclosures-- is a range. And the range is between $628,000 and $1.72 million. We don't know the exact amount of these transactions. But to give you some context for what was going on at that time on February 13, at that time, Burr would have been already receiving daily briefings from health officials in the administration because he is chair of the Senate Intelligence Committee.

He also sits on a committee for health. And so he would have also had another briefing that would have happened the day before these transactions from that separate health committee. So the timing of the transactions is about a week before the market went into that very, very steep decline-- that 29%, 30% that we're all so familiar with now.

In his defense, though, Burr did issue a statement back on March 20. And I want to read to you what he said. He said "I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13." He then went on to say that he was looking to information that was coming out of CNBC from its Asia bureaus and that he had-- he did. He called on a full investigation from the Ethics Committee.

So where investigators would be looking to look at the law that would be in connection with this investigation has to do with what's called the Stock Act. And that was a law that was passed in 2012. It was a 96-3 vote in the Senate. And this is one that Burr opposed.

What it does is to attach responsibility for Congress members to be-- if they're fiduciaries, and they have material information just like a corporate officer would that they have a duty not to disclose, this law attaches to Congress members and says, you know, you're not allowed to do that either. And we can prosecute if we find the right evidence. Zack.

ZACK GUZMAN: Yeah, and very interesting updates that necessarily aren't shaping up in his favor as, again, stepping down as Intel chair. But Alexis Keenan bringing us those updates there.