Daily Beast: David Perdue’s Claim to Be “Totally Exonerated” By SEC, DOJ “Explicitly” Goes Against What The Agencies Can Do

December 4, 2020

Securities law experts say the SEC is “not in the exoneration business”

Perdue has not provided any documentation to the public about the government probes into his “suspicious” stock trading

ATLANTA — A new report by the Daily Beast uncovered that contrary to Senator David Perdue’s claims in his TV ads of being “totally exonerated” by federal agencies for his “well-timed” stock trades, the conclusion of those probes without criminal or civil charges “does not amount to an exoneration—because these agencies explicitly do not issue them.” In fact, when closing a file, the SEC’s message states that doing so “must in no way be construed as indicating that the party has been exonerated.”

The report comes a week after a bombshell New York Times investigation revealed Perdue “contacted his wealth manager at Goldman Sachs” and “instructed him to sell a little more than $1 million worth” of stocks, despite Perdue insisting his stock trades were “handled by advisers who operated independently and without [his] input.”

“Not only has Senator Perdue lied about having input on his stock trades, he’s fabricating stories about federal agencies exonerating him for his wrong-doings too,” said Braxton Brewington, spokesman for the Democratic Party of Georgia. “Perdue will stop at nothing to lie to Georgians about his efforts to enrich himself and that’s why voters won’t be sending him back to Washington.”

Daily Beast: Perdue Says the SEC ‘Totally Exonerated’ Him, a Thing the SEC Cannot Legally Do

  • “Faced with a steady drip of reporting on his conspicuously timed stock trades, Sen. David Perdue (R-GA) is defending himself with a line that his biggest ally, President Donald Trump, has practically made into a mantra.”
  • ““Totally exonerated,” declares a newly released television ad from Perdue, which claims he has been fully cleared by the Department of Justice and the federal Securities and Exchange Commission. Except neither agency has that power.”
  • Both agencies probed trades Perdue made at the onset of the coronavirus pandemic, and both have reportedly concluded those probes without filing criminal or civil charges. But contrary to Perdue’s claims, that conclusion does not amount to an exoneration—because these agencies explicitly do not issue them.”
  • “The Georgia Republican, currently in the middle of a grueling runoff campaign, has not provided any documentation to the public about the government probes into his stock trading. That is possibly because any messages Perdue might have received from the feds would likely have painted a far more ambiguous picture about his activity, securities law experts told The Daily Beast.”
  • “Upon closing a file, the SEC may inform the entity being investigated that they “do not intend to recommend an enforcement action.” But the message also includes a clear caveat that the notice “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation.” Much of the time, say defense lawyers who have worked these cases, neither agency issues a letter or notice of any kind that a file has been closed, leaving them to read the tea leaves as to what investigators are up to.”
  • “There is a meaningful difference between an exoneration and a decision not to charge, say experts. “It’s good news for him, but it doesn’t exonerate him,” said Chris Bruno, a former prosecutor at the DOJ, which can bring criminal charges for insider trading. “It just means that they have not been able to find relevant evidence that would substantiate a case, at this static point in time, beyond a reasonable doubt, and that’s different from exonerating someone. They’re not saying they found evidence showing innocence.””
  • “The SEC, which can make civil charges for violations of financial rules, is “not in the exoneration business,” said James Cox, a professor of securities law at Duke University, who explained that the absence of charges against a person or company can reflect a number of calculations.”
  • “The agency prefers not to go to court without an overwhelming chance of success, said Cox. “Internally, they look at these things and say, is this a 60-40 case, or a 90-10 case… They tend to err on the 90 percent side.” Additionally, he said, the agency is highly unlikely to “make an example of a sitting senator.””
  • “Perdue’s office did not respond to a request for comment on what correspondence he received from federal investigators and why he claimed he was fully exonerated.”
  • “During the runoff campaign, both GOP senators have felt compelled to put money behind ad campaigns claiming their stock trades crossed no legal or ethical lines. Both have been under scrutiny from the press and from federal investigators for months for their offloading of certain stocks, and acquisition of others, around private Senate briefings related to the spread of the coronavirus in January.”
  • “A recent report in the New York Times found that in January, Perdue personally called his independent stockbroker and directed him to sell off $1 million in holdings in a financial company where he’d previously served on the board. Perdue, a former corporate CEO who was the Senate’s most active stock trader by far, also engaged in conveniently well-timed trades in previous years. In 2018, for example, the senator acquired stock in a contractor for the U.S. Navy as he assumed control of a Senate panel with jurisdiction over the Navy, and then sold off the stock at a profit as he worked on a bill that steered new business to the contractor, The Daily Beast reported.”
  • “After that story published, Rep. Raja Krishnamoorthi (D-IL), the chair of the House Oversight Committee’s panel on finance, wrote to the SEC requesting they probe those trades. The SEC declined to comment on the letter. It’s unclear if their previous investigation into Perdue’s trades included his pre-coronavirus activity or not, though some experts say it’s likely that regulators would have looked back at his investment history to discern patterns.”
  • ““They’ll follow where the evidence goes,” said said David Chase, a Florida defense lawyer and former SEC attorney, who said that the agency declining to bring charges indicates “they kicked the tires and are not going to pursue it.” At the same time, he made clear, “you’re never going to get an exoneration.””
  • “Perdue has decided to skip a scheduled Sunday debate with his Democratic opponent, Jon Ossoff, a move that will allow him to avoid any direct questions on his stock trading. And Perdue has stuck closely to friendly audiences since the runoff campaign began, denying national and local press the opportunity to ask about his trading and his explanation for it.”


Other News from DPG

Questions? Tips? Call anytime.

Georgia Voter Protection Line


Democratic Party of Georgia

Help us elect Democrats in Georgia.