The Securities and Exchange Commission has closed an investigation into former Senator Richard M. Burr that examined whether a series of stock sales he made in early 2020 after being briefed on the threat of Covid-19 were improper, Mr. Burr and his lawyer said on Friday.
“This week, the S.E.C. informed me that they have concluded their investigation with no action,” Mr. Burr said in a statement. “I am glad to have this matter in the rearview mirror.”
Mr. Burr, a Republican from North Carolina, retired when his term ended at the beginning of this year.
No details were provided on why the commission elected to close the inquiry without filing charges. A spokesman for the agency said it does not comment on the opening or closing of investigations.
A parallel Justice Department inquiry into Mr. Burr’s sales was also closed in January 2021 without charges, even after federal investigators found that Mr. Burr had averted $87,000 in losses with what a government affidavit described as “well-timed stock sales.”
The S.E.C.’s investigation into Mr. Burr, who sat on the Senate intelligence and health committees during his time in office, stemmed from a series of private briefings he received early in 2020 on the threat of the coronavirus pandemic. During that time, the illness was spreading rapidly abroad, but its potential impact on the U.S. and its economy was not well understood.
On Feb. 13, 2020, just days after the briefings occurred, Mr. Burr sold more than $1.6 million in stocks in a flurry of transactions. That same day, Mr. Burr also spoke by telephone to his brother-in-law Gerald Fauth, according to federal court filings; shortly after that call, Mr. Fauth apparently directed a broker to sell stocks in his wife’s account, the filings said.
Though Mr. Burr did not contest that he sold much of his portfolio out of concern for the spreading pandemic, he insisted that he made his trading decisions based entirely on news reports, not special briefings he received as a senator.
The S.E.C. investigated both Mr. Burr and Mr. Fauth to determine whether they engaged in insider trading. Lawyers for Mr. Fauth argued that he had planned his trades days in advance and had initiated the trades with his broker on Feb. 12, the day before the call with Mr. Burr. The S.E.C. spent months arguing with lawyers for Mr. Fauth over whether he was obligated to comply with a subpoena for testimony in the matter. Late last year, a judge compelled Mr. Fauth to respond.
F. Joseph Warin, Mr. Fauth’s lawyer, said on Friday that the commission’s investigation into his client had also been closed.
“We are thrilled that the S.E.C. and the DOJ appropriately closed their investigations without any findings of insider trading,” Mr. Warin wrote.
Ethics experts said the closure of the investigations underscored the challenges of assessing trading by lawmakers who buy and sell individual stocks and other securities even as they sit on influential committees and attend private briefings on significant matters.
Donald K. Sherman, chief counsel of the organization Citizens for Responsibility and Ethics in Washington, said the closure of the Burr matter “suggests to me that the speech or debate protections make it very hard to prosecute or sufficiently investigate cases of alleged insider trading and wrongdoing when the underlying facts or inside information relate to a member’s job.”
He was referring to a constitutional clause that is meant to shield federal lawmakers from criminal prosecutions or civil actions related to their legislative work.
“It is exactly why Congress should immediately pick up legislation to ban members from buying and trading individual stocks because reform is needed, regardless of whether Senator Burr’s review is concluded or not,” Mr. Sherman said. Proposals to ban or more fully disclose stock trading by members of Congress have stalled in both the House and the Senate.
A recent New York Times investigation of congressional financial disclosures showed that between 2019 and 2021, 97 senators or representatives reported trades by themselves or immediate family members in stocks or other financial assets that intersected with the work of committees on which they served — though most of those lawmakers defended their trades as proper.