NASHVILLE — With a global pandemic threatening to hit the United States earlier this year, U.S. Rep. Phil Roe made hundreds of financial transactions, buying stocks in companies now working on vaccines and selling other shares before a historic market plunge in March, according to a review of his financial records by The Tennessean, part of the USA TODAY Network.
While it’s unclear if the stock trades were based on information unavailable to the public, Roe's transactions occurred as Trump administration officialsheld pandemic briefings with members of Congress.
The Tennessean’s analysis showed Roe purchased stock in Zoom and Moderna, a leading company working on a coronavirus vaccine, prior to selling shares of Royal Caribbean Cruise and Disney, just days before those two companies shuttered operations due to the pandemic.
The East Tennessee Republican’s flurry of transactions included selling nearly 100 stocks over a two-day period in early March, just days before markets tanked across the globe.
Kyle Jacobs, the congressman’s spokesman, declined to answer several questions for this story but said Roe did not personally manage his investments.
“Congressman Roe does not manage his personal stock investments and uses a third party investment manager to handle personal stock purchases and sales,” said Jacobs.
Hundreds of transactions
In total, Roe’s financial maneuvers in the first quarter of 2020 included 680 transactions – both sales and purchases – involving more than 300 assets valued at between $4 million and $18.4 million.
Congressional stock reports allow members to disclose a range in the value of transactions, making it difficult to pinpoint the exact value. To prohibit insider trading, lawmakers are required to report securities transactions valued at more than $1,000 shortly after they’re made.
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The volume and types of financial activities Roe had this year is unusual compared to other members of Congress and raises questions about whether he intentionally profited off the pandemic, said Kedric Payne, legal counsel for the Campaign Legal Center, a nonpartisan Washington, D.C.-based watchdog group.
“There is nothing in the public record yet to suggest Roe had non-public material information when he made (those trades),” he said. “But you just never know what’s going to come to light.”
It is illegal for members of Congress to act on information they learn in their official capacity for personal benefit. The prohibition and required financial disclosures are part of the Stop Trading on Congressional Knowledge Act, which was signed into law in 2012.
“Without it, for example, a Senate committee chair could make money by trading in advance a bill that would materially affect a particular company, and thus create the temptation to conduct legislative activities in the way most conducive to a payoff from the trading,” said Donald Langevoort, a Georgetown University law professor who has studied insider trading for decades.
Roe, who announced in January he is not seeking reelection, is the ranking member of the House Committee on Veterans’ Affairs and serves on the Health, Employment, Labor and Pensions subcommittee of the House Committee on Education and Labor.
Roe sold stock in Disney, Royal Caribbean
One of 17 physicians in Congress and co-chair of the House GOP Doctors Caucus, Roe writes frequently about coronavirus in weekly columns he shares on his legislative website.
Roe first wrote about COVID-19 on Feb. 26, noting the origins of the virus and the Trump administration’s early efforts. When a cruise ship, with 438 Americans, including two Northeast Tennessee residents, was docked in Japan, Roe said he became involved, facilitating a phone call with key Trump administration officials.
In mid-February, Roe, along with eight other House lawmakers, wrote a letter calling for the federal government to bring those stranded on the ship back to the United States.
“I know reading news reports of a foreign virus is nerve-wracking, but I want folks to feel confident the president and our public health agencies are focused on keeping our country safe,” Roe wrote in his Feb. 26 column.
Days later, he elaborated on his comments about COVID-19, which at that point had yet to spread throughout the United States.
“I know how unsettling the spread of an unknown virus is, but I can tell you with confidence, based on information I’ve received from first-hand conversations and briefings, our government is laser-focused on ensuring the health of all Americans,” the congressman wrote on March 4.
He provided an overview of the Trump administration’s ongoing efforts while reminding Tennesseans to wash their hands, avoid touching their eyes and stay home when sick.
“Right now, it’s imperative Americans remain calm and vigilant, but also confident in our public health response to this global situation,” he wrote.
Despite his effort to allay constituents’ fears, two days later, Roe began selling stocks en masse.
On March 6, Roe unloaded stocks of about 60 companies, including Disney, Royal Caribbean Cruises, Philip Morris, Bank of America, Delta Airlines, and Chevron.
Three days later, he sold stock of nearly 40 companies, including Swatch, Nokia, Nissan, Honda and G4S, a global security company. The March 9 sales came one day after the Dow Jones Industrial Average sank more than 2,000 points, at the time the single-worst day since the 2008 recession.
In total, Roe sold 97 stocks valued at between $688,000 and $3.5 million during the two-day period. The lone stock purchase he made during that period was for natural gas company Atmos Energy.
'Earlier than the general public'
On March 11, in his website column, Roe noted the economic havoc fromthe pandemic.
“Over the past two weeks, we have seen the U.S. stock market plummet,” he wrote in his column. “However, we will not let this virus destroy the economy we worked so hard to rebuild.”
Although the stock market plunged in early March, by the middle of the month it significantly worsened as shareholders responded negatively to the rise in coronavirus cases and the federal government’s response.
By March 23, the S&P 500 was down 34% from its all-time high on nearly a month earlier, according to the Wall Street Journal. The plummet resulted in losses of trillions of dollars in U.S. companies’ market value.
Roe’s decision to sell stocks in early March prevented him from losing hundreds of thousands, if not millions, of dollars, an analysis of trades shows. Most of the stocks Roe sold in early March hit their lowest points of the year on March 18 or March 23.
When Roe sold his stock in Chevron, valued at between $15,001 and $50,000, on March 6, the company was trading at $95 a share. When the market closed the following Monday, the company was trading at $80 a share. By March 23, Chevron stock was trading at $54 a share, the company’s lowest since 2010.
Similarly, when Roe sold his stock in Delta Air Lines, also valued at between $15,001 and $50,000, on March 6, shares were trading at nearly $46. On March 12, the company dropped to $33 a share. A March 18internal memo filed with the Securities and Exchange Commission noted Delta’s revenues had fallen by $2 billion due to drops in demand amid COVID-19.
Payne, who previously worked as deputy chief counsel for the Office of Congressional Ethics, said Roe’s stock maneuvers started before the general public realized the pandemic’s severity. He said the watershed moment for most people occurred on March 11, when the NBA announced it would suspend its season after a player tested positive for the virus.
“He did start making trades earlier than the general public,” said Payne.
Early purchases of Zoom, Moderna
In early January, Roe bought between $75,001 and $950,000 in stocks.
Many of the 62 different companies he bought stock in on Jan. 6have a major presence on the Internet. They include Alphabet, Google’s parent company; Amazon; online-based pet supply company Chewy.com and retailer Wayfair; online-based car retailer Carvana; Spotify, a music streaming service; Roku, a TV streaming service; Slack, a technology-based messaging company; and Zoom, which has become a go-to resource for businesses and individuals during the pandemic.
Roe purchased more stock in Zoom on Jan. 31, one day after top U.S. health officials held a closed-door meeting with members of Congress to discuss the spread of COVID-19.
The congressman alluded to participating in such discussions in a Feb. 12 interview with the Family Research Council. “A couple weeks ago they brought all of us in the House for a briefing,” he said.
Beyond purchasing shares of online-based companies, Roe also invested in several health care and science companies that have seen their stocks later surge while working to address COVID-19.
On Jan. 6, he purchased between $1,000 and $15,000 of stock in Moderna, a biotechnology company. At the time, Moderna’s stock was trading at $18 a share.
Less than a week later, Moderna announced it was working with the U.S. National Institutes of Health to finalize a sequence to create a COVID-19 vaccine. Since then, the company launched a joint effort with the National Institute of Allergy and Infectious Diseases to begin the first human vaccine tests for COVID-19 in mid-March.
Moderna’s stock has rapidly increased, reaching nearly $85 a share last week. Moderna recently touted positive results from its first human trials for a COVID-19 vaccine. The company quickly announced a proposed public offering of $1.3 billion in shares.
Other health care-related companies Roe invested in on Jan. 6 include Veeva, Medpace, Guardant, Catalent – all of which are working on testing or vaccines for COVID-19.
Rep. Phil Roe purchased stock from the following health care and science companies. Many of them have seen their values skyrocket in recent weeks as they work on coronavirus tests and vaccines.
Jan. 6 May 22
Catalent $55.99 $78.53
Guardant $79.12 $96.79
Medpace $83.24 $92.25
Moderna $18.13 $68.99
Veeva $144.20 $202.92
It is not clear whether Roe continues to hold stock in the aforementioned health care and science companies. Last month, he asked for an extension to disclose his latest trades.
In late January, Roe also bought stock in Takeda Pharmaceutical, a company working on a blood plasma-derived therapy to combat COVID-19. He purchased additional shares of the company on Jan 30, the same day Congress was briefed by health officials.
He also bought and sold stock in Medtronic, a leading medical device company. In January, Roe sold shares of Medtronic, a company he invested in since at least a year prior. He bought additional shares of the company in March, including the day the stock hit its lowest value in more than a year. On March 23, Roe reported buying between $15,001 and $50,000 in Medtronic stock, which was trading at nearly $73 a share. Medtronic is currently trading at $99.
Roe also publicly touted a health care company, of which he owned stock, while appearing on television.
When Roe was interviewed on Fox Business on March 12, he noted he had just left a briefing with Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.
Roe mentioned Gilead Sciences, one of many companies working to create a vaccine.
“I think trials are going on right now,” he said. “Gilead Pharmaceutical is a company in China that has an anti-viral that’s being studied.”
At the time, Roe had between $16,001 and $65,000 in Gilead Sciences stock, which he purchased in April and June 2019. Roe sold some of his Gilead stock less than a week after his interview on Fox, before purchasing more on March 20.
'A savvy investor'
The volume of Roe’s trade activity this year is substantially greater than last year.
In all of 2019, Roe reported 846 financial transactions involving 277 assets valued at between $4.6 million and $21.8 million.
This year through April 2, Roe has reported 680 financial transactions involving 314 assets valued at between $4 million and $18.4 million.
The Tennessean’s analysis of Roe’s stock activity is limited to between Jan. 6 and April 2. That's because on April 15, Roe filed a request with the House clerk’s office to delay reporting more recent activity. He now has until August 13 to report his latest financial activities.
In addition, there are notable differences in the types of investments he’s made.
In 2019, Roe reported eight purchases of municipal bonds, with Tennessee-based governments, including Davidson, Lincoln, Knox, Sumner and Williamson counties. He also reported purchases of bonds with the New York City transit system, and University of Connecticut.
Roe also bought US treasury notes and bonds in 2019.
Typically viewed as safe investments, he has made no municipal or government-backed bond purchases this year.
This year, Roe has also frequently reported selling several stocks before they lost their value, only to repurchase shares days later.
He took that approach with several companies, including Exxon Mobil, Fidelity National Financial, Adobe Inc., and Facebook.
“He seems to be a savvy investor based on the frequency with which he trades and his overall portfolio,” said Payne, of the Campaign Legal Center.
Lawmakers under scrutiny
In recent weeks, several members of Congress have faced scrutiny for their stock trades amid the pandemic – although Roe has managed to avoid attention until now.
U.S. Sen. Richard Burr, R-North Carolina, has faced the most scrutiny so far, after ProPublica, The New York Times and NPR published separate stories about his financial trades and remarks related to the pandemic.
Burr recently resigned from his committee chairmanship while facing an ongoing investigation for his stock trades. His phone has reportedly been subpoenaed by the Department of Justice.
To determine the scope of Roe’s trades, The Tennessean examined hundreds of pages of PDFs found in the U.S. House of Representatives’ financial disclosure database. In total, the month-long analysis required manual input of more than 1,500 stock trades Roe made between January 2019 and April.
A separate analysis by the Campaign Legal Center found Roe had more cumulative transactions – 366 – than any other member of Congress between Feb. 2 and April 8. After Roe, Rep. Gilbert Cisneros, D-Calif., had the second most transactions. His 219 trades were valued between $1.9 million and $6.7 million.
Sen. Kelly Loeffler, R-Georgia, had the highest value in trades, according to the Campaign Legal Center’s analysis. The 47 financial transactions she reported ranged in value between $18 million and $87 million. Loeffler’s husband is the chairman of the New York Stock Exchange. Like Burr, Loeffler has faced scrutiny for her trades and since said she will divest from individual stocks in favor of exchange-traded funds and mutual funds.
Roe’s trades had an estimated value of between $2.4 million and $10.6 million – the second most of any member of Congress.
By comparison, Burr’s trades had an estimated value of between $628,000 and $1.7 million. The Department of Justice and the Securities and Exchange Commissioner have launched probes of Burr, who recently resigned from his committee chairmanship.
Langevoort, the Georgetown professor, said the federal agencies would be looking into what was said at any briefings to determine whether it was “truly material.”
He said such investigations could include obtaining phone records and possibly subpoenaing stock brokers and others to testify about any communications.
“Defense lawyers will focus on showing other sources in the press, internet, securities analysts, etc. who were raising alarms about the virus so that the briefing conferred no special advantage,” said Langevoort. “That's a fine line, and again, usually for the jury if there is an indictment or a complaint that leads to a trial.”
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Reach Joel Ebert at firstname.lastname@example.org or 615-772-1681 and on Twitter @joelebert29.