Saturday, November 28, 2020

Turkey Week: The Georgia Insiders

Never forget that Republicans are corrupt and evil as well as racist, as GOP Sen. David Perdue made millions -- a second time, mind you -- in trading COVID-19 medical stocks just days after a classified briefing on the pandemic's spread from China in January.
As the ravages of the novel coronavirus forced millions of people out of work, shuttered businesses and shrank the value of retirement accounts, the Dow Jones Industrial Average plunged to a three-year low.

But for Sen. David Perdue, a Georgia Republican, the crisis last March signaled something else: a stock buying opportunity.

And for the second time in less than two months, Perdue’s timing was impeccable. He avoided a sharp loss and reaped a stunning gain by selling and then buying the same stock: Cardlytics, an Atlanta-based financial technology company on whose board of directors he once served.

On Jan. 23, as word spread through Congress that the coronavirus posed a major economic and public health threat, Perdue sold off $1 million to $5 million in Cardlytics stock at $86 a share before it plunged, according to congressional disclosures.

Weeks later, in March, after the company’s stock plunged further following an unexpected leadership shakeup and lower-than-forecast earnings, Perdue bought the stock back for $30 a share, investing between $200,000 and $500,000.

Those shares have now quadrupled in value, closing at $121 a share on Tuesday.

The Cardlytics transactions were just a slice of a large number of investment decisions made in the early days of the pandemic by Perdue and other senators. They stirred public outrage after it became clear that some members of Congress had been briefed on the economic and health threat the virus posed. The transactions were mentioned briefly in a story published by the Intercept in May.

Now that Perdue is locked in a pitched battle for reelection in a Jan. 5 runoff, his trades during a public health and economic crisis have become an issue in what already has become a negative, expensive campaign that will determine which party controls the Senate.

There is no evidence that Perdue, who is among the wealthier members of the Senate, acted on information gained as a member of Congress or through his long-standing relationship with company officials. It’s illegal to use nonpublic information gained as a company insider or member of Congress to make investment decisions.

But legal experts say the timing of his sale, the fact that he quickly bought Cardlytics stock back when it had lost two-thirds of its market value and his close ties to company officials all warrant scrutiny.
Now Perdue says all of this is legal and he didn't do anything wrong. But the fact remains that wile COVID-19 has ripped the ground out from under tens of millions of Americans, David Perdue profited greatly and made millions, maybe tens of millions, on medical stocks. And then he lied about it to everyone, because it was Perdue himself who made these stock choices after getting "accidentally" emailed by the Cardlytics CEO.

During the campaign, Mr. Perdue disclosed in a televised ad that a “full review of his stock trades” by the Justice Department and the Securities and Exchange Commission had “cleared him completely,” but made no mention of Cardlytics or the extent of the federal scrutiny.

Mr. Grimes and Mr. Perdue had known each other since at least 2010, when Mr. Perdue joined the board of Cardlytics, then a small and privately held Atlanta start-up. Mr. Perdue resigned his directorship in 2014 after his election to the Senate, but struck an unusual financial arrangement on his way out that paved the way for him to benefit from holding a stake in the company when it went public four years later.

As a senator, Mr. Perdue continued to hold shares of Cardlytics, where executives said he had made valuable contributions to the company, along with scores of other stocks that he traded. In 2019, Mr. Grimes made the maximum donation of $5,600 to Mr. Perdue’s re-election efforts, in what appeared to be his only political contribution of the election cycle.

The email correspondence between the two men began on Jan. 21 and took place just before Mr. Perdue placed the well-timed trades.

“David, I know you are about to do a call with David Evans,” Mr. Grimes wrote from his iPad, according to a copy of the exchange reviewed by The New York Times. “As an FYI, I have not told him about the upcoming changes. Thanks, Scott.”

Mr. Evans, then the chief financial officer of Cardlytics, stepped down from that role six weeks after Mr. Grimes sent the email, at the same time that Mr. Grimes announced plans to assume a new role as executive chairman. Mr. Evans said in July that he was leaving the company.

Mr. Perdue responded to Mr. Grimes’s email by saying he would check with his Senate scheduler but “I don’t know about a call with David or the changes you mentioned.”

Mr. Grimes wrote back the next morning to apologize.

“David, Sorry. That email was not meant for you. Wrong David!” he wrote.

Mr. Perdue then contacted his wealth manager at Goldman Sachs, Robert Hutchinson, and instructed him to sell a little more than $1 million worth of Cardlytics shares, or about 20 percent of his position, three of the people said. One person familiar with the inquiry into Mr. Perdue’s trades said that the conversation was memorialized in an internal Goldman Sachs record later obtained by the F.B.I.
And he did this while sitting on his ass and helping Mitch McConnell get away with devastating Georgia's economy, while Atlanta food banks are scrambling to keep up with the newly impoverished.

Even if what Perdue did was legal, it's legal because he helped make the laws so that he could get away with it.

Vote Ossoff and Warnock in January.
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