WASHINGTON (AP) — 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 /zigman2/quotes/210598065/realtime DJIA +0.48% 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 plummeted, 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 /zigman2/quotes/210365863/composite CDLX +2.46% have now quadrupled in value, closing above $123 a share on Wednesday.
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 re-election 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.
“This does seem suspicious,” said John C. Coffee Jr., a Columbia University law professor who specializes in corporate and securities issues. But, he added, “You need more than suspicions to convict.”
The Perdue campaign declined a request for an interview with the senator. In a statement, Perdue spokesperson John Burke said the senator had been cleared of wrongdoing but did not provide details.
“The bipartisan Senate Ethics Committee, DOJ and SEC all independently and swiftly cleared Senator Perdue months ago, which was reported on,” Burke said.
Perdue’s opponent, Democrat Jon Ossoff, has seized on his stock trading while trying to brand him as a “crook.”
Perdue is not the only senator on the ballot in Georgia. Sen. Kelly Loeffler, also a Republican, is running against Democrat Raphael Warnock in a bid to complete the remainder of retired Sen. Johnny Isakson’s term.