In early March, the SEC temporarily lifted some requirements that publicly traded companies periodically alert shareholders to their financial health and quickly disclose significant corporate changes that could affect the stock price. Companies that can show they need extra time will be granted a reprieve for documents that should have been filed from March 1 to April 30, the SEC said.
But “given these unique circumstances, a greater number of people may have access to material nonpublic information than in less challenging times,” Avakian and Peikin said.
Corporate executives, directors, employees and consultants should remember to keep confidential corporate information private, they said. The SEC is committed to ensuring “our Main Street investors are not victims of fraud or illegal practices in these unprecedented market and economic conditions,” the statement said.
The agency delivered its warning a week after stock sales by several lawmakers, including Senate Intelligence Committee Chairman Richard Burr (R-N.C.), raised questions about whether they were influenced by private briefings on the outbreak that later led to a historic plunge in U.S. equity markets.
Burr, who had publicly expressed confidence in the country’s preparedness for the pandemic, sold up to $1.7 million in stocks last month, according to public disclosures. Burr said his trades were based solely on public news reports and asked the Senate Ethics Committee to review the transactions.
Also under scrutiny are stock sales by Sen. Kelly Loeffler (R-Ga.) and her husband, Jeffrey Sprecher, the chairman of the New York Stock Exchange. Loeffler, who sold holdings valued at between $1.28 million and $3.1 million in the weeks after a closed Senate briefing, said the sales were handled by her investment managers and she wasn’t involved.
Insider trading prohibitions apply to all members of Congress, congressional staff and other federal officials, under the Stop Trading on Congressional Knowledge (Stock) Act of 2012.