Eric Thayer/Reuters
- Sen. Elizabeth Warren wants an investigation into whether elite investors profited from private concerns voiced by Trump administration officials.
- The New York Times reported Wednesday that officials told the board of the Hoover Institution in February that they were concerned about the impact of the pandemic, despite painting a rosier picture in public.
- These concerns were circulated around investors, and some of them adjusted their portfolios accordingly, The Times reported.
- Warren said the incident “appears to be a textbook case of insider trading,” and called on regulators to review the information provided to investors and the trading that happened afterwards.
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Sen. Elizabeth Warren is demanding an investigation into whether Wall Street investors violated trading laws by acting on private COVID-19 concerns from the White House.
The New York Times reported Wednesday that top US officials told the board of the Hoover Institution in February that they were concerned about the impact of the coronavirus pandemic, despite painting a rosier picture in public.
The concerns were detailed in a memo that spread through the hedge-fund industry, causing a reaction among investors, the paper said. One told The Times that their reaction was to “short everything.”
Warren said the incident “appears to be a textbook case of insider trading,” in a letter to the Securities and Exchange Commission and Commodity Futures Trading Commission first seen by CNN.
The Massachusetts Democrat urged the Commissions to review the private information provided to investors and the trading that happened afterwards.
Warren also wants the financial regulators to find out which US officials provided the information to investors, who received the information, and how the information differed from the public comments made by the Trump administration.
"If this report is accurate, it represents an appalling abdication of duty by President Trump and top officials in his administration," Warren wrote.
"Numerous investors may have used this early and insider information about the looming, tragic economic and public health consequences of the pandemic to extract profits for themselves."
On television in February, Larry Kudlow, President Donald Trump's top economic advisor said the US has "contained" the coronavirus. "I won't say 'airtight,' but it's pretty close to airtight," he said.
The same day, Kudlow addressed board members of the conservative Hoover Institution, saying COVID-19 was "contained in the US, to date, but now we just don't know," the Times report said.
William Callanan, a hedge fund consultant, noted down these comments, which then reportedly spread to top investors, the report said.
Callanan wrote in a memo at the time that almost every administration official addressed the virus "as a point of concern, totally unprovoked," according to The Times.