Judge orders Sen. Burr’s brother-in-law to answer questions in insider trading case

A federal judge ordered late Wednesday that the brother-in-law of Sen. Richard Burr submit to an investigative interview with the Securities and Exchange Commission regarding an inquiry about whether the senator and his family might have been involved in insider trading.

Wednesday’s hearing was in response to court filings from Oct. 22 accusing Gerald Fauth of failing to comply with a subpoena served on May 26.

The subpoena had ordered Fauth to provide three hours of investigative testimony on June 17.

The commission’s court filings said that Fauth’s attorneys have not cooperated with the subpoena citing health issues that make it difficult for Fauth to sit for long periods of time.

The commission’s attorneys added that Fauth had no issue doing so during a confirmation hearing when President Joe Biden appointed him to the National Mediation Board and that he has continued to work in that capacity.

Burr, COVID and stocks

Court filings in the case state that Burr is under investigation for using nonpublic information regarding COVID-19 to sell stocks on Feb. 13, 2020.

The filings add that Fauth and his wife, Mary, are also being investigated about whether they sold stocks because of information Burr provided them that was not publicly available.

Both actions would violate the STOCK Act.

Fauth and Burr are related to each other through Burr’s wife and Fauth’s sister Brooke.

U.S. District Judge Andrew Carter Jr. held a hearing by telephone Wednesday afternoon. In addition to ordering that Fauth comply, he also ordered a joint status report be filed on Nov. 16.

In previous court filings the commission’s counsel noted that it has made no recommendations for charges to be filed and that Fauth should not expect the interview to be adversarial.

Commission attorneys told the judge that Fauth’s counsel wanted questions and documents ahead of the testimony. They argued that providing specifics would allow Fauth to prepare his answers and undermine his credibility.

Commission attorneys said it would provide a list of topics and the documents they plan to show Fauth during his testimony but would not limit itself to just those because of possible answers he might give.

It is unclear from court documents what the judge decided on their requests to not provide all the questions and documents ahead of time.

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