IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ALAN D. JACOBSON,
Plaintiff,
v.
RICHARD M. BURR,
Defendant.

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Civil Action No. _____

COMPLAINT
Plaintiff Alan D. Jacobson (“Plaintiff”) alleges the following based upon personal
knowledge as to himself and his own acts, and information and belief as to all other matters:
INTRODUCTION
1.

This lawsuit is brought to redress acts of securities fraud committed by Defendant

Richard M. Burr, a United States Senator, who has acted as a scofflaw in a time of national crisis.
On February 13, 2020, exploiting material information unavailable to the public, Senator Burr and
his wife engaged in 33 transactions by which he sold securities in a variety of publicly-traded
companies for his personal gain. In so doing, he injured shareholders—including Plaintiff Alan
D. Jacobson—who purchased and/or continued to hold securities in those same companies.
Plaintiff’s ability to procure relief in the federal courts is unimpaired by the fact that Senator Burr
is a Member of the U.S. Senate, where in his capacity as Chairman of the Senate Intelligence
Committee he learned the nonpublic material information on which he based his stock trades.

1439176.4

 2.

Senator Burr’s abuse of his powers as a U.S. Senator, at a time of national crisis, is

incidental to the relief sought herein. This suit targets Senator Burr’s self-enrichment at the
expense of members of the public; it neither infringes impeachment powers vested in the U.S.
Congress, nor rights North Carolina voters hold to elect a senator of their choosing. For the reasons
set forth below, this is a case of elementary securities fraud.
PARTIES
3.

Plaintiff Alan D. Jacobson is an individual who held shares of Wyndham Hotels &

Resorts, Inc. (“Wyndham”) at the time Senator Burr and his wife sold their Wyndham shares at
prices that, because the market did not possess the material information then known by Senator
Burr, were artificially inflated. Plaintiff has been damaged thereby.
4.

Senator Burr is, and was, at all relevant times, a United States Senator from North

Carolina. Senator Burr was and is the Chairman the Senate Select Committee on Intelligence and
is a member of the Senate Committee on Health, Education Labor & Pensions.
JURISDICTION AND VENUE
5.

This action arises under Sections 10(b) and 20A of the Securities and Exchange Act

of 1934 (“Exchange Act”), 15 U.S.C. §§ 78j(b), 78t-1(a), SEC Rule 10b-5, 17 C.F.R. § 240.10b5,
promulgated thereunder, and the Stop Trading On Congressional Knowledge Act of 2012, Pub. L.
112-105, 126 Stat 291 (“STOCK” Act).
6.

This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. § 1331 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.
7.

Venue is proper in this District under Section 27 of the Exchange Act and 28 U.S.C.

§ 1391(b)(2). Many of the acts and conduct complained of herein, including Senator Burr’s receipt

1439176.4

2

 of material nonpublic information on which he based his stock trades, occurred in substantial part
in this District.
8.

In connection with the acts and omissions alleged in this complaint, Senator Burr,

directly or indirectly, used the means and instrumentalities of interstate commerce, including, but
not limited to, the mails, interstate telephone communications, and the facilities of the national
securities markets.
BACKGROUND FACTS
9.

According to the World Health Organization (“WHO”), the worldwide outbreak of

the novel coronavirus, COVID-19, has become a global “pandemic” due to its extraordinary
“speed and scale of transmission.” The WHO Director-General has stated that the organization is
“deeply concerned by both the alarming levels of spread and severity, and by the alarming levels
of inaction.” “We have never before seen a pandemic sparked by a coronavirus . . . . We have
rung the alarm bell loud and clear.” As of the filing of this Complaint, COVID-19 has infected
more than 330,000 people and caused approximately 14,500 deaths worldwide, and
epidemiologists estimate that the number of COVID-19 cases in the world doubles every six days.
Currently, there is no vaccine available to prevent the spread of COVID-19.
10.

In the United States, fears over the spread and lethality of COVID-19 have had

devastating economic and social consequences. Large public gatherings and major events have
been canceled. Employees have been told to work from home, universities have moved all classes
online, and elementary schools have closed for sanitizing. And the Governors of six states—
California, New York, Illinois, Connecticut, Oregon, and New Jersey—have issued various types
of “stay at home” orders.

1439176.4

3

 11.

Senator Burr, who chairs the Senate Select Committee on Intelligence (the “Senate

Intelligence Committee”) and who is also a member of the Senate Committee on Health, Education
Labor & Pensions (the “Senate Health Committee”), received daily confidential updates from the
intelligence community on the COVID-19 outbreak during January and February 2020.
12.

While members of the public, including Plaintiff, were being told by the United

States government, including by Senator Burr, that the United States was prepared to face
emerging public health threats like the coronavirus and that COVID-19 would not have a
significant impact on the economy, Senator Burr was in possession of material nonpublic
information to the contrary.
13.

The Senate Health Committee, of which Senator Burr is a member, hosted a private

briefing for Senators by administration officials about the outbreak of COVID-19 on January 24,
2020. See Senate Health Committee Announces Briefing to Update Senators on Coronavirus,
Senate Health Committee on Heath, Education Labor & Pensions, Jan. 23, 2020,
https://bit.ly/2Um7r6L. Upon information and belief, during this briefing, Senator Burr was given
material nonpublic information regarding the outbreak of COVID-19.
14.

On February 7, 2020, Senator Burr assured the public that “the United States today

is better prepared than ever before to face emerging public health threats like the coronavirus.”
Sen. Lamar Alexander and Sen. Richard Burr, Coronavirus prevention steps the U.S. government
is taking to protect you, Fox News, Feb. 7, 2020, https://fxn.ws/33x0Cx. On February 12, 2020,
the Dow Jones industrial average closed at its highest-ever point: 29,551.42. The Dow had
remained steady around 29,000 for weeks.
15.

On February 13, 2020, Senator Burr and his wife collectively made 33 separate

stock sale transactions according to a period transaction report Senator Burr filed on February 27,

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4

 2020. Richard M. Burr, Period Disclosure of Financial Transactions, Feb. 26, 2020. Attached
hereto as Exhibit A is a true and correct copy of this report.
16.

The stock sales Senator Burr made represented all or most of Senator Burr’s assets.

Two years ago, “Roll Call” estimated that Senator Burr had a total net worth of about $1.7 million.
In other words, on that day in February, Senator Burr suddenly decided to liquidate virtually every
asset he owned.
17.

The following is a list of the stock that Senator Burr sold on February 13, 2020:

Company
Senator Richard Burr
1.
Abbvie, Inc. (ABBV)
2.
Axalta Coating Systems Ltd. (AXTA)
3.
Bank of New York Mellon Corp. (BK)
4.
Colfax Corporation (CFX)
5.
CenturyLink Inc. (CTL)
6.
Dorman Products, Inc. (DORM)
7.
FedEx Corp.(FDX)
8.
Fairfax Financial Holdings Ltd. (FRFHF)
9.
Mohawk Industries, Inc. (MHK)
10. 3M Company (MMM)
11. Orion Engineered Carbons SA (OEC)
12. Koninklijke Philips NV (PHG)
13. Park Hotels & Resorts Inc. (PK)
14. Everest Re Group (RE)
15. Extended Stay America, Inc. (STAY)
16. Constellation Brands Inc. (STZ)
17. Wyndham Hotels & Resorts Inc. (WH)
18. CSX Corp. (CSX)
Senator Richard Burr’s Spouse
19. Abbvie, Inc. (ABBV)
20. Axalta Coating Systems Ltd. (AXTA)
21. Bank of New York Mellon Corp. (BK)
22. CSX Corp. (CSX)
23. CenturyLink Inc. (CTL)
24. Dorman Products, Inc. (DORM)
25. Fairfax Financial Holdings Ltd. (FRFHF)
26. 3M Company (MMM)
27. Orion Engineered Carbons SA (OEC)
28. Koninklijke Philips NV (PHG)

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Sale Date

Sale Value

2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020

$15,001 to $50,000
$15,001 to $50,000
$1,001 to $15,000
$15,001 to $50,000
$15,001 to $50,000
$1,001 to $15,000
$1,001 to $15,000
$15,001 to $50,000
$1,001 to $15,000
$1,001 to $15,000
$1,001 to $15,000
$15,001 to $50,000
$1,001 to $15,000
$15,001 to $50,000
$15,001 to $50,000
$15,001 to $50,000
$15,001 to $50,000
$1,001 to $15,000

2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020

$50,001 to $100,000
$50,001 to $100,000
$15,001 to $50,000
$15,001 to $50,000
$50,001 to $100,000
$15,001 to $50,000
$15,001 to $50,000
$15,001 to $50,000
$15,001 to $50,000
$15,001 to $50,000

 29. Park Hotels & Resorts Inc. (PK)
30. Everest Re Group (RE)
31. Extended Stay America, Inc. (STAY)
32. Constellation Brands Inc. (STZ)
33. Wyndham Hotels & Resorts Inc. (WH)
TOTAL

18.

2/13/2020
2/13/2020
2/13/2020
2/13/2020
2/13/2020

$15,001 to $50,000
$50,001 to $100,000
$50,001 to $100,000
$50,001 to $100,000
$50,001 to $100,000
$628,033 to
$1.72 million

The stock sales by Senator Burr and his wife included sales of stock in Wyndham.

Senator Burr and his wife sold up to $150,000 worth of shares in Wyndham, which has lost almost
2/3 of its market value since February 13, 2020.
19.

Senator Burr’s February 13, 2020 selling spree was his largest stock selling day of

at least the past 14 months (according to a ProPublica review of Senate records). Unlike his
typical disclosure reports, which are a mix of sales and purchases, all of the transactions on
February 13 were sales.
20.

On February 13, 2020, the day that Senator Burr and his wife dumped $150,000

of Wyndham stock, Wyndham’s stock traded at a high of $59.37. Over the next several weeks,
Wyndham’s stock dropped precipitously as the market was belatedly informed of the severity of
COVID-19, as well as its potential expected impact on the economy. In particular, Wyndham, as
a hotel chain, obviously stood to lose substantial business as a result of quarantine measures,
border closures, and substantial reductions in tourism.
21.

By February 28, 2020, Wyndham’s stock price had dropped to $49.40. By March

17, 2020, Wyndham’s stock price had further dropped to $31.10. By March 19, 2020, Wyndham
stock traded at $20.61—a 65% decrease from February 13.
22.

As of the filing of the Complaint, the Dow Industrial average has lost nearly 1/3

of its value since February 13, 2020.

1439176.4

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 23.

Senator Burr’s knowledge of the devastating impact of COVID-19 on the United

States, the mitigation measures that would be taken in efforts to curtail its spread, and the coming
hit to the economy is evident not only by the fact that he received confidential briefings on COVID19 and then sold all of the shares he held in the stock market but by comments he made to a small
group of private investors.
24.

On February 27, 2020, Senator Burr, when speaking to a small private audience of

well-connected constituents, organized by the Tar Heel Circle, a nonpartisan group whose
membership consists of businesses and organizations in North Carolina, said that COVID-19 “is
much more aggressive in its transmission than anything we have seen in recent history,” comparing
it to the 1918 flu pandemic. David Merrill and Esha Day, What the Dow’s 28% Crash Tells Us
About the Economy, Bloomberg, Mar. 18, 2020, https://bloom.bg/3a9hgLY. He warned them they
should prepare for dire economic and societal effects from the spread of COVID-19. Senator Burr
advised the attendees at the luncheon: “Every company should be cognizant of the fact that you
may have to alter your travel. You may have to look at your employees and judge whether the trip
they’re making to Europe is essential or whether it can be done on video conference. Why risk
it?”
25.

Sixteen days before North Carolina closed its schools over the threat of COVID-

19, Senator Burr warned that it could happen. “There will be, I’m sure, times that communities,
probably some in North Carolina, have a transmission rate where they say, ‘Let’s close schools for
two weeks. Everybody stay home,’” he said.
26.

Senator Burr also told the luncheon attendees of the possibility that the military

might be mobilized to combat COVID-19: “We’re going to send a military hospital there; it’s
going to be in tents and going to be set up on the ground somewhere,’ Burr said at the luncheon.

1439176.4

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 ‘It’s going to be a decision that the president and DOD make. And we’re going to have medical
professionals supplemented by local staff to treat the people that need treatment.’” Weeks Before
Virus Panic, Intelligence Chairman Privately Raised Alarm, Sold Stocks, NPR, Mar. 19, 2020,
https://www.npr.org/2020/03/19/818192535/burr-recording-sparks-questions-about-privatecomments-on-covid-19.
COUNT I
Violation of the STOCK Act, Section 10(b) of the Exchange Act, and SEC Rule 10b-5
27.

Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.
28.

The STOCK Act specifically prohibits Members of Congress from using nonpublic

information for private profit and affirms that Members are not exempt from federal securities law
prohibiting insider trading.
29.

The STOCK Act affirms that “Members of Congress . . . are not exempt from the

insider trading prohibitions arising from the securities laws, including section 10(b) of the
Securities Exchange Act and Rule 10b-5 thereunder.” STOCK Act § 4, Pub. L. 112-105, 126 Stat
291.
30.

Under the STOCK Act, “each Member of Congress . . . owes a duty arising from a

relationship of trust and confidence to Congress, the United States Government, and the citizens
of the United States with respect to material, nonpublic information derived from such person’s
position as a Member of Congress . . . or gained from the performance of such person’s official
responsibilities.” 15 U.S.C. § 78u-1(g)(1).
31.

On and around February 13, 2020, Senator Burr possessed material nonpublic

information regarding the impact of COVID-19 on the United States, and in particular on the U.S.

1439176.4

8

 stock market. Senator Burr learned this material nonpublic information by virtue of his duties as
a United States Senator. Senator Burr owed a duty to Congress, the United States government,
and citizens of the United States, including Plaintiff, not to use material nonpublic information that
he learned by virtue of his duties as a United States Senator in connection with the sale or purchase
of any security. Senator Burr breached that duty by selling stock, including Wyndham stock, based
on that material nonpublic information.
32.

While Wyndham’s securities traded at artificially inflated and distorted prices,

Senator Burr personally profited by selling shares of Wyndham common stock at a price of
approximately $59.37 on February 13, 2020, while in possession of adverse, material nonpublic
information about the COVID-19. Had Plaintiff and the market known of the material nonpublic
information in Senator Burr’s possession regarding COVID-19, and on which Senator Burr traded,
Wyndham’s stock price on February 13, 2020 would have been substantially lower. Senator Burr
and his wife sold up to $150,000 of Wyndham stock on that date, and therefore he and his wife
pocketed up to $150,000 in illegal insider trading proceeds at Plaintiff’s expense.
33.

Plaintiff suffered damages because, in reliance on the integrity of the market, he

maintained his stock holdings in Wyndham at artificially inflated prices as a result of Defendant’s
violations of Section 10(b) and 20A of the Exchange Act.
COUNT II
Violation of the STOCK Act and Section 20A of the Exchange Act
34.

Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.
35.

Plaintiff purchased and continues to hold Wyndham stock. As set forth above,

Senator Burr and his wife sold Wyndham stock at artificially inflated prices based on material

1439176.4

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 nonpublic information that Senator Burr learned by virtue of his duties as a United States Senator.
Senator Burr had a duty to keep this information confidential and not to trade securities based on
that information. Senator Burr breached his duty by trading Wyndham stock on February 13, 2020
based on that information, thereby causing Plaintiff damages.

///
///
///

1439176.4

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 PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands judgment against Richard M. Burr as follows:

(1)

Awarding compensatory damages in favor of Plaintiff against Defendant
for all damages sustained as a result of Defendant’s wrongdoing, in an
amount to be proven at trial, including pre-judgment and post-judgment
interest thereon;

(2)

Awarding Plaintiff his costs and expenses in this litigation, including
reasonable experts’ fees and other costs and disbursements;

(3)

Awarding Plaintiff such other and further relief as this Court deems just
and appropriate.
DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury in this action of all issues so triable.

Dated: March 23, 2020
/S/ ERIC M. GEORGE
ERIC M. GEORGE (D.C. BAR NO. 992046)
THOMAS P. O’BRIEN (PRO HAC VICE
APPLICATION TO BE FILED)
BROWNE GEORGE ROSS LLP
2121 AVENUE OF THE STARS, SUITE 2800
LOS ANGELES, CALIFORNIA 90067
PHONE: (310) 274-7100
FAX: (310) 275-5697
EMAIL: EGEORGE@BGRFIRM.COM

1439176.4

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 Exhibit A

          

This Report ShouId Be Fired With:

PERIODIC DISCLOSURE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secretary of the Senate CKNEQ
Of?ce of Public Records OF FINANCIAL m: :5}?me
Hart Building, Suite 232 SE 19$;ng it: 513mb
Washington, 0020510 TRANSACTIONS Smemate)
9.1?ch '31 Pd [It 3
281-631, I.
lElAmendmeni Senate O?iceIAgencyinWhich Employed Page Number
Richard M. Burr 1
Report any purchase, sale. or exchange Amount of Transaction 
by you, your spouse. or dependent child .
within 30 days of receiving written Transaction
noti?cation of such transaction. Report Type 
any stocks, bonds, commodity futures,
and other securities when the amount of
the transaction exceeded $1,000. Include 8
transactionsthat resulted inaloss. Do 0 8 8 g?
not reportatransaction involving an Transaction c, 8 co)" 8
excepted investment fund, any real Date property, oratransaction between you. (Mo. Day. Yryourspouse,ordependentchild. Please 9 a 5; 0. a? b? 
ctan?fywhich two assets are involved any reportable exchange. In no event maythisdisclosurebe?led morethan45 days a?ersuchtransactionIdenti?cation of Assets (3:351:36 18M Corp. (stock) NYSE 211/1x A 
(DC) Dependent .
Child (DC) Microsoft (stock)
(J) Joint 2? 27? A 
1 ABBV (stock) NYSE 211312020 
2 AXTA (stock) NYSE 211312020 
3 BK (stock) NYSE 211312020 
4 CFX (stock) NYSE 211312020 

flit
(stock) NYSE 211312020 
1'11
34.
PORM (stock) NASDAQ 211312020 
0:21
7:53:13 X(stock) NYSE 211312020 
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8 IE (stock) 211312020 
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9 MKH (stock) NYSE 211312020 
10 (stock) NYSE 211312020 
11 DEC (stock) NYSE 211312020 
12 PHG (stock) NYSE 211312020 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1/3

 

Reporting Individual's Name

TRANSACTIONS (continued)

 

Page Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(use only if needed) 2
Amount of Transaction 
Transaction
Typem Transaction c, 0. 0. E: m- 8?8
Date ?Q588Qom~(Mo.,Day,YrSix F-eaen8>em-a>
Identi?cation ofAssets (stock) NYSE 211312020 
2 RE (stock) NYSE 211312020 
3 STAY (stock) NASDAQ 211312020 
4 STZ (stock) NYSE 211312020 
5 WH (stock) NYSE 211312020 
6 CSX (stock) NYSE 211312020 
7 (S) ABBV (stock NYSE) 211312020 
8 (S) AXTA (stock) NYSE 211312020 
9 (S) BK (stock) NYSE 211312020 
1.1
CSX (stock) NYSE 211312020 


114518) CTL (stock) NYSE 211312020 
12gb) DORM (stock) NYSE 211312020 
h;
191: 3(3) (stock) 211312020 
1:
1:3
(stock) NYSE 211312020 
15 (8) DEC (stock) NYSE 211312020 
16 (S) PGH (stock) NYSE 211312020 
17 (S) PK (stock) NYSE 211312020 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reporting lndividual's Name

TRANSACTIONS (continued)

 

Page Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(use only if needed) 3
Amount of Transaction 
Transaction
Type Transaction Date 39588q8ggv?q
(Mo.,Day.YrUm; 80.0.0005880-5
5?52 ?989?3>?63>
Identification ofAssets (stock) NYSE 21312020 
2 (S) STAY (stock) NASDAQ 211312020 
3 (S) STZ (stock) NYSE 2/13/2020 
4 (S) WH (stock) NYSE 211312020 
5
6
7
8
9
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15
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