BOMBSHELL: Perdue Controlled Personal Stock Portfolio All Along, Suspicious Transactions Prompted Federal Investigation [New York Times]

Perdue Received Email From Company CEO About “Upcoming Changes” Just Two Days Before Massive Stock Dump

Perdue Turned Over Hundreds Of Pages Of Information, Including Emails, “In Response To A Subpoena From A Grand Jury”

Perdue Personally Instructed His Wealth Manager To Make The Trades, “Has Been One Of The Most Active Traders On Capitol Hill” And Lied About His Money Management Arrangement With Goldman Sachs

A bombshell story from the New York Times reports an explosive detail that former corporate CEO and Senator David Perdue personally “instructed” his wealth manager to make the stock trades that prompted an investigation by the Justice Department and the FBI — directly contradicting Perdue’s repeated claims that he is “not involved” in his trades. The news came just hours after a major AP investigation into Senator Perdue’s “suspicious” stock transactions in Cardlytics, a Georgia-based financial tech company.

According to the Times, a person familiar with the senator’s Goldman Sachs money management arrangements said “Perdue retained some degree of discretion over which trades were made and when.” Perdue’s wealth manager declined to comment. This information directly contradicts the Perdue team’s repeated public response for months that the senator had no input on his financial transactions. A longtime former corporate insider and one of the wealthiest members of the Senate, Perdue “has been one of the most active traders on Capitol Hill.”

“Not only is Senator Perdue a crook fending off federal criminal investigations as he runs for re-election, he’s been lying to voters and the press all year about his financial arrangements to try to cover it up,” said DSCC spokesperson Helen Kalla. “While Senator Perdue put his stock portfolio first, he’s repeatedly fought to oppose relief for working Georgians during this pandemic. Senator Perdue is clearly in Washington for himself, not the Georgia families he’s supposed to serve.”

New York Times: Stock Trades by Senator Perdue Said to Have Prompted Justice Dept. Inquiry

By Katie Benner, Adam Goldman, Nicholas Fandos and Kate Kelly

November 25, 2020

Key Points:

• Early this year, Senator David Perdue, Republican of Georgia, sold more than $1 million worth of stock in the financial company Cardlytics, where he once served on the board. Six weeks later, its share price tumbled when the company’s founder announced he would step down as chief executive and the firm said its future sales would be worse than expected.

• After the company’s stock price bottomed out in March at $29, Mr. Perdue bought back a substantial portion of the shares that he had sold. They are now trading at around $120 per share.

• The Cardlytics transactions drew the attention this spring of investigators at the Justice Department, who were undertaking a broad review of the senator’s prolific trading around the outset of the coronavirus pandemic for possible evidence of insider trading, according to four people with knowledge of the case who described aspects of it on the condition of anonymity. Though Mr. Perdue alluded to the federal inquiry in a campaign ad this fall, its details have not been previously reported.

• Investigators found that Cardlytics’ chief executive at the time, Scott Grimes, sent Mr. Perdue a personal email two days before the senator’s stock sale that made a vague mention of “upcoming changes.” The timing of the message prompted additional scrutiny from investigators in both Washington and Atlanta.

• The federal scrutiny, which also included attention from the Securities and Exchange Commission, is the most vivid example to date of how Mr. Perdue’s complex financial interests and frequent trading have complicated his pursuit of a second Senate term.

• Democrats have used details of his trades to accuse Mr. Perdue of lining his pockets when Americans were worried about their jobs and health, and in some cases, leveled corruption charges.

• Congress’s ethics rules do not bar lawmakers from holding or trading individual stocks, but like other Americans, they are not allowed to trade on inside information. Other lawmakers have decided it is not worth the political sweat that comes with the appearance of possible conflicts of interest… But Mr. Perdue, a former executive at Reebok and Dollar General, has been one of the most active traders on Capitol Hill.

• The investigation into Mr. Perdue appears to have started in a similar fashion, but came to focus more intensely on the Cardlytics transactions.

• F.B.I. agents in Washington spoke with Mr. Perdue in June, asking him questions about his financial transactions. The extent of the conversation was unclear, according to two people with knowledge of the conversation.

• Mr. Perdue’s lawyers turned over hundreds of pages of information, including the emails with Mr. Grimes, in response to a subpoena from a grand jury.

• During the campaign, Mr. Perdue disclosed in a televised ad that a “full review of his stock trades” by the Justice Department and the Securities and Exchange Commission had “cleared him completely,” but made no mention of Cardlytics or the extent of the federal scrutiny.

• Mr. Grimes and Mr. Perdue had known each other since at least 2010, when Mr. Perdue joined the board of Cardlytics, then a small and privately held Atlanta start-up. Mr. Perdue resigned his directorship in 2014 after his election to the Senate, but struck an unusual financial arrangement on his way out that paved the way for him to benefit from holding a stake in the company when it went public four years later.

• As a senator, Mr. Perdue continued to hold shares of Cardlytics, where executives said he had made valuable contributions to the company, along with scores of other stocks that he traded. In 2019, Mr. Grimes made the maximum donation of $5,600 to Mr. Perdue’s re-election efforts, in what appeared to be his only political contribution of the election cycle.

• The email correspondence between the two men began on Jan. 21 and took place just before Mr. Perdue placed the well-timed trades.

• “David, I know you are about to do a call with David Evans,” Mr. Grimes wrote from his iPad, according to a copy of the exchange reviewed by The New York Times. “As an FYI, I have not told him about the upcoming changes. Thanks, Scott.”

• Mr. Evans, then the chief financial officer of Cardlytics, stepped down from that role six weeks after Mr. Grimes sent the email, at the same time that Mr. Grimes announced plans to assume a new role as executive chairman. Mr. Evans said in July that he was leaving the company.

• Mr. Perdue then contacted his wealth manager at Goldman Sachs, Robert Hutchinson, and instructed him to sell a little more than $1 million worth of Cardlytics shares, or about 20 percent of his position, three of the people said.

• Financial disclosure forms Mr. Perdue is required to file with the Senate show a Jan. 23 sale of $1 million to $5 million in Cardlytics stock.

• Investigators in Washington began scrutinizing Mr. Perdue in the spring; by June, the U.S. attorney’s office in Atlanta was handling the case along with prosecutors in the department’s criminal division in Washington.

• … a person familiar with the senator’s money-management arrangements with Goldman Sachs said that Mr. Perdue retained some degree of discretion over which trades were made and when…. Mr. Hutchinson declined to comment.

• If the email from Mr. Grimes was accidental, said Tai Park, a former federal prosecutor and white-collar crime partner at the law firm White & Case, Mr. Perdue “may be on firmer ground… In any event, trading on the basis of information learned from a C.E.O. of a company is exceedingly risky under any scenario and could draw attention from investigators.”

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