Appeals court overturns ruling that blocked access to senator’s stock trade records

A federal appeals court on Friday overturned a judge’s ruling that blocked the public’s access to a search warrant for Sen. Richard M. Burr’s cellphone that federal investigators seized in an investigation of his stock trades.

The three-judge appeals court panel found that U.S. District Judge Beryl Howell had misapplied the law in her May order and did not take into proper account the public’s interest in the materials in denying a Los Angeles Times request to access the warrant and supporting affidavit.

The case stems from a federal investigation that began in 2020 into whether Burr, a North Carolina Republican, illegally used information from congressional briefings about the coronavirus to sell $1.65 million in stock just before the pandemic hit. Burr’s lawyers announced in January 2021 that the Justice Department had notified them it would not bring charges. The Times first reported in May 2020 that federal agents, relying on a search warrant, had obtained Burr’s cellphone as part of their investigation.

Katie Townsend, an attorney for The Times who works for the Reporters Committee for Freedom of the Press, argued at the U.S. Court of Appeals for the D.C. Circuit in early February that the public has an interest in accessing the records and that the lower court judge should not have rejected the newspaper’s request to review them.

In addition to concluding that Howell’s analysis of long-established factors in deciding whether to unseal documents was “flawed,” the appeals court also ordered her to take into consideration recent disclosures from the U.S. Securities and Exchange Commission. The commission is conducting its own civil inquiry into the stock trades by Burr and his brother-in-law, Gerald Fauth. The agency last year in court papers disclosed the investigation as part of an effort to compel Fauth to testify in its investigation.

The SEC filings noted that Burr sold $1.652 million in stocks — “all but one of the equities in his and his wife’s” retirement account — on Feb. 13, 2020, at a time when he had “material nonpublic information concerning COVID-19 and its potential impact on the U.S. and global economies.” The SEC disclosed that Fauth sold stocks shortly after speaking to Burr that same day.

The appeals court ordered Howell to reevaluate her May finding that “no disclosure of search warrant materials would be appropriate in a closed, nonpublic investigation that has not resulted in criminal charges, and where individual privacy and government interests may be implicated.”

“We’re very pleased with the outcome. I can’t say that I was surprised,” Townsend said in an interview after the arguments.

The U.S. Attorney’s Office for the District of Columbia declined to comment. Spokespeople for Burr did not respond to messages seeking comment.

Burr, who is not running for reelection, was one of several senators — including Democratic Sen. Dianne Feinstein of California — whose sale and purchase of stock at the start of the COVID-19 pandemic were scrutinized by the Justice Department to see whether they violated a congressional insider trading law. But his was the only case in which warrants were obtained. All investigations were closed without charges being filed.