Kentucky congressman James Comer traded stocks ahead of coronavirus market plunge

Weeks before U.S. stocks began to plunge in the face of a global coronavirus pandemic, Rep. James Comer placed two trades that numerous other investors would later seek to mimic.

The 1st District Republican, who ran for governor in 2015, dumped his shares of Bank of America and bought shares of Slack, an instant messaging service popular with millennials and tech startups.

This information comes as members of Congress are being scrutinized more for their Wall Street trades amid the coronavirus outbreak.

North Carolina Sen. Richard Burr, chairman of the powerful Senate Intelligence Committee, has faced calls to resign after ProPublica reported he dumped between $628,000 and $1.72 million of his investments on Feb. 13.

That was around the time Burr, a Republican, was receiving daily coronavirus briefings as a top official in Congress.

Similar, trades have placed three other U.S. senators under the microscope:

California Democrat Dianne Feinstein, another member of the Senate Intelligence Committee, sold between $1.5 million and $6 million worth of stock in Allogene Therapeutics, a California-based biotech company, the New York Times reported.

Georgia Republican Kelly Loeffler, who tweeted about attending the Jan. 24 coronavirus briefing, shortly thereafter dumped millions of dollars worth of investments, while also picking between $100,000 and $250,000 in Citrix, a teleworking stock that has since risen in value, the Daily Beast first reported.

Oklahoma Republican Jim Inhofe sold off between $180,000 and $400,000 worth of stock on Jan. 27, including shares of Apple and shopping mall owner Brookfield Asset Management, the New York Times first reported.

The senators have denied any wrongdoing.

Comer also denied wrongdoing in an interview with The Courier Journal shortly after this article was initially published online Saturday afternoon.

The congressman said his purchase of Slack stock was prompted not by any Congressional briefing, but by a suggestion from popular CNBC investing host Jim Cramer. Ordinary members of Congress weren't briefed about the coronavirus until two weeks after his purchase, Comer said.

"I would swear on a Bible I didn’t even know much more about what Slack was," he said.

Comer's most recent disclosure forms submitted to Congress show each transaction was less than $15,000.

Bank of America shares have plunged 44% since Comer offloaded his, as investors flee bank stocks because of declining interest rates and fears that the banks' borrowers won't be able to repay loans.

Slack shares, meanwhile, are up 6% since the close of trading on Feb. 3, the day Comer bought them. Comer told The Courier Journal he has actually lost money on the trade, however, since he bought shares at a high point in the day.

Experts say Slack shares are moving upward, in part, on hopes that companies will adopt the messaging service as their employees transition to working from home due to the pandemic.

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Comer, who co-sponsored a bill signed into law protecting nationwide access to school meals during COVID-19-related school closures, disclosed the two transactions on Feb. 5. That was two days after it was reported House members met behind closed doors to receive a briefing from health officials about the spread of the virus.

The congressman did not attend the briefing or any other virus-related briefing, said Matt Smith, a Comer spokesman.

"The circumstances are obviously unrelated, especially considering that unlike other politicians, he has recently bought shares of stock, not sold them," he told The Courier Journal on Friday. "Congressman Comer also continues to stand out as a leader in transparency by publicly disclosing his tax returns every year."

Earlier this month, Slack said it added 7,000 new paid customers between Feb. 1 and March 18, a 40% increase compared to recent quarters, Reuters reported. The company has also seen a spike in activity in countries impacted most by the virus outbreak, including Italy, South Korea and Japan, stock analysts say.

Read more: Why the coronavirus couldn't have come at a worse time for reeling Appalachian Kentucky

Smith said Comer, who purchased $6,000 of stock in Slack, "routinely engages in stock transaction." He said the Slack stock Comer purchased in early February "has actually declined in value since then."

Disclosures Comer provided late Saturday to The Courier Journal show the congressman bought stocks after markets began to plummet on Feb. 24.

Purchases included Apple, Bank of America, Louisville-based Republic Bank and Westlake Chemical, according to the documents, which have not yet been posted to the House website. Comer also bought shares of Pikeville-based Community Trust Bank on Feb. 21. All have declined in value.

"I understand the outrage over the senators who dumped stock, but I bought stock," said Comer, who estimated his net worth at about $4 million.

The former agricultural commissioner said the story should be about what a poor stock picker he is, adding he'd have been better off buying more cattle. He estimated he put $25,000 into the stock market and has lost nearly 30%.

Comer also provided a summary of stocks he holds in an individual retirement account that shows he's currently in red by more than $12,000.

"If I buy a stock, you can bet money it will go down," said Comer, adding that he wouldn't be buying stocks in the future for that reason as well as to avoid the appearance of a conflict of interest.

The rest of Kentucky's congressional delegation was inactive on the stock market leading up to the coronavirus plunge in late February. The only other House member to file a disclosure in recent weeks was eastern Kentucky Congressman Hal Rogers, who on Feb. 19 said in a disclosure form that he had "nothing to report."

In the Senate, Majority Leader Mitch McConnell disclosed only that his wife continued to reinvest her quarterly dividends from Wells Fargo Bank this month, The Courier Journal previously reported.

Reach Phillip M. Bailey at pbailey@courier-journal.com or 502-582-4475. Follow him on Twitter at @phillipmbailey.

Reach Alfred Miller at amiller@gannett.com or 502-582-7142. Follow him on Twitter @AlfredFMiller.

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