{"id":903,"date":"2020-12-03T11:00:33","date_gmt":"2020-12-03T11:00:33","guid":{"rendered":"https:\/\/www.radiofree.org\/?p=131416"},"modified":"2020-12-03T11:00:33","modified_gmt":"2020-12-03T11:00:33","slug":"goldman-sachs-log-exposes-david-perdue-stock-trading-claim-as-a-lie","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2020\/12\/03\/goldman-sachs-log-exposes-david-perdue-stock-trading-claim-as-a-lie\/","title":{"rendered":"Goldman Sachs Log Exposes David Perdue Stock Trading Claim as a Lie"},"content":{"rendered":"
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Georgia Sen. David<\/u> Perdue initiated the well-timed sale of more than $1 million worth of stock in the tech-banking firm Cardlytics, according to a report <\/a>from the New York Times, despite previous claims made by Perdue that an outside adviser makes his trades.<\/p>\n

Perdue, who sat on the board of Cardlytics before entering office, came under scrutiny this year for trades that occurred in the weeks before the coronavirus shutdown \u2014 and also just prior to the CEO of Cardlytics stepping down. This past spring, when Perdue was questioned about the curiously timed trades, he said through a spokesperson that his trades were made by an independent financial adviser, and therefore couldn\u2019t be the result of any inside information he had obtained.<\/p>\n

\u201cSince coming to the U.S. Senate, Senator Perdue has always had an outside advisor managing his personal finances, and he is not involved in day-to-day decisions,\u201d Perdue spokesperson Casey Black told The Intercept in March in response to questions about his trading stocks in the run-up to the pandemic-fueled market crash. Asked specifically about the Cardlytics transactions, Black reiterated that \u201coutside, independent financial advisors manage [Perdue\u2019s] retirement savings.\u201d<\/p>\n

Yet that Perdue claim is a lie: According to the recent report in the Times, Perdue ordered the trades himself.<\/p>\n

On January 21, Cardlytics CEO Scott Grimes emailed Perdue. \u201cDavid, I know you are about to do a call with David Evans,\u201d Grimes wrote. \u201cAs an FYI, I have not told him about the upcoming changes. Thanks, Scott.\u201d<\/p>\n

Evans was the company\u2019s chief operating officer. Any \u201cchanges\u201d significant enough to be kept from the COO would be likely to move the stock.<\/p>\n

Perdue replied: \u201cI don\u2019t know about a call with David or the changes you mentioned.\u201d<\/p>\n

The next morning, Grimes wrote back: \u201cDavid, Sorry. That email was not meant for you. Wrong David!\u201d<\/p>\n<\/div>\n

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Either Perdue knew about the changes and was creating a record that could enable him to deny such knowledge, or he did not know about the changes and wanted to be clear he had no such knowledge.<\/p>\n

Whether the message had truly been sent in error or not, Perdue acted shortly thereafter. \u201cMr. 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,\u201d the Times reported, citing three sources. \u201cOne person familiar with the inquiry into Mr. Perdue\u2019s trades said that the conversation was memorialized in an internal Goldman Sachs record later obtained by the F.B.I.\u201d<\/p>\n

Five weeks later, the company announced<\/a> Grimes was stepping down amid a shake-up of the leadership team, which also included COO Evans, and the stock tanked \u2014 falling by nearly two-thirds in two weeks.<\/p>\n

The records, including Perdue\u2019s email exchanges, were obtained through grand jury subpoenas as part of an investigation that started earlier this year when a handful of Republican senators came under scrutiny<\/a> for stock trading<\/a> at the beginning of the pandemic. The Intercept\u2019s first investigation into Perdue\u2019s trading was published in May, and Perdue was questioned by the FBI in June; the grand jury declined to indict the senator.<\/p>\n

Perdue\u2019s spokesperson did not immediately respond to a follow-up request for comment. Perdue\u2019s spokesperson had previously told The Intercept that Perdue was acting on advice from October 2019 to sell Cardlytics shares, a claim repeated to the Times.<\/p>\n

Perdue, who is facing a runoff against Jon Ossoff<\/a> in January, has since been running an ad<\/a> boasting of having been \u201ctotally exonerated.\u201d Perdue bested Ossoff by about 88,000 votes in November but fell just shy of the 50 percent margin needed to avoid a runoff.<\/p>\n<\/div>\n

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As The Intercept previously reported<\/a>, on March 18, when Cardlytics stock was bottoming out under $30, Perdue bought back the bulk of the shares he had sold \u2014 but this time getting them at a steep discount, investing between $200,000 and $500,000 back into the company, according to Senate disclosures. The stock has seen explosive growth since, currently selling at around $115 per share.<\/p>\n

Grimes, who is now executive chair of the board, also gave $5,600, the maximum allowable contribution by individuals, to Perdue\u2019s campaign in 2019, his only contribution to any candidate in the 2020 cycle. Most of the executives involved in that corporate restructuring had helped Perdue win his race in 2014, contributing $24,500, according to campaign finance reports.<\/p>\n

That Perdue owned so much Cardlytics stock at all was itself thanks to the generosity of the company\u2019s board. Perdue received stock options in the company for serving on its board, but those options were worthless when he was elected to the Senate in 2014, because the company had yet to go public. The Cardlytics board bailed Perdue out by extending the deadline for exercising his options by years. As The Intercept reported<\/a> in May:<\/p>\n

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According to filings with the SEC, Cardlytics \u201caccelerated Mr. Perdue\u2019s options\u201d \u2014 which means he was fully granted the ones that had yet to vest \u2014 \u201cand extended the post-termination exercise periods applicable to Mr. Perdue\u2019s option grants to October 12, 2020 and January 25, 2022.\u201d Having extra time to exercise the options gives the stock more opportunity to rise, and gives Perdue more time to decide whether to exercise them, thus dramatically reducing his risk. According to his Senate financial disclosure reports, Perdue had the option to purchase the stock at two separate prices, known as strike prices: 59 cents and $1.11. When the value of the company rises above the strike price, the options are said to be \u201cin the money.\u201d<\/p>\n

Brian Foley, an executive compensation consultant and managing director of the firm Brian Foley & Company, said that allowing Perdue to leave with all of his options in 2014 was generous of the board, but an understandable decision. Allowing him to stretch the time he had to exercise the options out to 2020 and 2022, he added, was extraordinary, as Cardlytics was not yet a public company, and that window allowed him many years to wait for the company to go public and its stock to rise before deciding whether to exercise his options.<\/p>\n<\/blockquote>\n

Cardlytics, part of the nascent financial technology industry, collects and analyzes personal consumer and banking data, using financial transaction history to help companies tailor their personalized marketing efforts. That practice puts it up against a host of privacy regulations, and the company proudly markets its ability to stay within the law as a prime selling point. Perdue serves on the Senate Banking Committee and has worked to roll back regulations that govern firms like Cardlytics. Such conflicts of Perdue\u2019s have recently been investigated by the New York Times <\/a>and the Daily Beast<\/a>.<\/p>\n<\/div>\n\n

This post was originally published on Radio Free<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

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