Commerce Secretary denies ‘unfounded allegations’ of insider trading
Commerce Secretary Wilbur Ross is rejecting “unfounded allegations” that he participated in insider trading following reports in The New York Times and Forbes scrutinizing a financial transaction he took part in involving a Kremlin-linked shipping firm.
“Recent press statements have made unfounded allegations that I engaged in insider trading due to transactions related to my divestiture of stock in Navigator Holdings,” Ross said in a statement to CNN, referencing the shipping firm. “These allegations are completely false,” he said.
The statement comes after the Times reported that Ross shorted stock in the company after finding out that journalists were working on “a potentially negative story about his dealings” with the firm.
Forbes first reported the transaction on Monday. According to the Times, the transaction is worth between $100,000 and $250,000 and occurred last fall.
In his statement to CNN, Ross said, “the bottom line is that I have complied with the ethics laws of the United States.”
“Insider trading requires action be taken based on non-public information about a particular company,” Ross said. “The reporter contacted me to write about my personal financial holdings and not about Navigator Holdings or its prospects. I did not receive any non-public information due to my government position, nor did I receive any non-public information from a government employee. Securities laws presume that information known to or provided by a news organization is by definition public information. The fact that the reporter planned to do a story on me certainly is not market moving information.”
Ross said that he was not obligated to sell his shares in Navigator Holdings as a result of his ethics agreement but decided to divest “to avoid any possible perception of a conflict of interest.”
Virginia Canter, the chief ethics counsel for the watchdog group Citizens for Responsibility and Ethics in Washington, said in an interview that she believes the Times report and the commerce secretary’s response raise questions, including whether he obtained non-public information as a result of his federal employment or through his ties to the shipping firm.
Canter added that Ross’ statement on his decision to divest struck her as unusual in that she has “never, ever … heard of anyone engaging in a short sell to divest themselves of a financial interest.”