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Law360 (May 1, 2020, 10:10 PM EDT ) A Wyndham Hotels & Resorts Inc. shareholder told a D.C. federal court Friday that he's dropping his suit accusing U.S. Sen. Richard Burr of unlawfully unloading his stock holdings just before the coronavirus pandemic roiled the U.S. economy.
Alan D. Jacobson had called the North Carolina Republican lawmaker "a scofflaw in a time of national crisis" for selling up to $1.7 million in stock on Feb. 13, after receiving confidential briefings about the potential impact of COVID-19's spread and while he was assuring the public that the U.S. was equipped to handle the pandemic.
But on Friday, Jacobson announced he'd be dismissing the suit without prejudice, "in consideration of the effect that this lawsuit may have on any pending criminal or civil investigation into defendant Richard M. Burr's conduct by the U.S. Department of Justice and the U.S. Securities and Exchange Commission, as well as the effect those investigations will have on the discovery process in this action."
Jacobson was the first to accuse Burr of "exploiting material information unavailable to the public" in a lawsuit, but the Senate Intelligence Committee chairman came under fire in March after a pair of nonprofits reported that he and his wife had sold stock holdings valued at between $628,000 and $1.72 million.
The sales have received criticism even from GOP allies, including Fox News host Tucker Carlson, who called for Burr's resignation if he could not explain the stock dump. Burr took to Twitter in March to say that he had relied solely on public news reports in deciding to sell his holdings and has asked the Senate Ethics Committee to open a review of the matter.
Among Burr's sales was up to $150,000 worth of stock in the Wyndham hotel chain, which Jacobson's suit said lost nearly two-thirds of its value between when Burr sold his shares Feb. 13 and when the complaint was filed March 23.
The suit alleged that Burr, who is also a member of the Senate Committee on Health, Education Labor and Pensions, received daily confidential updates from the intelligence community about the COVID-19 outbreak in January and February while the federal government was telling the public that the pandemic would not significantly impact the U.S. economy. On Feb. 7, Burr penned an op-ed on Fox News stating that "the United States today is better prepared than ever before to face emerging public health threats like the coronavirus."
Less than a week later, Burr and his wife made 33 separate transactions that unloaded "all or most" of Burr's assets in what the complaint called "his largest stock selling day of at least the past 14 months."
The lawsuit claimed violations of the STOCK Act, which prohibits members of Congress from exploiting private information derived from their position for personal gain, and sought compensatory damages sustained as a result of Burr's alleged wrongdoing.
Jacobson is represented by Eric M. George and Thomas P. O'Brien of Browne George Ross LLP.
Counsel information for Burr was not immediately known.
The case is Jacobson v. Burr, case number 1:20-cv-00799, in the U.S. District Court for the District of Columbia.
--Editing by Breda Lund.
For a reprint of this article, please contact reprints@law360.com.
