Sen. Thom Tillis called on the House Ethics Committee to investigate allegations that his fellow North Carolina Republican, Rep. Madison Cawthorn, engaged in an insider trading scheme.
Multiple government watchdog groups told the Washington Examiner earlier this week that Cawthorn’s public statement that he owns the Let’s Go Brandon cryptocurrency meme coin, combined with his close relationship with the coin’s ringleader, suggest the lawmaker may have had advanced nonpublic knowledge of a Dec. 30 announcement that caused the coin’s value to spike by 75%.
“Insider trading by a member of Congress is a serious betrayal of their oath, and Congressman Cawthorn owes North Carolinians an explanation,” Tillis said Wednesday. “There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee.”
Insider trading by a member of Congress is a serious betrayal of their oath, and Congressman Cawthorn owes North Carolinians an explanation. There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee. #ncpol https://t.co/3s1UJMk1tj
— Senator Thom Tillis (@SenThomTillis) April 27, 2022
Tillis has criticized Cawthorn in the past, saying in late March that the freshman representative has “fallen well short of the most basic standards Western North Carolina expects from their representatives.”
MADISON CAWTHORN IMPLICATED IN POTENTIAL INSIDER TRADING SCHEME, EXPERTS SAY
Cawthorn was pictured posing with LGBCoin ringleader James Koutoulas at a party on Dec. 29. The North Carolina lawmaker responded to the picture on Koutoulas’s Instagram page that evening, saying: “LGB legends. … Tomorrow we go to the moon!”
The next day, LGBCoin did exactly as the lawmaker predicted.
NASCAR driver Brandon Brown announced on Dec. 30 in a statement that featured comments from Koutoulas that the meme coin, which is a reference to the chant mocking President Joe Biden, would be the primary sponsor of his 2022 season.
“This looks really, really bad,” Dylan Hedtler-Gaudette, the government affairs manager for the watchdog group Project on Government Oversight, previously told the Washington Examiner. “This does look like a classic case of you got some insider information and acting on that information. And that’s illegal.”
Cawthorn said in February at the Conservative Political Action Conference that he’s “got Let’s Go Brandon coin” and that it’s “working out well, very well.”
LGBCoin was trading at about 93% below its peak price when Cawthorn said the coin was doing “very well” for him.
Lawmakers are required to disclose if they purchase over $1,000 worth of any cryptocurrency, but Cawthorn has not filed any disclosures indicating he owns LGBCoin.
Koutoulas told the Washington Examiner that LGBCoin is not classified as a security for regulatory purposes.
“It is not technically or legally possible for a decentralized meme coin that exists to promote free speech and charitable giving to be classified or treated as a security,” Koutoulas said.
However, experts said that even if LGBCoin isn’t considered a security, that wouldn’t render Cawthorn immune from insider trading laws.
“No matter what, though, having advance and nonpublic information that is then used to gain advantage in a financial market (including straight-up commodities) is illegal, making my call for DOJ or SEC investigation still operative in this case,” Hedtler-Gaudette said.
Cawthorn faces seven Republican primary challengers in the May 17 primary for North Carolina’s newly redrawn 11th Congressional District.
The beleaguered lawmaker was cited by authorities on Tuesday for trying to bring a handgun past a security checkpoint at Charlotte Douglas International Airport. It’s the second time Cawthorn has tried to bring a gun into an airport during his 15 months in Congress.
Cawthorn, who did not respond to inquiries from the Washington Examiner about his statements surrounding LGBCoin, said in a video statement Tuesday evening he’s the target of a coordinated smear campaign by establishment Republicans seeking to quash his reelection bid.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
“We have the North Carolina political establishment, and one [Republican in name only] senator who have really targeted me and are coming hard,” he said. “They are putting hundreds of thousands of dollars — millions of dollars — to be able to defeat me, and they’re starting to say these ridiculous, salacious things.”
“We’re starting to see this coordinated drip campaign. When I say a drip campaign, it’s where they’re going to drop an attack article every one or two days just to try and kill us by death by a thousand cuts, and that is really their main strategy,” he said.
