WASHINGTON — Early this year, Sen. David Perdue, R-Ga., sold more than $1 million worth of stock in the financial company Cardlytics, where he once served on the board. Six weeks later, its share price tumbled when the company’s founder announced he would step down as CEO, and the firm said its future sales would be worse than expected.

After the company’s stock price bottomed out in March at $29, Perdue bought back a substantial portion of the shares that he had sold. They are now trading around $120 per share.

The Cardlytics transactions drew the attention this spring of investigators at the Justice Department, who were undertaking a broad review of the senator’s prolific trading around the outset of the coronavirus pandemic for possible evidence of insider trading, according to four people with knowledge of the case who described aspects of it on the condition of anonymity. Though Perdue alluded to the federal inquiry in a campaign ad this fall, its details have not been previously reported.

Investigators found that Cardlytics’ CEO at the time, Scott Grimes, sent Perdue a personal email two days before the senator’s stock sale that made a vague mention of “upcoming changes.” The timing of the message prompted additional scrutiny from investigators in both Washington and Atlanta. But ultimately they concluded the exchange contained no meaningful nonpublic information and declined to pursue charges, closing the case this summer.

The federal scrutiny, which also included attention from the Securities and Exchange Commission, is the most vivid example to date of how Perdue’s complex financial interests and frequent trading have complicated his pursuit of a second Senate term. The results of January’s two Senate runoffs in Georgia, including Perdue’s race, will determine which party controls the chamber and with it, President-elect Joe Biden’s ability to advance his agenda through Congress.

Democrats have used details of his trades to accuse Perdue of lining his pockets when Americans were worried about their jobs and health, and in some cases, leveled corruption charges.


Congress’ ethics rules do not bar lawmakers from holding or trading individual stocks, but like other Americans, they are not allowed to trade on inside information. Other lawmakers have decided it is not worth the political sweat that comes with the appearance of possible conflicts of interest and have steered their investments into diversified mutual funds. But Perdue, a former executive at Reebok and Dollar General, has been one of the most active traders on Capitol Hill.

A spokesperson for Perdue’s campaign confirmed the investigation in a statement, saying that investigators with the Justice Department and SEC “quickly and independently cleared Sen. Perdue of any wrongdoing — this story highlights that again.”

“Sen. Perdue has always followed the law,” the spokesperson, John Burke, said.

A Justice Department spokesman and SEC officials did not respond to requests for comment. Representatives for the U.S. attorneys’ offices in Washington and Atlanta and the FBI declined to comment.

A spokesman for Goldman Sachs, which handles Perdue’s portfolio, said the bank had “fully cooperated with inquiries” about Perdue but declined to comment further, citing a policy of not commenting on its clients.

Grimes and officials at Cardlytics did not respond to requests for comment. The inquiry into Perdue roughly coincided with an unusual blitz of federal scrutiny on senators and their financial transactions.


In the other cases, the Justice Department’s public corruption unit focused on stock sales around the beginning of the coronavirus pandemic, when markets dropped precipitously, by Sens. Richard Burr, R-N.C.; Dianne Feinstein, R-Calif.; Jim Inhofe, R-Okla.; and Kelly Loeffler, R-Ga. Loeffler is competing in the state’s other runoff election.

Investigators scrutinized whether the senators had dumped stocks and bought others in key sectors after receiving nonpublic briefings on the virus from experts and before the market drop. The cases were closed on all of them except Burr.

The investigation into Perdue appears to have started in a similar fashion, but came to focus more intensely on the Cardlytics transactions.

FBI agents in Washington spoke with Perdue in June, asking him questions about his financial transactions. The extent of the conversation was unclear, according to two people with knowledge of the conversation.

Perdue’s lawyers turned over hundreds of pages of information, including the emails with Grimes, in response to a subpoena from a grand jury.

During the campaign, Perdue disclosed in a televised ad that a “full review of his stock trades” by the Justice Department and the SEC had “cleared him completely,” but made no mention of Cardlytics or the extent of the federal scrutiny.


Grimes and Perdue had known each other since at least 2010, when Perdue joined the board of Cardlytics, then a small and privately held Atlanta startup. Perdue resigned his directorship in 2014 after his election to the Senate, but struck an unusual financial arrangement on his way out that paved the way for him to benefit from holding a stake in the company when it went public four years later.

As a senator, Perdue continued to hold shares of Cardlytics, where executives said he had made valuable contributions to the company, along with scores of other stocks that he traded. In 2019, Grimes made the maximum donation of $5,600 to Perdue’s reelection efforts, in what appeared to be his only political contribution of the election cycle.

The email correspondence between the two men began Jan. 21 and took place just before Perdue placed the well-timed trades.

“David, I know you are about to do a call with David Evans,” Grimes wrote from his iPad, according to a copy of the exchange reviewed by The New York Times. “As an FYI, I have not told him about the upcoming changes. Thanks, Scott.”

Evans, then the chief financial officer of Cardlytics, stepped down from that role six weeks after Grimes sent the email, at the same time that Grimes announced plans to assume a new role as executive chairman. Evans said in July that he was leaving the company.

Perdue responded to Grimes’ email by saying he would check with his Senate scheduler but “I don’t know about a call with David or the changes you mentioned.”


Grimes wrote back the next morning to apologize.

“David, Sorry. That email was not meant for you. Wrong David!” he wrote.

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% of his position, three of the people said. One person familiar with the inquiry into Perdue’s trades said that the conversation was memorialized in an internal Goldman Sachs record later obtained by the FBI.

Financial disclosure forms Perdue is required to file with the Senate show a Jan. 23 sale of $1 million to $5 million in Cardlytics stock.

Investigators in Washington began scrutinizing Perdue in the spring; by June, the U.S. attorney’s office in Atlanta was handling the case along with prosecutors in the department’s criminal division in Washington.

Hutchinson told the FBI that Perdue and his wife weighed in only on broader investing issues, like the proportion of stocks and bonds to hold in their portfolio, according to a person with knowledge of his interview. But a person familiar with the senator’s money-management arrangements with Goldman Sachs said Perdue retained some degree of discretion over which trades were made and when.

In this case, Perdue’s legal team told investigators that Hutchinson had advised their client in October 2019 that he needed to sell Cardlytics shares to balance his holdings. The shares had increased in value and the advisers argued that Perdue should take the profits from the sales and reinvest them elsewhere to limit his exposure to the fluctuation of a single stock. Perdue elected to go forward with those changes in January, his lawyers said.

Hutchinson declined to comment.

After conducting interviews, including with Perdue and Grimes, investigators reached their conclusion that the senator had no nonpublic information about the company’s performance when he made the Cardlytics trade. The investigation was closed later in the summer, according to the people familiar with the case.

If the email from Grimes was accidental, said Tai Park, a former federal prosecutor and white-collar crime partner at the law firm White & Case, Perdue “may be on firmer ground, because that’s objective evidence that the CEO was not trying to tip him. In any event, trading on the basis of information learned from a CEO of a company is exceedingly risky under any scenario and could draw attention from investigators.”