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Monday, December 17, 2018

How Wilbur Ross Lost Millions, Despite Flouting Ethics Rules

Dan Alexander
Originally published December 14, 2018

Here is an excerpt:

By October 2017, Ross was out of time to divest. In his ethics agreement, he said he would get rid of the funds in the first 180 days after his confirmation—or if not, during a 60-day extension period. So on October 25, exactly 240 days after his confirmation, Ross sold part of his interests to funds managed by Goldman Sachs. Given that he waited until the last possible day to legally divest the assets, it seems certain that he ended up selling at a discount.

The very next day, on October 26, 2017, a reporter for the New York Times contacted Ross with a list of questions about his ties to Navigator, the Putin-linked company. Before the story was published, Ross took out a short position against Navigator—essentially betting that the company’s stock would go down. When the story finally came out, on November 5, 2017, the stock did not plummet initially, but it did creep down 4% by the time Ross closed the short position 11 days later, apparently bolstering his fortune by $3,000 to $10,000.

On November 1, 2017, the day after Ross shorted Navigator, he signed a sworn statement that he had divested everything he previously told federal ethics officials he would. But that was not true. In fact, Ross still owned more than $10 million worth of stock in Invesco, the parent company of his former private equity firm. The next month, he sold those shares, pocketing at least $1.2 million more than he would have if he sold when he first promised to.