In late October 2017, US commerce secretary Wilbur Ross was asked for comment about a damning story (paywall) on his business ties to the Kremlin. Bad press was inevitable, and the company that tied him to Russia was sure to suffer a hit in its market value.
The story would show that Ross owned stock in shipping company Navigator Holdings, which counted as a major client a Russian company part-owned by Putin’s ex-son-in-law and a close friend.
But if that revelation from the Paradise Papers was giving him lemons, Ross found a way to make lemonade. Forbes reports that a few days after the New York Times reached him for comment, Ross opened up a short position against Navigator Holdings—essentially, a bet that its stock would go down.
One of the most incredible things about Wilbur Ross' hidden filings is just how clear they are that he shorted Navigator holdings just before negative stories came out about his ties to the company. They just lay it out in perfectly plain English. pic.twitter.com/w6EgQrBxsL
— Dan Alexander (@DanAlexander21) June 18, 2018
Six days after that, the New York Times and the International Consortium of Investigative Journalists reported Ross’s holdings. Ross insisted there was “nothing wrong” with owning the stock, since the Russian investor wasn’t sanctioned (even if its shareholders were).
While Navigator’s shares didn’t plummet, they did eventually fall by 4%. Eleven days after the story broke, Ross sold his shares, “seemingly with a profit,” Forbes reports.
The Forbes investigation reports that several other stocks held by Ross until 2017 could pose a conflict of interest for the US commerce secretary, including in companies tied to the Chinese state.
Update (06/19): Ross told Quartz in a statement that he had sold Navigator shares earlier in the year, and in late October realized that he still held Navigator shares in another account. Ross says he sold them short in order to immediately offload them in alignment with his previous divestment, and that he completed the short by handing the shares out on Nov. 16 once he got access to them. A Department of Commerce spokesperson highlighted that ethics officials ruled that the transactions complied with federal ethics requirements.
Correction: This story has been amended to clarify that Ross no longer holds stocks connected to the Chinese state.