Officials probe possible insider trading
over U.S. Medicare changes: WSJ
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[June 19, 2014]
WASHINGTON (Reuters) - Federal
authorities and the U.S. Securities and Exchange Commission are seeking
evidence for a grand jury investigation into whether congressional staff
provided tips to Wall Street traders about a change in healthcare
policy, the Wall Street Journal reported on Wednesday.
The SEC sent subpoenas to the House Ways and Means Committee and
Brian Sutter, staff director of the committee's healthcare
subcommittee, the Journal said. The Justice Department also has
subpoenaed Sutter to testify to before a grand jury in New York.
An official at the Centers for Medicare and Medicaid Services
declined to comment on the Journal report.
The investigation was started after a Journal report last year about
a jump in health insurance stocks just before the U.S. government
announced news about a change in Medicare payments that was
favorable to those companies.
The newspaper said the stock surge was set off by an email from
Height Securities, a Washington policy-research firm, predicting the
change in Medicare payments. The email was partly based on
information from Mark Hayes, a lobbyist who had formerly been a
healthcare aide in the Senate and who said his information came from
"very credible sources," the Journal said.
Investigators want to determine if the "credible sources" broke
insider trading regulations by passing on non-public information.
[to top of second column]
Hayes has told congressional investigators his tip did not come from
one specific person and that his prediction was based on talks with
a Senate aide and his own analysis.
(Writing by Bill Trott; Additional reporting by David Morgan;
Editing by Peter Cooney)
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