SEC investigates CMS employees in insider-trading case: WSJ

[October 29, 2014]  (Reuters) - The U.S. Securities and Exchange Commission is investigating whether employees at the Centers for Medicare and Medicaid Services (CMS) leaked information to traders, the Wall Street Journal reported, citing people familiar with the investigation.

Authorities have interviewed nearly a dozen CMS officials and subpoenaed policy research firms, Wall Street traders and government officials as part of the probe, the newspaper reported, citing sources.

The SEC is pursuing three overlapping insider-trading investigations involving CMS, the report said, adding that one of the cases involves the Federal Bureau of Investigation.

In one probe, the SEC is examining whether any agency officials tipped off policy research firm Marwood Group LLC about CMS's review of Dendreon Corp's prostate cancer treatment called Provenge.

The second is focused on a former CMS employee, David Blaszczak, who has made many accurate predictions about Medicare payments for medical products, the paper reported.

The SEC is also examining whether material non-public information concerning an April 1, 2013 announcement by CMS of 2014 reimbursement rates for a Medicare program was leaked improperly, and whether anyone traded on that information.

Earlier this month, the SEC obtained evidence against research firm Height Securities and several New York-based hedge funds.

CMS, SEC and Blaszczak could not be immediately reached for comments outside regular business hours.

(Reporting by Rishika Sadam in Bangalore; Editing by Gopakumar Warrier)

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