Congress and its aides are exempt from, even “absolutely immune to” insider trading rules, as the Congressional Ways and Means Committee lawyer reminded a federal judge. So no records will be forthcoming from aide Brian Sutter, or his bosses.
The SEC sought the subpoenas in an investigation testing the limits of federal insider-trading laws on whether the committee or staff members illegally passed on non-public information about a change in U.S. health-care policy. In seeking compliance with the subpoena demand, the SEC cited a 2012 law that requires public officials to keep confidential any non-public information about government matters that could move stock prices.
The regulator is investigating a spike in trading of health-insurance companies, including Humana Inc., ahead of a government announcement last year that increased, rather than cut, payments to health insurers. The SEC says it has evidence that Sutter “may have been a source” used by a lobbyist at Greenberg Traurig LLP.
The lobbyist disclosed the health policy changes to an analyst at Height Securities LLC who sent out an alert ahead of the government announcement, according to the SEC.
(If you want the full story of what went on with Sutter and the congressmen, see the WSJ article here.)
The huge publicity accorded insider trading cases on Wall Street is, in my opinion, merely a device to make it appear that the government is going after crooks when in fact it’s Congress itself that has been using such privileged information to enrich itself, for decades. What a surprise. As professor Reynolds points out, “It’s just a criminal conspiracy with the power to tax.”