‘Largest hedge funds and asset management advisers in the nation’ involved, regulator says
An insider-trading investigation into the US House Committee on Ways and Means involves 44 hedge funds and investment firms, including some of the largest in the country, as well as a top Congressional staffer and others, the SEC says in a court filing, according to news media.
The SEC made the revelation in a filing to a New York court, arguing against the claim of the committee, which has jurisdiction over government taxation and other revenue, that it is immune to an earlier subpoena calling for testimony in the insider-trading investigation from a committee staffer.
The investigation centers on trading that took place before the announcement of a change in US government healthcare policy, which drove up the stocks of several insurance companies. The SEC is seeking testimony from Brian Sutter, a senior committee aide.
The SEC alleges information regarding an increase in payments to health insurance companies was passed to traders before it was announced. It also says an analyst at privately held broker-dealer Height Securities sent an urgent report to clients minutes before the government’s announcement with an outline of the proposal in April 2013.
The House Committee on Ways and Means argues in a court filing on July 4 that all legislative activity is legally protected and none of its members or aides can be compelled to testify. A July 16 filing by the SEC says the investigation is ‘much wider’ than previously revealed and concerns ‘some of the largest hedge funds and asset management advisers in the nation,’ the Wall Street Journal says.
The newspaper reports that Viking Global Investors and SAC Capital Advisors, now called Point72 Asset Management, are among funds that made investments betting on an increase in health insurance stocks just ahead of the government announcement.
‘The Humana investigation is substantially concerned with the investor clients of Height Securities that received the subject Height email, and which the commission believes may have engaged in relevant trading,’ the SEC says in its latest filing, according to Bloomberg.
