The latest case emerged April 1 when Height Securities, a Washington-based stock brokerage firm, alerted its clients that the government would soon make a decision favoring private health insurers who participate in a Medicare program.
The alert went out 18 minutes before the end of the trading day, sparking a surge in trading in the shares of several major health-care firms, including Humana and Aetna. The official government announcement was made after trading closed for the day.
On Wednesday, several people familiar with the probe confirmed that the SEC has subpoenaed a Height Securities analyst and Mark Hayes, a health-care lobbyist who advised the firm on legislative issues. Hayes’s law firm, Greenberg Traurig, was also subpoenaed by the SEC, according to the sources, who spoke on the condition of anonymity because the matter was under federal investigation.
The SEC has conducted an interview with Hayes, who voluntarily submitted to four hours of questioning, these people said. The FBI was present at the meeting, suggesting that the Justice Department has taken a deep interest in the matter, one of the people said. A Justice Department spokesman declined to comment on an ongoing investigation.
The SEC also declined to comment, but people familiar with the investigation said the agency began issuing subpoenas in mid-April seeking e-mails and other internal documents after a report on the matter in the Wall Street Journal.
All the parties involved deny any wrongdoing, their attorneys and company officials said.
In a prepared statement to The Post, Andrew Parmentier, Height Securities’ managing director, said the firm’s alert “was based on careful and close analysis of the facts, and was solid, sound research in accordance with applicable laws and regulations.”
People familiar with the investigation said Height has not received a SEC subpoena.
SEC and Justice Department investigators recently have been escalating a crackdown on insider trading, setting their sights on some of the most powerful traders on Wall Street. The case opens a new front in this campaign by going after firms in the agencies’ back yard in Washington.
Defining the contours of the political intelligence world can be difficult. It ranges from law firms and lobbyists to small, boutique investigative firms. What many have in common are their customers: hedge funds and other major investors.