In it, but not of it. TPM DC

Source: House GOP Aide Gave Info To Feds In Insider Trading Probe

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AP Photo / J. Scott Applewhite

The Wall Street Journal reported last week that Sutter had been subpoenaed by the Justice Department to testify before a grand jury in Manhattan federal court. In a separate civil investigation, the Securities and Exchange Commission also subpoenaed Sutter as well as the committee for information related to the leak of a policy change to Medicare, which sparked stock trading in major health care companies before it was announced publicly.

Sutter and the committee both initially refused to comply with the subpoenas, and the SEC sued last week to compel them to comply. The agency stated it believed Sutter "may have been" the source of the leak. That lawsuit remains ongoing, separate from the Justice Department's withdrawal of its subpoena.

The SEC lawsuit alleged that Sutter spoke with a lobbyist -- identified by the Journal as Mark Hayes, a former aide to Sen. Chuck Grassley (R-IA) -- on the day of the leak. The commission claimed Sutter spoke with Hayes by both email and phone and discussed the upcoming Medicare policy change, which reversed funding cuts for private insurers.

Hayes then allegedly informed a research firm, which distributed the flash that set off the trading, according to the SEC. Some companies saw as much as a 6 percent spike in shares in less than an hour of trading.

About The Author

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Dylan Scott is a reporter for Talking Points Memo. He previously reported for Governing magazine in Washington, D.C., and the Las Vegas Sun. His work has been recognized with a 2013 American Society of Business Publication Editors award for Best Feature Series and a 2010 Associated Press Society of Ohio award for Best Investigative Reporting. He can be reached at dylan@talkingpointsmemo.com.