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

Start your day with TPM.
Sign up for the Morning Memo newsletter

Attorneys for the House Republican aide at the center of investigations into the leak of a Medicare policy change to Wall Street are providing information to the Justice Department, a source familiar with the legal negotiations told TPM on Thursday.

Because of that, a federal grand jury subpoena of the staffer has been withdrawn, according to the source.

Attorneys for Brian Sutter, the top health policy director on the House Ways and Means Committee, offered to provide the information that he would have given in grand jury testimony, the source said.

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.

Latest DC
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Investigations Desk:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: