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The Federal Communications Commission has initiated an investigation into the possibility that media networks and military analysts broke identification sponsorship rules to present a rosier picture of the Iraq war. A New York Times article last April showed that media military commentators were frequently fed information in private meetings with top White House and Pentagon officials. Two democratic congressmen sent letters to the F.C.C. requesting a probe last spring. (Wall Street Journal)

The Securities and Exchange Commission may have unfairly conducted an insider trading investigation, according to a federal report. During the investigation of the hedge fund Pequot Capital Management, an S.E.C. lawyer was axed after he tried to interview a top executive connected to the case. The report recommends disciplinary action against the commission’s director of enforcement and two supervisors. The S.E.C.’s record is already under fire from critics who say it lapsed in its oversight role, leading to the current Wall Street collapse. (New York Times)

Democrats have joined the chorus of critics of new F.B.I. rules governing when the agency can lay the groundwork for an investigation. Under the new regulations, scheduled to go into effect Dec. 1, agents do not need supervisor approval or evidence of a crime to launch an assessment. Watchdog groups have said that the new rules would also permit widespread racial profiling. Democrats, including House Judiciary Chair John Conyers (D-MI) have asked that implementation be delayed to allow the new administration to evaluate them. (UPI)

The Securities and Exchange Commission sued prominent Democratic fundraiser Norman Hsu Monday, charging that he had cheated investors using a front company to line his pockets in a classic Ponzi scheme. Hsu also used investors’ money to contribute to political campaigns, including that of Sen. Hillary Clinton and other democratic candidates. Hsu has had run-ins with the law before. In 2007, he was indicted on federal charges of fraud and violating campaign finance laws and convicted 15 years earlier of cheating investors. (AP)

A move to indefinitely delay the sentencing of Antoin “Tony” Rezko, a major fundraiser for Barack Obama and Illinois Gov. Rod Blagojevich convicted in June for mail fraud, wire fraud, and money laundering, and attempted distortion, may indicate that he will divulge information about his political clients in exchange for a smaller sentence. This is the second time since September that the judge has delayed the sentencing. Obama has not been accused of wrongdoing, but Blagojevich is the subject of a federal investigation into his hiring practices. (AP)

Texas legislators’ stakes in companies that do business with the state creates an unethical conflict of interest, watch dog groups in the state say. In one example, more than half of Republican Rep. Sid Miller’s campaign spending since 2000 has gone to Todd Smith, a the co-founder of a political and commercial phone bank company, of which Miller is part owner. Under Texas ethics rules, lawmakers must state their ties on disclosure forms, but are not required to reveal the names. (AP)

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