Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Inside the Washington-Wall Street Corruption Industry

Politics / Market Regulation Sep 11, 2014 - 07:03 PM GMT

By: Money_Morning

Politics

Shah Gilani writes: There’s a new twist in an ongoing U.S. Securities and Exchange Commission (SEC) probe.

For months now, the SEC has been investigating whether anyone in the federal government leaked inside information to a Washington-based investment research firm.


While that was pretty juicy already, those investigators are now looking at up to 44 hedge funds that may have traded on that inside information.

If you already thought our public servants were greedy, dirty and corrupt, well, this helps prove your case.

If, on the other hand, you think our folks in D.C. are pure, altruistic angels, today I’m going to convince you otherwise…

A Revealing Timeline

At 3:42 p.m. on April 1, 2013, more than 150 investor clients of Height Securities were sent an email predicting that the federal Centers for Medicare and Medicaid Services (CMS) would reverse course on planned funding cuts for private insurance plans.

Based on the “prediction,” the hedge funds now under investigation bought shares of insurance companies that would benefit if CMS did in fact reverse its stance.

And wouldn’t you know it, at 4:22 p.m. that same afternoon, the folks at CMS announced they were reversing themselves. In afterhours trading and over the next several days, insurance company stocks soared.

The SEC investigators believe the Height Securities analysts told the hedge-fund traders – immediately after the initial email was sent to Height’s 150 clients – that Height’s information was based on a “credible source” in the federal government.

If the credible source was leaking inside information, or the traders even thought that Height’s tip was inside information, and they acted on it, those hedge funds could be charged.

It’s all well and good that the SEC is looking into who made what on their trading. But what’s far more interesting and important is who the credible source was.

Was he or she paid? Was he or she given the inside information by anyone in the government who was paid?

Whether we find all this out or not may be based on an upcoming judge’s ruling.

That’s because the credible source, Brian Sutter, a top House of Representatives healthcare aide, has refused to comply with an SEC subpoena in the matter. Sutter ignored the subpoena based on advice of congressional lawyers.

That prompted the SEC to file a federal lawsuit seeking to force Sutter to turn over his communications and records to investigators. The judge hearing the case is expected to rule any day now.

What is known to have happened, based on email and phone records, is that Sutter spoke to healthcare lobbyist Mark Hayes, who previously worked for Height Securities. And within 10 minutes, Hayes communicated CMS’s change of course to someone at Height, citing a “credible source.”

The SEC, to its immense credit, is actually investigating the Washington political-intelligence industry. That the investigators have been stymied by House lawyers is indicative of something.

Some D.C. watchers say it’s indicative of the separation-of-powers issues that come up when the executive branch investigates the legislative branch.

I say poppycock. It’s indicative of a cover-up.

Here’s what I want to know.

Are people in and around Congress making money directly (envelopes of cash) or indirectly (campaign donations) by channeling inside information to hedge funds?

Do you think we’ll ever find out?

Source : http://www.wallstreetinsightsandindictments.com/2014/09/inside-washington-wall-street-corruption-industry/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in