http://www.bloomberg.com/news/2014-07-04/house-says-staff-absolutely-immune-in-answer-to-sec.html
Meanwhile, somewhere in the white house......
The U.S. House Ways and Means Committee and a top staff member say the panel and its employees are “absolutely immune” from having to comply with subpoenas from a federal regulator in an insider-trading probe.
The committee yesterday responded to U.S. District Court Judge Paul Gardephe’s order to explain why it hadn’t complied with the U.S. Securities and Exchange Commission’s requests for documents, phone records and testimony of aide Brian Sutter for more than a year. Gardephe gave the House until yesterday to answer.
Kerry W. Kircher, the top lawyer for the House, said the SEC’s request should be dismissed because the information it seeks concerns legislative activities protected by the Constitution, which can’t be reviewed by federal judges. If Gardephe won’t dismiss the SEC’s case, it should be transferred to federal court in Washington, Kircher said.
“What the SEC has done is embark on a remarkable fishing expedition for congressional records -- core legislative records,” Kircher said in a court filing. “The SEC invites the federal judiciary to enforce those administrative subpoenas as against the Legislative Branch of the federal government. This court should decline that invitation.”
The so-called speech and debate clause in the Constitution protects members of Congress and staff from any outside inquiry into legislative business.
Testing Limits
The SEC sought the subpoenas in an investigation testing the limits of federal insider-trading laws on whether the committee or staff members illegally passed on non-public information about a change in U.S. health-care policy. In seeking compliance with the subpoena demand, the SEC cited a 2012 law that requires public officials to keep confidential any non-public information about government matters that could move stock prices.
Sutter ’s connection to the investigation is “tangential” Kircher said, and would also interfere with his work because his schedule is “heavily, and nearly permanently, booked.”
The regulator is investigating a spike in trading of health-insurance companies, including Humana Inc., ahead of a government announcement last year that increased, rather than cut, payments to health insurers. The SEC says it has evidence that Sutter “may have been a source” used by a lobbyist at Greenberg Traurig LLP. The lobbyist disclosed the health policy changes to an analyst at Height Securities LLC who sent out an alert ahead of the government announcement, according to the SEC.
The U.S. House Ways and Means Committee and a top staff member say the panel and its employees are “absolutely immune” from having to comply with subpoenas from a federal regulator in an insider-trading probe.
The committee yesterday responded to U.S. District Court Judge Paul Gardephe’s order to explain why it hadn’t complied with the U.S. Securities and Exchange Commission’s requests for documents, phone records and testimony of aide Brian Sutter for more than a year. Gardephe gave the House until yesterday to answer.
Kerry W. Kircher, the top lawyer for the House, said the SEC’s request should be dismissed because the information it seeks concerns legislative activities protected by the Constitution, which can’t be reviewed by federal judges. If Gardephe won’t dismiss the SEC’s case, it should be transferred to federal court in Washington, Kircher said.
“What the SEC has done is embark on a remarkable fishing expedition for congressional records -- core legislative records,” Kircher said in a court filing. “The SEC invites the federal judiciary to enforce those administrative subpoenas as against the Legislative Branch of the federal government. This court should decline that invitation.”
The so-called speech and debate clause in the Constitution protects members of Congress and staff from any outside inquiry into legislative business.
Trading Spike
Within five minutes of the Height Securities’ report, prices and trading volumes of health care insurers spiked, with Humana rising 7 percent, according to the SEC.
The SEC sought the information to determine who Sutter spoke with and if he had contact with Greenberg Traurig.
Greenberg Traurig is cooperating with the inquiry and will continue to do so, Jill Perry, a spokeswoman for the law firm, said in an e-mailed statement.
John Nester, a spokesman for the SEC, declined to comment on the House’s filing.
The case is SEC v. The Committee on Ways and Means of The U.S. House of Representatives and Brian Sutter.(good luck with that one) 14-mc-00193. U.S. District Court Southern District of New York (Manhattan).
Meanwhile, somewhere in the white house......
