* Probe highlights so-called "political intelligence" sector
* SEC subpoenas DC firm, analyst, lobbyist targeted-report
* Medicare agency has launched internal review
* GAO has said such information hard to quantify
WASHINGTON, May 2 (Reuters) - U.S. regulators are
investigating a Washington-based law firm, a securities analyst
and healthcare lobbyist and have issued subpoenas as part of a
wider probe, according to a media report.
The U.S. Securities and Exchange Commission has subpoenaed
an analyst with Height Securities, and Mark Hayes, a lobbyist
who advised the capital markets firm, as well as Hayes' law firm
Greenberg Traurig, The Washington Post reported, citing sources
who could not be named because of the investigation.
The Federal Bureau of Investigation and the U.S. Department
of Justice are also involved in the probe, according to the
report published on the newspaper's website late Wednesday.
SEC spokesman John Nestor declined to comment to Reuters on
the report. Justice Department spokeswoman Nanda Chitre said the
department could not confirm or deny whether the incident was
Attorneys and company officials for the parties involved
have denied any wrongdoing, the Post said.
At issue is the possible leak of an April 1 decision on
government payment rates for private Medicare health insurance
plans for seniors known as Medicare Advantage. The government
said it would raise reimbursement rates, reversing an initial
proposal from February to cut the rate 2.3 percent.
The probe began after a report last month in The Wall Street
Journal, which first reported the issue and said a report by
Height - saying the announcement would favor insurers - may have
prompted the stock swing, the Washington Post said.
Companies whose share prices surged on the possible leak
included Humana Inc, which derives about two-thirds of
its revenue from the Medicare Advantage Business, UnitedHealth
Group Inc and Aetna Inc.
The potential leak highlights the so-called "political
intelligence" industry where Washington power players with close
ties try to advise Wall Street on legislative affairs,
regulations and other government actions that can affect various
Centers for Medicare and Medicaid Services' Acting
Administrator Marilyn Tavenner last month told a Senate panel
that the potential leak was "a huge issue," and vowed to do an
Humana has also announced an internal review of the events
around the April 1 announcement.
Investigators with the Government Accountability Office, the
investigative arm of Congress, said last month that the agency
could not put a price tag on the sales of political intelligence
or how much of that insider information was actually flowing.
"What is most difficult to measure is the extent to which
investment decisions are based on a single piece of government
information or political intelligence," they wrote in a report
requested by Congress before the current incident.