Former SEC official says Bachus is in the clear

By Peter Schroeder - 02/24/12 11:45 AM ET

A former regulator and federal judge tapped by House Financial Services Committee Chairman Spencer Bachus (R-Ala.) to review insider trading allegations against him says he has found no evidence of wrongdoing.

Stanley Sporkin, a former federal judge in the District of Columbia who also headed the Securities and Exchange Commission's (SEC) enforcement division in the 1970s, told The Birmingham News that based on what he has seen, Bachus is innocent.

"I don't see why he would need my services. It's not necessary," Sporkin told the publication. "I haven't seen anything that would indicate a law violation, in my view."

The House's Office of Congressional Ethics is examining whether Bachus, an active financial trader until recently, used private knowledge gleaned during public service to make trades seeking personal profit. The investigation was first reported by The Washington Post.

Bachus staunchly maintained his innocence after the investigation was revealed, saying he had "fully abided by the rules governing members of Congress and look forward to the full exoneration this process will provide.”

Representatives of Bachus approached Sporkin, who now works as a private consultant, to help advise the lawmaker during the investigation. But after reviewing the materials Bachus handed over to the investigative committee, Sporkin "did not see any reason that he should be retained," according to Larry Lavender, Bachus's campaign manager and former committee chief of staff.

Sporkin emphasized to the Alabama paper that Bachus has the right to a fair investigation, and should not be judged simply by its existence.

"I think what we've got to do in these cases is not rush to judgment, and let the process work out," Sporkin said.

Bachus came under scrutiny earlier this year after a book and "60 Minutes" report identified him, along with several other influential lawmakers, suggesting some of his financial trades might have been informed by private congressional information.

Bachus defended himself at that time as well, but the pieces set off a rush in Congress to pass legislation explicitly barring such trading. Varying versions of the Stop Trading on Congressional Knowledge (STOCK) Act were passed overwhelmingly by both chambers, and now will likely head to a conference committee before being sent to the president, who has vowed to sign the bill.