SEC charges four in Medicare insider trading scheme

SEC charges four in Medicare insider trading scheme
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The Securities and Exchange Commission (SEC) charged four men Wednesday for alleged involvement in an insider trading scheme that used confidential government information regarding Medicare reimbursements.

Christopher Worrall, an employee at the Centers for Medicare and Medicaid Services (CMS), allegedly gave confidential information to David Blaszczak, a former co-worker who later worked as a political intelligence analyst. 

Worrall allegedly told Blaszczak three different times about pending CMS reimbursement decisions that could affect stock prices. Prosecutors allege that Blaszczak passed that information on to two hedge fund analysts who paid him as a consultant, Theodore Huber and Jordan Foge, who made $3.9 million from the insider trades.

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“A federal employee breached his duty to protect confidential information by tipping a political consultant who then passed along those illegal tips,” said Stephanie Avakian, acting director of the SEC Enforcement Division. “There’s no place on Wall Street or in our government for such blatant misuse of highly confidential information.”

The SEC filed the complaint in U.S. District Court for the Southern District of New York.

“We remain committed to using all resources available to detect sophisticated schemes and stop those who try to create a revenue stream by tipping or trading on material, nonpublic information,” said Robert A. Cohen, co-chief of the SEC Enforcement Division’s Market Abuse Unit.