By Elise Viebeck - 06/19/14 12:07 PM EDT
Federal prosecutors have issued subpoenas for the House Ways and Means Committee and a top healthcare aide as part of an investigation into an alleged leak of sensitive Medicare policy news.
The Justice Department and the Securities and Exchange Commission are probing whether government officials illegally passed on information that led to a surge in insurance stocks before a major Medicare policy announcement last spring.
The subpoenas are the first formal requests for information from Congress related to alleged insider-trading in nearly a decade, and a sign that the investigation has taken a more serious turn, the Journal reported.
If the leak took place, the backstory illustrates the enormous power of information brokers who channel tips from Washington to Wall Street.
In this case, someone in the government is alleged to have leaked news of the Obama administration's plan to scrap a proposed Medicare Advantage cut.
A policy research firm predicted the change before it happened, sending insurance stocks higher before the decision. That alert was based in part on information provided by a lobbyist who formerly served as a congressional aide, according to the Journal.