Congressional Aides Can’t Abet Insider Trading, Can't Not Talk To SEC About Insider Trading

First rule of Congress is you don't talk about Congress.
Publish date:

What happens here, stays here, or you'll have to have a little chat with Mary Jo White's people.

Don’t get U.S. District Judge Paul Gardephe wrong: Those in the employ of the legislative branch don’t have to dish about everything, because that would violate an obscure clause in the Constitution.

Because, hey, Judge Paul Gardephe has read the Constitution and he digs it... a lot.

But if a top aide to the most powerful committee on Capitol Hill were to, for argument’s sake, find out about an impending change in federal health-care policy from someone outside the legislative branch and then leak that confidential information to a lobbyist who then told a research firm which then told its clients which then sent health-insurance stocks through the roof, he’d have to do a little more than just hand over his address book.

And Congress will too because its precious “speech and debate clause” stops at the top of those big white marble stairs in Washington.

The court sided with Congress in ruling that the committee and Mr. Sutter didn’t have to provide information that was directly related to “legislative activity.” However, the court said that documents and information that fall outside of “legislative activity” must be produced.

The judge also said that the speech and debate clause “does not protect the dissemination of information outside of Congress….”

Mr. Sutter could be required to provide information about his conversations with individuals at the Centers for Medicare and Medicaid Services, which made the health-insurance policy announcement after financial markets closed.

Mr. Sutter could also be required to provide information about his conversations with a lobbyist who appears to be the source of the alert that Height Securities sent to Wall Street on April 1, 2013.

Court Says Congress Must Comply with Federal Insider-Trading Investigation [WSJ]