Tuesday, April 9, 2013

Why Isn't The SEC Investigating Medicare Rate Leaks As Insider Information Leaks?

Posted by Milton Recht:

From Bloomberg, "Medicare Is Probing Advantage Rates Leak, Tavenner Says" by Alex Wayne:
Medicare is probing the possible leak of a government decision regarding health insurers’ payments for next year, administrator Marilyn Tavenner said.
Health insurance stocks surged on April 1 before the official government announcement on new Medicare rates, shining a spotlight on the ties among Congress, U.S. agencies and certain investment advisers. At issue is a private e-mail from a politically connected research firm that alerted recipients that Medicare rates, scheduled to drop under a preliminary decision, would increase instead.
Why doesn't the SEC treat insider information leaks by US government employees that have financial impact on industry stocks similar to leaks by employees of publicly traded companies and start a criminal or civil investigation?

Is it that the SEC does not want to prosecute government employees for their violation of insider trading laws, or is it that we need new laws to allow a SEC investigation to prevent insider information abuses by government employees?

Recently, Congress updated its own insider trading laws to prevent Congressman from benefiting from insider company and industry information. Why does it seem we always have a double standard that treats government employees including Congressman, their staff, the President and his staff more leniently than the rest of the US?

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