Sen. Charles Grassley is cooperating with a Justice Department investigation into whether one of his aides was involved in insider trading by sharing government information with investors this past spring, according to The Wall Street Journal.
Federal authorities are trying to determine whether the Iowa Republican's healthcare aide Rodney Whitlock had communications with people who passed on word to investors of a government decision to restore cuts in funding to private Medicare health insurance plans.
According to the Journal, ex-Grassley aide Mark Hayes, who is now a lobbyist, may have been one of the people Whitlock spoke with.
Federal investigators, the Journal noted, are trying to determine if insider-trading laws were broken by tipping off investors of a pending announcement by the Centers for Medicare and Medicaid Services (CMS) that cuts were being restored for private insurance plans.
A Grassley spokeswoman told the Journal that Grassley is conducting his own investigation, and that while more than 400 people "had advance notice of the Medicare Advantage decision, Rodney did not." She also said Whitlock was not a target of the federal probe and "could not possibly have conveyed to Mark Hayes or anyone else what CMS was planning to do on Medicare Advantage because he didn't know."
The investigation involving possible connections to Congress is sensitive, the Journal noted, because it is unusual for a federal probe to be extended into the hallways of the Capitol, and because Grassley is the top Republican on the Senate Judiciary Committee, which oversees the Justice Department.
Still, word that information may have been shared by current and former Grassley aides came up earlier this spring when CMS made its announcement on April 1. That same day, the Journal noted, Hayes reported to Washington-based client Height Securities that a deal had been reached. Height officials sent out an alert predicting the move, and shares in the largest health insurance firms, including Humana and United Health group, jumped after the alert, the Journal reported.
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