Now in Legal Rebels:
Posted May 02, 2013 12:50 pm CDT
The Securities and Exchange Commission has reportedly issued subpoenas to Greenberg Traurig as the agency seeks more information about an investor alert issued by one of the law firm’s clients, a stock brokerage.
Several anonymous sources told the Washington Post that the SEC subpoenaed Greenberg Traurig; one of its health-care lobbyists; and an analyst with the stock brokerage, Height Securities. The brokerage issued a client alert on April 1 about a pending government decision affecting private health insurers participating in Medicare, apparently sparking a surge in stock trades for major health-care companies, the Post says.
The story quotes from an April 1 email from the Greenberg lobbyist to a Height Securities analyst about “intel” on plans to prevent a cut in federal Medicare reimbursements to private health insurers.
According to the Post, “The move deepens the government’s scrutiny of the growing ‘political intelligence’ industry, which has been thriving on delivering valuable information from Washington to investors.”
Greenberg Traurig has said it did nothing wrong, but it will no longer represent political intelligence clients. “We have concluded that providing government relations services to an entity in the ‘political intelligence’ area may lead to misunderstanding and unintended use of those services, even when compliant with legal and ethical standards,” the firm said in a statement.
Greenberg Traurig told the Post that neither the firm nor its shareholders had financial ties to the activities of Height Securities, which relied on a variety of sources for its client alert. “We have found no information that any of our shareholders had access to any material confidential government information,” the statement said. The firm is cooperating with the SEC.
Height Securities has also denied wrongdoing, saying its alert was based on “solid, sound research” that did not violate the law.
ABAJournal.com: “Senator’s query prompts law firm to quit ‘political intelligence’ work”