Usually thought of as unusually receptive, for a financial regulator, at least, to legislative pressure, the SEC, perhaps in a testament to its recent obsession with insider trading, has done the opposite and filed suit against Congress, subpeonaing a congressman and his aide to see whether the aide disclosed news to a lobby/law firm about health funding that caused a bunch of stock prices to spike ahead of the announcement of the new policy. DOJ is in on the game as well.
Congress is, it appears, displeased:
“What the SEC has done is embark on a remarkable fishing expedition for congressional records -- core legislative records,” [congressional lawyer] Kircher said in a court filing. “The SEC invites the federal judiciary to enforce those administrative subpoenas as against the Legislative Branch of the federal government. This court should decline that invitation.”
The so-called speech and debate clause in the Constitution protects members of Congress and staff from any outside inquiry into legislative business.
It is pretty juicy, and we'll outsource why to corp counsel. I'm just ballparking here, but a conversion between an aide and a lobbyist would seem to be deeply, deeply covered by the speech and debate clause, as unappetizing as it might seem. Here's a note on the clause, and here's the Heritage Foundation, which does these recaps pretty well.
And here's corp counsel:
the DOJ and SEC have sent subpoenas to Rep. David Camp, Chair of the House Ways & Means Committee, and Congressional Staffer Brian Sutter, regarding whether they tipped traders about a change in health care policy in the wake of a long-running investigation. And on Friday, as noted in this WSJ article, the SEC filed a lawsuit in the Southern District of New York seeking to compel the subpoenas. Possible grand jury to follow.
Here’s an excerpt from David Smyth’s blog about the case:
This is fascinating to me for so many reasons, among them: (1) the potential Constitutional cluster we’re about to witness; (2) the real test this poses for the recently passed STOCK Act’s effectiveness; and (3) another example of Mary Jo White’s severe distaste for those who defy Commission subpoenas.
And here’s an excerpt from the latest WSJ article:
“It’s not unheard of for an agency to serve a subpoena to Congress, but for an agency to sue is—if not unprecedented—at least very rare,” said Michael Stern, who was senior counsel to the U.S. House from 1996 to 2004. “It shows that there is a serious conflict; the SEC really wants the information and the House really wants it protected,” he said.
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