SEC Digging for a Mole on Wall Street

The SEC is trying to ferret out who leaked word of a coming government health care decision to stock traders, allowing them to get an unfair jump on the competition. The agency has issued subpoenas to a number of companies and individuals related to the case, the Washington Post reports. The case stems from an April 1 incident, in which brokerage firm Height Securities sent out an alert warning clients that the government was about to make a decision that would boost private health insurers.

The SEC has already questioned one Height Securities analyst and health-care lobbyist, and the FBI reportedly had a presence at the interview, a sign that the Justice Department could get involved. Height says its tip was based on "careful and close analysis" not illicit insider knowledge. The case shines a spotlight on the burgeoning "political intelligence" industry, in which companies deliver government secrets to investors, and indicates that the SEC and Justice Department may see it as the next front in the war on insider trading. (More Securities and Exchange Commission stories.)