The head of the House Financial Services Committee who was featured in a news report on insider trading in Congress is reportedly under investigation.
The Office of Congressional Ethics (OCE) has been probing Rep. Spencer Bachus, an Alabama Republican with an influential post, since last year over suspicious trades, The Washington Post reported Thursday.
The office is looking into whether Bachus broke Securities and Exchange Commission regulations prohibiting trades based on material, non-public information, as well as using his public office for private gain, the Post said.
His financial transactions were the focus of a November CBS 60 Minutes report on lawmakers who profit from well-timed stock market trades in the very industries they regulate. The basis for the story was a book, Throw Them All Out, from a Hoover Institute fellow, Peter Schweizer who reviewed lawmakers' financial disclosure records.
CBS' 60 Minutes reported that Bachus -- at the time the ranking member of the Financial Services Committee -- had bought stock options after a September 2008 meeting with Treasury Secretary Hank Paulson and the Fed Chair Ben Bernanke about the impending financial collapse. Bachus, in a statement to 60 minutes, denied that he ever traded on non-public information or financial services stock and maintained that most knew the economy was on the brink by September 2008.
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The report sparked outrage and led to legislation, the STOCK Act, to firmly ban insider trading among federal lawmakers, though members of Congress are already bound by SEC regulations on the practice. The House of Representatives and the Senate have passed their own versions of the STOCK Act.
Nonetheless, the OCE's probe into a lawmaker's potential insider trading is the first of its kind.
A Post review of Bachus' trades showed mostly stock option trades that coincided with major policy announcements regarding industries he oversees in Congress.
The Office of Congressional Ethics has requested information and I welcome this opportunity to present the facts and set the record straight, Bachus said in a statement his spokesman issued to the Post.