FBI 'investigates SEC officials for insider trading'

20 May 2009

Two "senior" attorneys at the Securities and Exchange Commission (SEC) are under investigation by the FBI over alleged insider trading, according to a leaked internal report.

The paper, by SEC inspector general David Kotz, states that one suspect works in the office of the SEC's chief counsel and has access to "tremendous" amounts of privileged information, the Independent said.

In the two years to last January, one of the officials is said to have made 247 trades, while the other made 14 deals.

Although the names of the lawyers and the stocks they traded remain confidential, the newspaper said one of the attorneys sold their entire holding in a healthcare company two months before the SEC began an investigation into the firm.

The same lawyer is said to have sold shares in an oil company just two days before an SEC probe got underway.

Senator Chuck Grassley, who made the report public, wrote to SEC chairman Mary Schapiro saying it was "hard to imagine a more serious violation of public trust than for the agency responsible for protecting investors to allow its employees to profit from non-public information about its enforcement activities".

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