The Securities and Exchange Commission and Federal Bureau of Investigation have been examining whether anyone in government illegally passed along information April 1 about a pending decision on Medicare payments, according to officials involved in the probe. A report from a Washington policy-research firm, Height Securities, correctly called the decision just before it was announced, which sent health-care stocks soaring.
The incident has put the spotlight on the burgeoning business known as political intelligence, where lobbyists, policy experts and former government officials gather insights on policy changes that they then sell to investors. But investigators are struggling over how to distinguish between illegal insider tips and accurate predictions based on research and analysis, the people familiar with the probe say.
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