WASHINGTON, Dec. 8 (UPI) -- The U.S. Securities and Exchange Commission has been investigating whether lobbyists tipped hedge funds off about a speech by the Senate majority leader.
The Washington Post reported Friday that a spokeswoman for Sen. Bill Frist, R-Tenn., confirmed that people in his office had been questioned on how lobbyists learned the contents of his speech on asbestos legislation.
While trading on the basis of insider information is illegal, leaks from Congress about pending legislation or speeches appear to fall into a gray area, the newspaper said. Congressional ethics rules bar representatives and their staffs from profiting, but the SEC does not bar them from providing information to others.
Lobbyists have increasingly been working for hedge funds.
"The advisory business to hedge funds has been growing," Paul Equale, a lobbyist, told the Post. "But in my experience it is almost a benign exchange of ideas and perspectives. It's more explaining how Washington works."