SEC Eyes Citadel, Point72 In Healthcare Probe

Sep 11 2014 | 3:29am ET

Citadel Investment Group, Point72 Asset Management and Viking Global Investors have been pulled deeper into an insider-trading probe involving Congressional staffers.

The three firms and at least one other, Visium Asset Management, had more than 20 communications with Height Securities after that firm told clients about a potentially beneficial change to healthcare policy and the close of the markets. The note to the hedge funds—and at least 40 other firms—came 40 minutes before the policy change was announced and 22 after the markets closed.

The Securities and Exchange Commission had been looking into whether Congressional staffers improperly tipped a lobbyist at Greenberg Traurig about the change, with the lobbyist then passing the information on to Height. Now, it is investigating whether the hedge funds violated insider-trading rules by using the information.

Height has denied any wrongdoing, as did Citadel, which said that its contact with Height “was for the sole purpose of verifying information contained in what we understood to be a broadly disseminated e-mail.” The SEC has not levelled any formal accusations in the case.

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