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House Committee ordered to court in insider probe

By WTOP Staff

LARRY NEUMEISTER
Associated Press

NEW YORK (AP) — A powerful U.S. House of Representatives committee was ordered on Friday to appear before a judge next month to explain why it should not be required to turn over documents in an insider-trading probe.

U.S. District Judge Paul Gardephe in Manhattan set a July 1 hearing for the Ways and Means Committee to appear. He also required a committee staffer, Brian Sutter, to appear. He said the committee must show why it should not be ordered to produce documents demanded by the Securities and Exchange Commission in May.

In court papers, the SEC said its probe relates to whether secrets were passed to certain members of the public surrounding an April 2013 announcement by the U.S. Centers for Medicare and Medicaid Services about a Medicare program.

Sutter, the health subcommittee’s staff director, disclosed on May 9 to House Speaker John Boehner, a Republican, that he had received a subpoena from the SEC for documents and testimony along with a grand jury subpoena from federal prosecutors in Manhattan, according to the congressional record of that day.

The SEC said in its court papers that the committee and Sutter had refused to comply with the subpoenas. It said they had asserted “numerous objections, arguing, among other things, that the subpoenas are ‘repugnant to public policy;’ that they are vague and overbroad” and that the speech or debate clause of the Constitution entitled them to avoid producing the documents or testimony.

Kerry W. Kircher, general counsel for the House of Representatives, said in an email to The Associated Press that the SEC subpoenas “run seriously afoul of the Constitution’s Speech or Debate Clause.” Kircher said House lawyers are aware the federal judge wants a response by next Thursday and will respond on that ground, among others.

The SEC noted that a public rate announcement about the Medicare Advantage program that was far more favorable to certain health care insurers than anticipated was made 20 minutes after the market closed on April 1, 2013. But, it said, an analyst at dealer-broker Height Securities LLC issued a flash report about 20 minutes before the markets closed urging dozens of clients, including prominent investment funds, to buy stocks that would benefit from a rate increase close to what was announced.

The SEC said the prices and trading volumes of affected stocks, including Louisville, Kentucky-based health care company Humana Inc., increased dramatically within minutes. It said the Height analyst distributed the flash report about half an hour after receiving an email from a lobbyist firm and attorney forecasting the rate improvement.

An SEC probe began April 9, 2013, to determine the source of information sent from the lobbyist to Height and the circumstances of the transmittal and whether any conduct constituted insider trading, the SEC said.

A message seeking comment from Height, which has offices in New York and Washington, D.C., was not immediately returned Friday.

The SEC said information it had obtained indicates Sutter spoke several times in March 2013 to a colleague at the lobbyist firm that sent the email to the Height analyst and communicated with at least two people at the Centers for Medicare and Medicaid Services in the week before the rate announcement.

The SEC said an FBI agent and an investigator from the Office of the Inspector General at the U.S. Department of Health and Human Services interviewed Sutter several weeks after the rate announcement and discussed with him his communications with the lobbying firm.

The agency said Sutter did not recall speaking to the lobbying firm about the rate announcement, but a House attorney sent the FBI and the HHS investigator a letter saying some of the information provided during the voluntary interview was incomplete and, on at least one key issue, inaccurate.

The SEC said the commission had obtained other information that indicated Sutter may have been a source of the lobbying firm’s non-public information.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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