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[sludgehound]

2012 Fed insider-trading probe expands

A high-profile investigation into a leak of sensitive information from the Federal Reserve in 2012 has escalated to an insider-trading probe led by a key market surveillance agency and federal prosecutors in Manhattan , according to people familiar with the matter.
But the firm at the center of the probe, Medley Global Advisors , has thrown up a roadblock by claiming a novel defense: It says it is a media organization entitled to special protections under the law, the people said.
Federal prosecutors in the Southern District of New York are focusing on the information leak while the Commodity Futures Trading Commission is looking into whether anyone violated insider-trading rules in 2012 when Medley disclosed to its clients details about the Fed's plans for further economic stimulus, according to people familiar with the matter.
A spokesman for Medley said the firm "reserves complete editorial freedom in its newsletters, an integral principle for any serious newsgathering organization." He said, "Medley's journalists are focused on providing their readers deep insight," and that the firm's work is "made available to all subscribers and has a global audience from Kansas City to Madrid to Tokyo ."
The Fed declined to comment on the investigation and insider-trading probe.
An expanded version of this report can is available at WSJ.com (http://www.wsj.com/articles/questions-about-leak-at-federal-reserve-escalate-to-insider-trading-probe-1443650303).
- Aruna Viswanatha ; 415-439-6400; [e-mail]
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(END) Dow Jones Newswires
09-30-15 1817ET