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Humana Fires Greenberg Traurig as Investigations Begin

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By William Peacock, Esq. on April 23, 2013 1:18 PM

The Wall Street Journal calls Mark Hayes a lobbyist for Humana, an insurance company that makes much of it's revenue off of Medicare. Bloomberg calls him a lobbyist for Greenberg Traurig. He's also a consultant for an investment research firm, Height Securities. The parties' intertwined relationships are starting to sound like a Mississippi family tree.

Greenberg Traurig represented both Height and Humana. The Journal published an email from an analyst at Height to a Humana lobbyist, which was met with an "out of office" email auto responder, that stated "You guys seem to have done everything you can. I wish you the best with rates this evening."

That same evening, an email from Hayes to Height alerted them that, based on "credible" sources, that a deal had been struck with the Centers for Medicare & Medicaid Services, and that the deal would be announced later that day. Height issued an alert and Humana and other insurance companies' stocks surged.

That's a lot of relationships, a lot of emails (stop using email, people! Remember, e-discovery!), and a lot of suspicious happenings. According to Bloomberg, a U.S. senator is now investigating the possible insider-trading mess.

And, of course, now the proverbial heads are rolling. Height has fired Greenberg Traurig, reports Bloomberg. According to the Journal, Humana has done the same and is investigating whether the actions of anyone associated with GT "in any way hurt Humana's interests." (Their stock price went up -- what are they complaining about?)

A bit of foresight can keep your company out of a similar mess. For one, your law firm, outside counsel, and/or lobbyist shouldn't represent companies with divergent interests. GT themselves should be looking at their policies regarding client selection and lobbyist employment. That lobbyist shouldn't be on the books of both an investment company and possibly a law firm and a healthcare company while lobbying for everyone's interests. It could be completely innocent. It looks illegal. And odds are, eventually, those interests will conflict.

Two, this practice of sending emails with questionably-legal information has to stop. Is there any doubt, at this point, that every email you ever send will somehow come back to haunt you?

If it looks like insider trading, and it smells like insider trading, don't send a freaking email. (Or, ya know, don't break the law. Either way works.)

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