By Jonathan Stempel
NEW YORK (Reuters) - A federal judge on Monday put a key part of an insider trading probe on hold, saying a U.S. Congressional panel need not comply with subpoenas seeking details about possible leaks while it appeals an order enforcing those subpoenas.
Monday's decision by U.S. District Judge Paul Gardephe in Manhattan provides relief for the House Ways and Means Committee and former healthcare staffer Brian Sutter, who are challenging subpoenas from the U.S. Securities and Exchange Commission.
At issue is a probe into stock trading in the minutes after Washington, D.C.-based Height Securities on April 1, 2013 told clients about a pending change to Medicare reimbursement rates that could help health insurers such as Humana Inc.
Investigators have been looking in part at Sutter's dealings with a lobbyist at the law firm Greenberg Traurig, whose clients included Height Securities.
In an order dated Nov. 13 and made public three days later, Gardephe said the Ways and Means committee must comply with parts of the SEC subpoenas, and that Sutter could be deposed.
But in Monday's decision, Gardephe agreed with the committee and Sutter that the "balance of hardships tips decidedly in their favor," and that they could suffer "irreparable harm" if the subpoenas were enforced while they appealed.
The committee had argued in part that the U.S. Constitution shielded it and Sutter from being compelled to testify or produce documents.
"If respondents produce the documents at issue to the SEC, or if Sutter testifies, they cannot recoup the benefit of the privilege on appeal," Gardephe wrote. "This court concludes that respondents have satisfied the irreparable injury requirement."
SEC spokeswoman Judith Burns declined to comment.
A lawyer for the House panel and Sutter did not immediately respond to requests for comment.
The SEC probe is one of the first invoking a 2012 law called the Stock Act, which was intended to stop insider trading on Capitol Hill and prevent people from using "political intelligence" to trade non-public information.
Federal prosecutors in Manhattan are also probing the alleged leak, according to court and congressional records.
The case is SEC v. Committee on Ways and Means of the U.S. House of Representatives et al, U.S. District Court, Southern District of New York, No. 14-mc-00193.
(Reporting by Jonathan Stempel in New York; Editing by Diane Craft)