The Office of Congressional Ethics is investigating the chairman of the House Financial Services Committee over possible violations of insider-trading laws, according to individuals familiar with the case.

Rep. Spencer Bachus (R-Ala.), who holds one of the most influential positions in the House, has been a frequent trader on Capitol Hill, buying stock options while overseeing the nation’s banking and financial services industries.

The Office of Congressional Ethics, an independent investigative agency, opened its probe late last year after focusing on numerous suspicious trades on Bachus’s annual financial disclosure forms, the individuals said. OCE investigators have notified Bachus that he is under investigation and that they have found probable cause to believe insider-trading violations have occurred.

(Washington Post investigation: Capitol Assets)

The case is the first of its kind involving a member of Congress. It comes at a time of intense public scrutiny of congressional ethics, with the House passing legislation Thursday to tighten rules against insider trading by lawmakers. The impetus for the legislation, a version of which passed in the Senate a week earlier, came from a “60 Minutes” report and a book mentioning Bachus’s trades, “Throw Them All Out,” by Peter Schweizer.

“The Office of Congressional Ethics has requested information and I welcome this opportunity to present the facts and set the record straight,” Bachus said in a statement issued Thursday by his spokesman, Tim Johnson.

Omar S. Ashmawy, OCE staff director and chief counsel, declined to comment. “The office does not confirm or deny whether an investigation is taking place.” Chief counsel for the House Ethics Committee, Dan Schwager, also declined to discuss the case. “The committee doesn’t comment on specific matters or allegations,” he said.

OCE investigators are examining whether Bachus violated Securities and Exchange Commission laws that prohibit individuals from trading stocks and options based on “material, non-public” inside information, said the individuals, who spoke on the condition of anonymity because of the sensitivity of the matter. The office also is investigating whether Bachus violated congressional rules that prohibit members of Congress from using their public positions for private gain.

In recent years, Bachus has made numerous trades, some of them coinciding with major policy announcements by the federal government and industries under his congressional oversight, according to a review of his financial disclosure forms by The Washington Post.

Most of his investments are for less than $10,000, and almost all involve options rather than stock purchases. The options allowed Bachus to buy or sell stocks at certain prices in the future — betting that the value of those stocks will rise or fall.

A Fidelity brokerage statement Bachus submitted for 2008 shows that he made $30,474 in short-term investments, many of them bought and sold in a matter of days, sometimes during the same day.

The former member of the House Transportation and Infrastructure Committee made several options bets on railroads. While President George W. Bush’s fiscal stimulus bill was being crafted in summer 2008, Bachus bet that the stock of Burlington Northern Railroad would rise, and he cashed out that July for a $16,588 profit. In August, he made the same bet but lost $2,900.

On Sept. 18, 2008, at the height of the economic meltdown, Bachus participated in a closed-door briefing with then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben S. Bernanke. At the time, he was the highest-ranking Republican member of the Financial Services Committee. According to a book Paulson would later write, the topic of the meeting was the high likelihood of decline across the entire economy if drastic steps were not taken.

The next day, Sept. 19, Bachus traded “short” options, betting on a broad decline in the nation’s financial markets, and collected a profit of $5,715. Also that day, he cashed out options in which he had bet that General Electric stock would rise, and collected a $12,713 profit, before GE’s stock price started to tumble, The Post found.

The short options betting on an economic downturn were reported in “Throw Them All Out,” which was the basis of the “60 Minutes” story, which aired Nov. 13. Bachus criticized the reports, calling allegations that he engaged in insider trading “absolutely false.”

But the book inaccurately said Bachus bet on GE’s price to fall rather than rise. Schweizer acknowledged his mistake but said it made no difference to his larger point.

In a letter to the publisher, Bachus attacked the book for the mistake about GE. “The book is absolutely false and factually inaccurate when it states that I ‘shorted General Electric options’ and did so ‘four times in a single day.’ ”

He also said there was no inside information provided in the briefing by Paulson and Bernanke.

“The idea that I or anyone else needed this meeting to know our financial markets were in trouble is just laughable,” he wrote in the letter. “You would have to be living under a rock not to know by September 18, 2008 that the economy was in bad shape.”

He said a press conference held immediately after the briefing revealed what was discussed.

“This meeting was so ‘secretive’ that members of the press knew about it beforehand, were waiting outside the door, and a press conference was held immediately after the meeting to inform the public about what we discussed,” he wrote.

In October, Bachus bet on the market going up, but this time he lost $21,558.

Bachus said he gave up his “hobby” of trading when he became chairman of the Financial Services Committee after the Republican takeover of the House in November 2010. Although he has sometimes made money on trades, his financial disclosures indicate that his net worth has been cut in half during his time in Congress, declining from up to $2.3 million in 1995 to up to $1.1 million at the start of this year.

Bachus was elected in 1992. Before coming to Congress, he served in the Alabama Senate and worked as a lawyer. He is originally from Birmingham and lives south of the city in Vestavia Hills.

The Senate passed its version of the Stock Act last week. The legislation will make it easier for SEC officials to prosecute insider-trading cases against members of Congress, their staff and top officials in the executive branch. It will also require them to disclose all stock trades every 30 days.

Earlier stories in The Post and the Wall Street Journal described the lack of stringent rules governing Congress and the conflicts presented by assets owned and traded by lawmakers and their public roles. Post stories detailed the reporting weaknesses in the disclosure system, which cannot be electronically searched. The Stock Act requires electronic filing of disclosure forms.

Differences between the measures will be taken up in a conference committee.

The Office of Congressional Ethics was created in March 2009 in response to public criticism that the House Ethics Committee was failing to properly police its members.

The OCE conducts independent investigations into allegations of misconduct against members, officers and staff. However, its powers are limited. It cannot compel a member to cooperate with an investigation, and it does not have subpoena powers.

Once the office completes its investigations, the results are forwarded to the ethics committee. That committee has the final say on whether a violation has taken place and what sanctions, if any, should be imposed.

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Washington Post investigation: Capitol Assets

Staff writers David S. Fallis, Paul Kane and Kimberly Kindy and staff researcher Lucy Shackelford contributed to this report.