The Washington-based firm Height Securities is a small player in a burgeoning financial field where companies seek to acquire valuable information about even the most minor of federal actions and provide it to investors.

Yet a stock brokerage with only $7 million in reported annual revenue, a pittance by Wall Street standards, was apparently able to provoke a major surge in market trading. After Height Securities alerted clients to a pending government decision favoring health-care insurers, trading spiked in the shares of major health-care firms. With a federal investigation under way into these events, the activities have gained public attention.

But largely out of public view, the "political intelligence" industry has doubled in size over the past decade, by some estimates. What was once primarily a side business for law firms and lobby shops has grown so lucrative that it has spawned dozens of stand-alone firms that cater to hedge funds and other powerful corporate clients.