NEW YORK (CNN/Money) - Some members of Congressional committees investigating how corporations compensate preferred investors with lucrative initial public offering stocks have themselves benefited from these same practices, according to a published report.

In a call for hearings last week, New York Rep. John LaFalce, the House Financial Services Committee's top Democrat, stated that IPO allocations based on inappropriate issues was one of many atrocious but not illegal investment banking practices. However, according to The Wall Street Journal, in 1995 LaFalce secured $15,000 of IPO stock in Healthcare Services Corp., some of which he sold for a more than $5,000 profit three months later.

When asked about it, Mr. LaFalce denied getting any favorable treatment from his broker and claimed to have lost money overall. He stated that his comments at the call for hearings were not a statement against IPOs, but rather a need to make the practice more open.

Many other politicians benefited in the 1990s, the golden age of IPOS, in which stocks were bound to surge almost immediately, the paper said. Gary Ackerman, a New York Democrat on the Financial Services Committee, and California Democratic Sen. Barbara Boxer, who sits on the Senate Commerce subcommittee on consumer affairs, were among those mentioned.

The practice was first publicized in 1993, when it was disclosed that Tom Foley, who was the House Speaker at the time, had made more than $150,000 in a five-year period arranged through a friend.

In addition, former New York Republican Sen. Al D'Amato earned a $37,125 profit in 1993, on Computer Marketplace's IPO. Despite his denials of any wrongdoing, an SEC inquiry determined that his broker had bent its rules in the transaction, although the Congressional Ethics Committee found no improper conduct.

Despite the controversy surrounding these transactions, other politicians continued to trade in IPOS, including New Hampshire Republican Senator Judd Gregg, who benefited from Palm's IPO as well as Sen. Fred Thompson, a Tennessee Republican and California Democrat Nancy Pelosi, the House minority whip. The wives of Reps. Peter Deutsch, a Florida Democrat, and Lloyd Doggett, a Texas Democrat, and Sen. Jeff Bingaman, a New Mexico Democrat, also have been given access to IPOs, although all denied receiving inappropriate preference.

The practice of favoring prominent institutional and individual investors and other VIPs with IPOs has largely left out the average investor. While neither Congress nor past administrators have ever taken official steps to make the practice more fair, recent concerns about corporate governance have changed that sentiment considerably.

Among the most recent controversies was news that Citigroup's Salomon Smith Barney unit gave almost 1 million IPO shares to WorldCom executives who were giving the firm tens of millions of dollars in investment-banking business.

The House Financial Services Committee has subpoenaed documents on the matter and has asked brokerages such as Credit Suisse First Boston and Goldman Sachs group to hand over documents on their IPO allocations.

Last month, Securities and Exchange Commission Chairman Harvey Pitt requested that the National Association of Securities Dealers and the New York Stock Exchange reconsider the IPO process and review potential anti-favoritism rules above and beyond the ones recently proposed sending to the SEC for approval.

While the Congressional ethics committees have never issued rules on IPOs, House and Senate rules and federal law prevent members from taking anything in exchange for official action.

The Senate Commerce subcommittee on consumer affairs is likely to hold IPO hearings later this month, the paper said.