The latest insider trading investigation is focusing on the new hub of Wall Street information: independent research networks that pay so-called experts for information on public companies.
What is it with Wall Street these days that it won't let a record stand for the usual amount of time? First, Marc Dreier gets one-upped by Bernie Madoff. Then, Bear Stearns gets bested by Lehman Brothers. And now the Galleon insider trading scandal—only a year old!—looks like it's going to get dusted by the latest insider trading probe on Wall Street.
According to the Wall Street Journal, one of the Feds' targets in this probe is not a new one: so-called expert networks, which provide research "services" to hedge funds and mutual funds. Such services can include data and analysis, but very often consist merely of connecting a hedge fund analyst with an "expert" who might be a customer, client, or even employee of a company that the fund is an investor in. The networks reportedly being investigated are ones that most of us have never heard of: Primary Global Research and Broadband Research, both outfits that provide customers with intelligence about the technology industry.
This is not the first time these kinds of companies have found themselves under the legal microscope. Nearly four years ago, the New York attorney general took a look at a couple of the big players in the third-party research space, Gerson Lehrman Group and Vista Research. Nothing much came of it at the time. And neither has been mentioned in this go-around. (Not that they're not on high alert: An email has circulated at Gerson reminding employees that they are not to speak to the press.) More
|4 federal agencies to shut Friday|
|Mailbox comes to the iPad|
|Chrysler jabs Tesla over loan repayment|
|Wall Street weathers the storm|
|Who's the killer employee under Obamacare? No. 50 or 51?|