Insider Trading Investigation Focuses on ‘Expert-Network’ Services

November 24, 2010

(ChattahBox U.S. News)—Federal authorities including the FBI have a lot of questions for investment firms, and most of them involve the companies’ dealings with so-called “expert-network” services, the Wall Street Journal reports. At issue is whether hedge fund companies such as SAC Capital Advisors and Citadel LLC, as well as mutual fund company Janus Capital Group, may have any knowledge on whether expert-network firms leaked inside information.

Known as a way to get an investment advantage, the expert-network companies “set up meetings and arrange calls between traders seeking an investing edge and current and former managers from hundreds of companies,” WSJ reports. An account manager at one expert-network firm, Primary Global Research LLC, was recently questioned by the FBI and was asked to tape his calls with SAC Capital Advisors, but refused.

Expert-network firm executives are prohibited from releasing confidential information, but executives at some of these firms indicate that those rules don’t always stop consultants from sharing prohibited information under client pressure, either on purpose or by accident, WSJ notes. The investment firms that received subpoenas on the matter deny any wrongdoing and note that they fully intend to cooperate with any government requests.


Comments

Got something to say? **Please Note** - Comments may be edited for clarity or obscenity, and all comments are published at the discretion of ChattahBox.com - Comments are the opinions of the individuals leaving them, and not of ChattahBox.com or its partners. - Please do not spam or submit comments that use copyright materials, hearsay or are based on reports where the supposed fact or quote is not a matter of public knowledge are also not permitted.