In the late 90's the SEC rolled out Reg FD to level the playing field, which really limted salestraders on Wall Street from tipping off the firms largest clients about earnings before they were released. Based on the recent raids on hedge funds it look's like the Feds intend to expand laws based on research and industry channel checks which has become a huge business in Financial Services, and have a nice holiday high tech lynching. John Kinnucan appeared on CNBC talking about the Fed's showing up at his door and asking him to wear a wire...this story has some legs..stay tuned!!!
Officials from the FBI, SEC and New York federal prosecutors are currently conducting a major insider trading case that spans both coasts and small to major investment related firms. The investigation appears to center around the fear that independant analysts and consulting firms have passed on inside information to hedge and mutual fund managers who then used that information in financial transactions, making them illegal.
According to a Wall Street Journal article from November 20th, a Portlander is involved in some fashion. It is not clear, however, if this person is under investigation or an innocent witness. From the WSJ article: Independent analysts and research boutiques also are being examined. John Kinnucan, a principal at Broadband Research LLC in Portland, Ore., sent an email on Oct. 26 to roughly 20 hedge-fund and mutual-fund clients telling of a visit by the Federal Bureau of Investigation.
“Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information,” the email said. “(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman’s gracious offer to wear a wire and therefore ensnare you in their devious web.”
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