Saturday, November 20, 2010
The WSJ is reporting that the FBI has an insider trading dragnet in the works (also being reported by Bloomberg). From the tone of the article, it sounds like it could be bigger than the Galleon sweep. They reprinted an e-mail from Broadband Research to its clients:
"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."
Another research firm in the article suggests that as many as three dozen firms have been contacted as part of this investigation. The focus of the investigation are apparently expert-network firms that connect hedge funds and professional investors to experts and consultants, some of whom I imagine have inside information.