Washington-lobbying group, Managed Funds Association, has requested the Securities and Exchange Commission (SEC) for guidance on using expert networks, The Wall Street Journal reports. The group is probing whether hedge funds and other investors traded on inside information received from corporate employees freelancing as consultants for expert-network firms.
The move has resulted in criminal charges against eight employees or technology-industry consultants, who worked for a California expert-network firm, Primary Global Research. Hedge fund firm, Barai Capital Management, has started to wind down its portfolios as part of the investigation. Expert-network firms connect investors with industry experts, including employees of public companies, for a fee.
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