SEC Validates Use of Expert Networks
New York, March 23, 2011 –Director of Compliance Inspections and Examinations at the SEC, Carlo di Florio, validated the legal use of the expert networks in his speech to investment advisors at the Annual IA Compliance Best Practices Seminar held in Washington on March 21.
In his speech, di Florio states, “…I would like to briefly mention the ‘Expert Network’ insider trading cases that the Commission and the Department of Justice have recently brought, and that have received much recent press coverage. There are many interesting dimensions to this line of cases, and they seem to have spawned some urban legends and misunderstandings about what I believe is the staff’s intent. Contrary to some reports that I have seen, I believe these cases do not represent some inherent hostility by the Commission toward expert networks, nor do they indicate that the Commission is seeking to undermine the mosaic theory, under which analysts and investors are free to develop market insights through assembly of information from different public and private sources, so long as that information is not material nonpublic information obtained in breach of or by virtue of a duty or relationship of trust and confidence.”
Primary Insight has led the expert network industry with its best-in-class pre-trade compliance framework and sophisticated compliance technology. Understanding the issues surrounding one of the largest insider trading investigations, Primary Insight’s compliance tools have become extremely important and a top priority for the firm. It has put extensive time and resources into its Compliance Portal technology built for and designed by Legal/Compliance Officers, which provides global oversight of all firm activities as it relates to using third-party consultant interactions.
Some features and benefits include:
- Global online project monitoring of all research activity.
- “Approve or Deny” functionality for Legal/Compliance Officers of any subset of consultants.
- Customization of Client’s own compliance procedures and requirements that is presented to consultants prior to every interaction.
- Employed consultants must “opt-out” if project or joining the network poses a conflict with third-party agreements.
- Complete audit trail organized by date, firm analyst, firm office/region, consultant bio, consultant company, topic of meeting and length of interaction; all customizable by client need.
About Primary Insight
Founded by industry veterans in 2005, Primary Insight, LLC has a custom approach in providing institutional money managers access to a diverse, global network of experts across all industry sectors. Primary Insight differentiates itself through the delivery of fresh, non-commoditized experts who have had limited exposure to the investor community. Primary Insight emphasizes quality over quantity in order to provide the most appropriate experts for each investor call. The firm currently serves top institutional investors in the US, the UK and globally. Please contact Primary Insight at www.primaryinsight.com.