Expert networks, alternative data and managing risks of material non-public information

James G. Lundy, Margaret Gembala Nelson and Bill Mccaughey
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James G. Lundy: Partner, Foley & Lardner, USA
Margaret Gembala Nelson: Partner, Foley & Lardner, USA
Bill Mccaughey: Associate, Foley & Lardner, USA

Journal of Financial Compliance, 2023, vol. 7, issue 2, 189-194

Abstract: Expert networks and alternative data providers can be sources of invaluable information with which to make investment decisions, and they can play an important role in maximising returns from financial markets, but with the use of the sophisticated information they provide comes certain risks of regulatory scrutiny and even potential investigation for insider trading. However, a well-designed compliance programme can be tailored to monitor for, prevent, and detect red flags to avoid investigations and charges by financial enforcement authorities. Due diligence, the establishment of proper policies and procedures, and adherence to best practices will make the difference, not only in avoiding prohibited trading but in ameliorating the potential consequences if allegations of illegal behaviour arise. Financial advisers looking for an edge are well advised, themselves, to understand the risks and prepare against them.

Keywords: expert network; alternative data; material non-public information; MNPI; insider trading; investment best practices; SEC (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2023:v:7:i:2:p:189-194

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