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

Author

Listed:
  • Lundy, James G.

    (Partner, Foley & Lardner, USA)

  • Nelson, Margaret Gembala

    (Partner, Foley & Lardner, USA)

  • Mccaughey, Bill

    (Associate, Foley & Lardner, USA)

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.

Suggested Citation

  • Lundy, James G. & Nelson, Margaret Gembala & Mccaughey, Bill, 2023. "Expert networks, alternative data and managing risks of material non-public information," Journal of Financial Compliance, Henry Stewart Publications, vol. 7(2), pages 189-194, December.
    • Handle: RePEc:aza:jfc000:y:2023:v:7:i:2:p:189-194
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    More about this item

    Keywords

    expert network; alternative data; material non-public information; MNPI; insider trading; investment best practices; SEC;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

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