Hedge Fund Wants To Make Sure Its Employees Aren't Wearing Wires

the wire

So now that a major insider trading scandal has been exposed at a huge and well-established hedge fund, the entire industry must be taking a hard look at itself, right? Hedge fund managers must be scouring through their trades and making sure no one operating on their trading desks is trading dirty right?


The real reaction is just the opposite. Traders who learned from Eliot Spitzer’s reign of terror to be careful about what they write in emails are now also talking about having important conversations only face to face. And one hedge fund has even gone so far as to put feelers out to experts to make sure its employees aren’t wearing wires.

Neil Weinberg at Forbes reports:

The fund isn’t looking for legal or other guidance into how to ensure its employees comply with an ethical compliance policy. No, instead its concern is in making sure that any crooked dealings (or conversations that might be construed as such) aren’t captured on tape.

“It’s a lot like the worry they’ve already got with e-mails,” says Nathaniel Burney, a former New York City prosecutor who now does defence work for hedge funds and other white-collar clients. “Now phone calls are just another form of communication they have to be careful about.”

As they used to say in advertisements for HBO’s The Wire: “Rule Change. The Game Remains The Same.”

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