In the wake of the alleged insider-trading ring involving hedge fund manager Galleon Group, compliance departments at asset management firms and broker-dealers are stepping up their vigilance.
As regulators increase their scrutiny of insider trading, firms are actively reviewing their compliance policies, making sure that employees understand them and conducting more audits of their trading patterns to make certain that nothing is potentially amiss...
The main worry at firms is that employees could be sharing information and unwittingly contributing to an insider-trading scheme...
Compliance departments also are making sure employees are careful with how they use other forms of media, such as voice-over-Internet, social-networking websites such as Twitter, and blogs.
“People need to understand that the law is the law, no matter what communication medium they are using,” said Ralph “Chip” MacDonald, a partner at Jones Day. (more)
An unpublicized element of this due diligence are Eavesdropping Detection Audits (TSCM).
