The Next Chapter In Expert Networks

CBS has a great report on Congressional exemption from insider trading rules.  Stick around till the end where they unveil to the public another iteration of Expert Networks: Political Intelligence.

Political Intel isn’t something particularly new, but I get the feeling we’ll be hearing much more about it in the near future.

From the WSJ:

At a breakfast fund-raiser last year at the Liaison Capitol Hill hotel, former lobbyist Paul Equale pulled up a chair next to Sen. Richard Durbin. As they chatted, the Illinois Democrat told him about a recent breakthrough in his efforts to push through a bill to cap debit-card fees.

In Washington, such shop talk between political insiders is so routine that it hardly warrants mention. For Mr. Equale, however, it yields intelligence that fetches good money on Wall Street.

Mr. Equale works as a consultant for Gerson Lehrman Group Inc., which connects Wall Street investors hungry for information with Washington insiders who possess it. After hobnobbing with Mr. Durbin, Mr. Equale shared his conclusions about the debit-card legislation with hedge funds including Perry Capital and Jana Partners. Both funds subsequently traded in the stocks of Visa Inc. and MasterCard Inc., according to regulatory filings. It is unclear what role Mr. Equale’s report played in their investment decisions.

Information about what’s happening in Washington is at a premium on Wall Street these days. Government regulatory changes and economic initiatives following the 2008 financial crisis have affected numerous industries, and even minor shifts in policy can be of interest to hedge-fund managers. When the health-care bill was snaking its way through Congress in 2009, for example, hedge funds wanted to know about every twist and turn. They followed the debt-ceiling showdown over the summer just as closely.

Read also: Hedge Funds Pay Top Dollar for D.C. Intel (WSJ)

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