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Let's assume the following: that I am one of thirty partners in a New York City law firm involved in representing Fortune 500 corporate clients in mergers and acquisitions. All of us are privy to confidential information that will affect the market prices of our clients' stocks. The SEC and FINRA have seen serious profits taken multiple times, all in advance of major events. If one of us supplying inside information to a conspirator, who is illegally trading and profiting from it,who is he, and who am I ?
Criminal investigators seeking to determine if investors engaged in illegal insider trading of publicly traded securities often have difficulties linking individuals who possess non-public information, with confederates who have traded upon that information. Even armed with the identities of investors who made extraordinary profits based upon the subsequent release of positive business news, investigators often cannot uncover the necessary connections. The result is that many "Tippees" who have profited from their crimes are never charged. It was impossible to track them back to the source who divulged the inside information.
Enter into the equation a research tool that enables the investigator to diagram, and inspect not only indirect relationships, but relationships separated by more than one degree, connections that are so remote that conventional inquiries will never link them up. This is accomplished through the use of computer algorithms that scan all available social media sources, a feat that would literally take years to accomplish manually.
Therefore, returning to our initial fact pattern, graphs and charts, created by those algorithms, result in uncovering two indirect connections, which I employed to effectively deny investigators access to my conspirators.They are now identified, as a former co-worker from my first lawyer job,as an assistant district attorney, and that friend's onetime university roommate, twenty years ago.These individuals who would most likely never be found through conventional means, would be identified, and linked to me, due solely to an asset that represents the application of technology to social media information.
Chronicles of Monte Friesner - Financial Crime Analyst
Contributed by Kenneth Rijock- Financial Crime Consultant
