The morning the New York Stock Exchange hosted a panel entitled “Expert Networks: Issues and Opportunities for Public Companies”. The session was moderated by Keith Ackerman, who is Global Head of Next Generation Research at Thomson Financial. On the panel were Howard Dicker, Partner at Weil, Gotshal; Jonathan Glick, Director of Research Operations at the Gerson Lehrman Group; Michael Lynch, Managing Director, Global Commission Management at Merrill Lynch; and Michael Mayhew, Chairman & Co-CEO at Integrity Research. The video of the panel can be found here.

The discussion addressed many of the important issues surrounding expert networks and alternative research platforms, all of which are of massive importance to us here at KnowledgeBid. We’ve spent a huge amount of time and resources analyzing the legal and ethical issues that face our clients and the issuers they are researching. The group’s discussion this morning made it clear why investors use expert networks, but didn’t really identify “opportunities” for publicly traded companies in letting their employees consult investment managers. It is our view that there really is no benefit to a publicly traded company in permitting their employees to consult investors through expert networks. Employees that talk to investors outside of the scope of their employer’s investor relations group are likely either directly prohibited from doing so or should be prohibited from doing so since information leaked (or “sold”) by company employees to investors opens the door for fair disclosure liability.

Some members of the panel argued for all publicly traded companies to have an expert network policy that dictates what type of employee can consult and what they can talk about. That is a lofty goal, and would be very convenient for us here at KnowledgeBid, but until it is reached we will continue to prohibit employees of publicly traded companies to consult through our platform.

” . . . publicly traded firms only account for about one-third of all employment in the U.S. private business sector. Most workers at U.S. businesses are employed by privately held firms, ranging from family businesses to large, closely held corporations.” Steven J. Davis, Chicago GSB

Posted: 01/10/08 | Author: Rob | Category: Information, KnowledgeBid

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