“Expert Networks” have been receiving a lot of attention lately thanks to allegations that one individual at one such firm was involved in insider trading. Whereas, we appreciate the “free publicity”, I feel it important to share my thoughts about this incident and the industry as a whole. First, I should point out, that Zintro is different than traditional expert networks – most of our business comes from non-institutional investors. Second, I think it is important to remind people not to generalize the alleged offenses of one individual at one firm to the overall industry.
Let me make one thing perfectly clear. In it’s short life, Zintro has never been involved in (or accused of) any illegal or unethical behavior – not even close. We provide a valuable service to companies looking for consultants and consultants seeking to generate leads for their businesses. Yes, a small percentage of our clients are hedge funds and yes they are typically seeking to learn about the industries in which they are investing. But the investors (and everyone else) using Zintro have always acted in a professional, legal, and ethical manner. Not to mention that Zintro’s strict terms & conditions require that they do so and Zintro provides tools to help them ensure compliance.
That said, let’s look at the big picture. Cheaters will cheat. The investment community & regulators should go after the cheaters whether they work at a hedge fund, expert network, investment bank, or anywhere else. In the news, as of late, expert networks have been discussed to be part of the insider-trading problem. I completely disagree. Yes, expert networks bring together investors and experts in the field. But so does LinkedIn or the phonebook for that matter. Blaming expert networks for insider trading is like blaming Ebay for the sale of stolen goods. EBay monitors its network to ensure it does not become an outlet for illegal activity. Expert networks do the same. In fact, not only are expert networks not to blame for insider trading, with proper monitoring and professional management, they can actually be part of the solution!
Look at it this way. People who cheat, don’t want to leave clues of the illicit activity. Expert networks create an audit trail of all communication between users. Moreover, expert networks provide a very clear framework for ensuring compliance. Without expert networks, investors (who have a fiduciary obligation to collect the best information they can legally obtain) will contact industry experts directly without any trail and without any compliance framework. Perhaps the industry should mandate all such calls to go through expert networks?
Zintro.com has over 17,000 experts and over 2,500 clients. Experts are from numerous industries, countries, and professions including physicians, engineers, scientists, mid- and senior-level managers, independent consultants, and business owners, among others. Clients include consulting firms, market researchers, investment firms, private equity firms, venture firms, law firms, recruiters, entrepreneurs, journalists, engineers, and business development executives, among others.
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CEO, Zintro Inc.
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