Harsh light on expert networking business

The so-called expert networking business is back in the spotlight thanks to the unfolding Galleon hedge fund (Galleon Group news) insider trading scandal. Expert networking firms--the Gerson Lehman Group is the best known standalone company--essentially act as matchmakers, pairing up industry experts with hedge fund managers and traders.

The trouble is that a lot of these industry experts, whose insights are in heavy demand, also have a lot of proprietary information. Some may be tempted to cross the line and divulge that information. Others may do it unwittingly.

The business has been hit hard, according to Reuters, which notes data from Research Associates that show revenue for the matchmaking industry fell about 16 percent to $360 million in 2009. It also notes that "it may take until 2013 before the industry tops the $430 million in revenues it tallied in 2008." Plenty of firms are restructuring. JPMorgan (NYSE: JPM) spun off its firm Primary Insight, and McGraw Hill sold its Vista Research division. Thomson Reuters is aiming to enhance its compliance features.

For more:
- here's the Reuters article

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