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    Situation

    The Department of Justice launched a major insider trading investigation across Wall Street. Ultimately, the number of prosecutions would be in the dozens. One of the first major cases involved a hedge fund manager who had obtained non-public, material information from a third-party expert who was under contract advising a variety of companies. When the Department of Justice began its inquiry into this manager and his suspected hedge fund insider trades, the manager denied any wrongdoing and also induced the third-party expert to do the same.

    Solution

    Montieth & Company advised on this and other insider trading investigations as they multiplied, including counseling the companies who provided the third-party experts. These clients had a variety of complex legal, regulatory, business and reputational challenges. The Department of Justice’s investigative resources were significant, and it deftly used the news media to shape coverage before, during, and after indictments and throughout the trial cycle. In other hedge fund insider trading investigation cases we advised on, employers sought to “claw back” compensation from the executives who were prosecuted, and block deferred compensation, which led to civil litigation.

    Results

    Montieth & Company’s first objective was to insert itself in the evolving news cycles being driven by the Department of Justice’s actions and media management. While the government was aggressively putting our insider trading investigation clients on the defensive, we found new options for managing the media and shaping the narrative –in some cases keeping our clients entirely out of the news and under the media’s radar.

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