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To Wall Street but maybe an enemy of the Department of Justice he is the man who blew the whistle on the massive insider trading investigation and now Fox Business has learned a the feds are targeting at least two dozen hedge funds.
Understand declined to Wear a wire when the FBI paid a surprise visit to his home senior correspondent Charlie Gasparino joining us now with John -- -- was the founder of brought every search with us from Portland Oregon who has exclusive new details of the case welcome to you both.
Thank you get jobs but thanks for joining us in a -- butcher your last name loses his smack me -- -- it's it's gonna get a connection.
And it's Connecticut but certainly wouldn't be the first time well there's there's a headline right there let's get right to you went public saying a couple FBI guy showed up on your doorstep.
Couple weeks ago and an -- they want to -- where wired to open trap a client in this massive insider trading investigation.
Have they seen you since -- they called a nuisance to you have you heard anything since.
I am not so not at all about not one word nothing okay.
You said you believe that -- this investigation that you're kind of you're you're kind of -- obviously -- -- -- house.
And that you believe your phone its patent is accurate.
Well yeah they did threaten to arrest me on the spot a number of times and they gave me to believe that they had tap my phone that's right.
And what led you to believe that they were tapping your phones.
They offered to play some recordings.
That if they say of what.
Well and then also mentioned a bunch of guys -- The people I've spoken with over the last -- couple months I guess so it was pretty clear that they that they were listening in on your conversations.
Either that or they have very good information there and we're good god good bumpers put it that way OK when they're not usually Google offers via.
One other thing is there a couple commentators have said that you might have made the whole thing up I think someone from Forbes.
-- your story to the bubble -- the balloon boy story I -- I can say for the record that Fox Business Network.
Has confirmed through regulatory sources that this did occur so just for the record.
-- story matched up based on on our reading getting back to what your job is often you deal in non public information.
You said in a recent F New York Times editorial -- that's gonna definitely going to be published.
Some of the stuff is a gray area do you ever worry that this stuff you do as an independent researcher.
Giving this information to hedge funds and mutual funds your client than ever crosses the line from that gray area -- possible insider trading.
Well again as I mentioned in the editorial.
This is that continual issue with -- on the FCC.
Has declined to clarify this.
Gray area to shrink it and and their resolve it as a war.
And so we take our cues from what's in the marketplace and when we see all the major banks lark or I should say large and small investment banks and literally the hundred firms that or more that do what I do.
And that will we see them engaging in these -- type of quote unquote channel checks for years as I said openly publishing.
IPhone production changes and numerous other so called channels tax that would never we -- -- -- totally correct that that sort of stuff is not.
Generally public it's maybe not material maybe doesn't constitute insider trading but.
The average guy we know that unless they knew someone inside the company correct.
The -- inside the company generally comes from third parties add value added resellers or.
Somebody had yet says somebody who's been in the supply chain or and and downstream.
Say their ups upstream or downstream of the company.
Yes and so.
You know Charlie it's my understanding that the role of the SEC is to watch over the financial markets and if they see something that they're not happy -- They're supposed to -- issue an order saying not basically knock this off.
And then if people don't knock it off that's when the Justice Department comes and and and enforces the rules.
Now it seems to me if if the SEC is watching this go on for years which they presumably have been if they're doing their job.
And they haven't chosen to stop -- they it's been given their implicit blessing.
So that's the interpretation I've I've made my I think.
-- literally entire industry's made including not only other researchers and hedge funds but the entire mutual fund complex who also is that.
Huge user -- this type of information and it's pedestrian I end before it turns over the -- want to ask a question.
Based on everything you know you don't believe you stepped over the line in handing out illegal insider information.
OK so based on that you say that's true but -- John what about the people who work for you for example these experts.
That are part of the expert network part of your research organization.
Can you be sure.
That these people some of them I assume -- former company insiders who were super Smart people who've been on the inside they understand the business that's why -- hire them can you be sure.
That they have followed the same rules that you follow.
Well -- I need to clarify I I do not conduct operate.
And that an expert network as it's understood in the industry.
I operate an independent research boutique of which there are hundreds packed new one every day you can't keep track of them all so I don't connect.
Fund managers with experts okay what I do is I go around and try to understand what's happening in the industry.
And there are various companies in the industry at large strategically.
And tactically as -- -- and communicate that to my Klein.
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