Don't blame disclosure rules under Reg FD for the rise of expert networks and insider tips that culminated with the landmark conviction of Galleon Group chief Raj Rajaratnam on Wednesday, said National Investor Relations Institute CEO Jeff Morgan.
"I think the world has been built around people trying to get information nobody else has," Morgan told NIRI's IR magazine. "Reg FD tried to draw some boundaries. This case today shows those boundaries are going to be enforced."
Morgan said the high-profile conviction of Rajaratnam is a "learning opportunity" and chance for IR pros to reinforce internal policies about speaking to outsiders.
Read his thoughts at insideinvestorrelations.com (regis. req'd).
The SEC in January charged an IR firm executive in its case against Galleon.
Shammara Hussain, a staffer for Market Street Partners in San Francisco, was accused of tipping a former Galleon employee with insider info about client Google's 2007 Q2 earnings.