RE: Todd Newman and Anthony Chiasson and the U.S. government (see http://www.nytimes.com/interactive/2014/12/10/business/dealbook/document-insider-trading-convictions-overturned.html) – The laundering of data originating from the insider-tipper through layers of intermediaries and associates to the tippees, including hedge fund portfolio managers, routinely occurs without transparency. That is, the tippees will rarely be vulnerable to having known both of the improper leak of confidential information (e.g., breach of the publicly traded corporation’s policies and procedures) and the receipt of a personal consequential benefit by the tipper in exchange for initiating this flow of information (e.g., financial gratuity to the tipper). This has an effect similar to the limiting of the honest services theory of fraud to instances where it is accompanied by proofs of bribery and kickbacks.

Data, including opinion and rumor, flow through the offices (and cubicles) of investors and traders like the wind. Expecting those breathing in these puffs of speculation, corroborated and uncorroborated, to perform a thorough due diligence before acting upon these shared breaths of information would certainly increase the costs of investing and trading and inevitability slow down the decision-making process, unless one were unconcerned with making a profit (in which case eating what you kill would become a new weight loss diet). While the U.S. government certainly possesses the resources and mission to conduct enhanced and costly due diligence where appropriate, hedge funds and other investors / traders likely do not. Data becomes tainted somewhere along their course of transmission, but this is usually imperceptible – a job for professional eavesdroppers, perhaps, but not for those attempting to profit from anticipating the difference between commercial puffery (e.g., pie-in-the-sky business models) and real economic advantage (e.g., an efficient technology of energy transformation).