Global articles on espionage, spying, bugs, and other interesting topics.

Hedgies Are Paranoid About Wiretaps

You know who else was constantly paranoid about wiretaps? The Wire’s Russell “Stringer” Bell. For good reason.

The Fed’s insider trading investigation is giving the already cagey hedge fund industry more reason to be paranoid lately.

Hedge fund managers are paying security firms to check their offices and homes for bugs and listening devices, according to the FT. The suspicious bunch want to know whether or not the government is listening in on their conversations.

The paranoia was set in by the Fed’s insider trading investigation that’s charged dozens of hedge fund employees and expert network employees for their involvement in receiving and sharing non-public information about companies like Apple, Dell, AMD and Marvell.

The hedge fund industry is very opaque and one of the least regulated areas of the financial industry. So it comes as little surprise that fund managers are paying money to find out if anyone is listening in on their super-secret trading activity.

But doesn’t the mere act of hiring experts to sweep your home and office for wiretaps implicate a bit of guilt? That’s not to say every firm that’s paid for a sweep of their office is the next RajRajaratnam but if you’ve got nothing to hide, why all the fuss?

Before the privacy police get on my case, I want to clarify that I agree with the principle behind average citizens wanting to know whether or not the government is watching and listening. However, I don’t think the hedge fund industry should be placed on the same level.

Besides, as a computer forensics expert tells the FT, it’s highly unlikely that most hedge funds are being tapped anyway.  Edward Stroz of Stroz Friedberg tells his clients to think twice before requesting the sweeps. He asks them: “What led you to think this? Is it really worth the effort, or are you thinking back to some movie you saw?”

I wonder how many hedge fund managers are catching up re-runs of HBO’s The Wire. How many of them are sitting around living a scene similar to this one? Perhaps minus the part about ripping payphones out of the walls. But maybe not.

(Warning: Foul language.)