Market analyst and consultant Peter S. Cohan tells Annuity News Now about a three year Federal insider trading investigation.

(Peter Cohan) Ever wonder how Wall Street makes so much more money than everyone else? It turns out that investment banks are pikers compared to hedge funds. And the hedge funds at the top of the Wall Street pay hierarchy make their money by taking a cut of the assets they attract and the profits they earn. And the higher their profits, the more money they make. Thanks to so-called expert networks, some of those profits are attracting the interest of federal investigators.

How so? The Wall Street Journal reports that a three year Federal investigation is about to culminate in indictments related to hedge funds hiring expert networks -- firms that rent out former industry executives for a few hundred dollars an hour to hedge funds -- to get a jump on health care mergers.

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Peter Cohan is a columnist for DailyFinance. He is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. His ninth book, co-authored with Professor U. Srinivasa Rangan, is Capital Rising: How Global Capital Flows are Changing Business Systems All Over the World. The Achiever Newsletter ranked his eighth book, You Can't Order Change: Lessons from Jim McNerney's turnaround at Boeing, as the #1 business book of 2009. He teaches business strategy to undergraduate and MBA students at Babson College and has also taught at Stanford, MIT, Columbia, and the University of Hong Kong. He has appeared on ABC's "Good Morning America," CNBC, CNN, Fox Business News and the Boston ABC and CBS affiliates. He has been quoted in The New York Times, The Wall Street Journal, Bloomberg News, Time, Newsweek, Fortune, and Business Week.

Peter S. Cohan & Associates Web; Blog; Capital Rising