Traders work on the floor of the New York Stock Exchange during mid-day trading in New York City.
Traders work on the floor of the New York Stock Exchange during mid-day trading in New York City. - 

BOB MOON: Today's the day for opening arguments in a much-watched insider trading case. A financial researcher is accused of passing on inside tips about a couple of leading computer chip makers.

Patricia Hurtado is a reporter covering the case for Bloomberg News and she's at the courthouse. This case involves something known as "expert networking" -- what's that about?

PATRICIA HURTADO: Well, it was a firm that basically had people that had some expertise in some publicly-held company and they would talk to hedge fund managers about the topic and trends -- how's the chip-making industry looking, how do the suppliers work. It was supposed to be general terms, but what the trial alleges is that it got corrupted and that non-public information was passed to hedge fund managers who were able to trade on that information ahead of a public announcement.

MOON: Yeah, I was going to ask how that could be insider trading. It sounds kind of borderline to me.

HURTADO: That's the argument that's been made that expert networking really wasn't wrong. Certainly the defense some of these people who've been accused of the insider trading charges have argued that their clients were basically doing what anyone else would do. This is information that if you were just really good at your job and you're a very aggressive hedge fund manager you would be on top of the topics and the new developments. The government alleges that it was corrupted though, that the information was given like earnings ahead of a public announcement.

MOON: Could this case have wider reaching ripples?

HURTADO: Well, I mean it does for the hedge fund industry because A) some of them are worried that they may be next. I mean the FBI executed search warrants that at a lot of hedge funds this fall. So it certainly does for the hedge fund industry. There's been some concern of maybe we should reconsider the usage of such expert networking firms.

MOON: Patricia Hurtado with Bloomberg News. Thanks for your time.

HURTADO: Thanks very much.