Foege also makes a powerful argument that insider information isn't as unique than as it seems. Take the red-hot case of Dr. Sidney Gilman, a recently retired University of Michigan professor, and Mathew Martoma, an ex-analyst with a shop called CR Intrinsic Investors. SEC documents break down in grisly detail how Gilman was allegedly paid $1,000 an hour to feed Martoma insider data concerning details of an Alzheimer's drug trial from Elan (ELN). Martoma was fed knowledge by Gilman of the looming failure of the trial before the larger market knew, the SEC said. Martoma restructured his company's investment in Elan, supposedly netting $276 million for the firm -- and a $9.3 million bonus for himself. Foege agrees that while the specifics of trials are often secret, such medical research is often done in a near public, peer-reviewed fashion, putting a surprising amount of data in plain sight. What the supposed one-of-a-kind, expert tipster is offering as "insider information" is much more fluid -- and more visible -- than uneducated investors think, making the risks the company was running crystal clear, he said. "I've done enough medical device research to tell you," Foege said. "This kind of work is not done in a vacuum," Why bother?
Which leads investors to the obvious question: If the digital age offers so much of the information investors need, why do the rich and powerful mess with what might be dangerous data? "Analysts are under a huge amount of pressure to reach performance goals," Foege said. "And they are looking for an edge. So sometimes they miss the information forest for the trees." The problem is, in the digital age, if you wander in that forest for too long, you may wind up stumbling into the woodshed.