Let's be clear: Nobody anywhere near this debate -- that means me, De Santis or anybody I interviewed -- is minimizing the risk folks such as Gilman and Martoma may or may not try to cheat using expert networks. But the sheer scale of these systems makes Wall Street look itty bitty by comparison. Gerson Lehrman, who confirmed that De Santis had used its networks, confirmed it had more than 350,000 registered individuals on its micro-consulting platform, which is used by more than 1,000 institutional clients and growing. "We've heard people say we can be disruptive to traditional industries," Alexander Saint-Amand, president and CEO of the Gerson Lehrman Group, wrote me in an email. "But we've seen we can not only be an asset to private equity firms and corporations who are engaged in M&A activity as well as to the research and advisory firms working on these deals." Considering that the company has arranged more than 1 million such engagements over 10 years, Gerson has clearly learned a thing or two helping investors see a buy from a sell. Knowledge it shares openly in its website's Client Blueprint is a recipe for pretty much every step of the mergers and acquisition process.
If you have the courage to view traditional banking mergers and acquisitions through De Santis' eyes, the M&A business is clearly showing symptoms of an information-based market in the early stages of digital decline. Certainly a sluggish economy has been no help, but M&A profits have quietly leaked out of banking company balance sheets over the past year. FT.com did a fascinating comparison of the percentages banks made from different products over the past dozen months. And almost across the board, M&A is heading south. Total M&A fees as a percentage of total sales fell to 32% from 36% last year. That as total fees also dropped to $72 billion from $78 billion. Worse, total M&A deal flow was in free fall -- going from more than 8,000 in Q4 of 2011 to south of 6,000 by Q4 2012. And to De Santis, this is only the beginning. "I believe more and more, wherever capital resides either in private equity or in corporate investments, investors can easily use their own staffs to troll these expert networks," he said, "and for a few hours of paid time get a clearly less biased opinion than from a M&A banker who only gets paid if there is a successful deal." To these tired eyes, it's digital age Groundhog Day all over again: The mergers-and-acquisition industry will join the music, publishing and media businesses in wrestling a Web animal it has never seen -- top flight, on-demand, crowdsourced content that can be accessed easily by any serious market player. And you don't need to be a Gerson Lehrman expert to see where the shadow is being cast on this day. It's gonna be a long, tough winter for M&A.