This week the WSJ reported on a form of trading that looks a lot like insider trading, but may not quite cross the line. The WSJ highlighted a Washington lobbyist named Paul Equale, a consultant who "helps companies navigate regulatory channels in Washington" and is a regular donor to many politicians. 

Equale also has a side job working as a consultant for Gerson Lehrman, a large "expert network" firm.  Since 2005, the WSJ reports, Equale has been hired hundreds of times by hedge funds and others to provide inside information on what's happening in Washington, such as the status and prospects of key legislation. Equale has earned about $400,000 working as such an expert.

Sometimes Equale's advice to hedge funds and other investors about potential legislation that may impact a stock is based on private discussions with key lawmakers. As the WSJ notes, 

Securities laws don't, however, bar most political insiders from sharing nonpublic information about government affairs. On the contrary, part of the job of lawmakers, staffers and lobbyists is to discuss policy options and pending legislation with anyone who might be considered an interested party.

This is good news to the hedge funds who pay for people like Equale's insights in order to have an edge in their own investments, and also for the "political-intelligence industry," which has reportedly now grown to be a roughly $100-million a year business.

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