Greenwood Research's View On Expert Networks

Much has been said of the use of industry and subject matter experts, via so called "expert networks," as a way to gain important research information. Unfortunately, much of the recent attention has focused on the potential for abuse of the expert/client relationship. In some rare cases, this fear has indeed been borne out in the industry, due to the plainly improper actions of a few. The result of these actions has been concern about the use of experts in general.

At Greenwood Research, we firmly believe that experts are not only a highly ethical and appropriate way to conduct research, but also an invaluable tool for such. Industry experts can be a constructive tool for building a mosaic of research information. We further believe that such interactions are appropriate and even necessary for the creation of a fair and efficient equity market. In no way does this imply the sharing of non-public, or otherwise inappropriate information. Our experts provide perspectives and judgment that can only come from years of working professionally within an industry.

Greenwood Research formally launched expert services in 2005. Throughout our history, we have continually placed the highest priority on creating an interaction between investing professionals and industry experts that is highly ethical, transparent, and appropriate.

While ultimate responsibility lies within the people who willfully violate securities laws and ethical standards, we take numerous steps to create a platform and an environment that help to prevent and avoid unethical or otherwise inappropriate behavior. For example, all clients and experts agree to a set of terms and conditions that plainly preclude, among other things, the disclosure of material non-public information or other confidential information and violation of any employer rules. We also monitor and screen all information requests for appropriateness.

While the current scrutiny on our industry is making some people cautious about the use of experts, we believe it will, in the long run, prove positive, as it will be clear that the wrong doings of a few do not characterize the industry as a whole.

Floyd S. Greenwood
President & Founder
Greenwood Research, LLC