It is hard to imagine two more reviled professions. One has been accused of torturing detainees and failing to track down Islamist terrorism suspects; the other is widely perceived to be responsible for the global recession.
Now, in a move likely to provoke a perfect storm of opprobrium, the two have joined forces: CIA officers who want to earn a little extra have been given the green light to moonlight at Wall Street firms.
According to a forthcoming book by US reporter Eamon Javers and confirmed by the CIA, financial firms have recruited agents on active service to help determine if colleagues are telling the truth. According to Javers, Business Intelligence Advisors (BIA), a Boston-based investment research company with links to US intelligence, employed workers with backgrounds in interrogation and interviewing to train hedge fund managers in “tactical behaviour assessment”. This helps to allow practitioners to tell if one is being dishonest by reading verbal and behavioural clues, like qualifying statements with words like “honestly” and “frankly”.
One case showed how CIA workers helped hedge fund clients make investment decisions by assessing the veracity of a company’s financial presentation.
In an episode described by Javers, BIA specialists listened in on a financial presentation by executives at UTStarcom. The specialists had problems with an answer about the company’s revenue recognition, finding in the response a “detour statement” intended to avoid commenting on the matter. The specialists said the statement indicated the executive was minimising the accounting problems. The company’s next quarter results shocked the market with revenues below expectations. The reason? Revenue recognition accounting problems.
BIA said it had not co-operated with Javers on the book, and described the depiction of its work in Broker, Trader, Lawyer, Spy as “inaccurate and misleading”.