Tag Archives: BusinessWeek
CNBC commentator Charles Gasparino, who is a former Wall Street Journal reporter, wrote a commentary for Newsweek magazine on the recent actions of the SEC to subpoena business reporters as part of its investigation into an investment firm. Publicly, the SEC has backed off enforcing the subpoenas.
Gasparino, however, concludes that is not the case from talking to sources within the SEC about the public back-tracking from Chairman Christopher Cox on Monday.
Gasparino writes: “Cox didn’t rule out ever calling reporters in as witnesses, and putting them through the paces that other SEC subjects are put through, meaning they must not only answer questions, but also hand over documents, e-mails and possibly most damning for any journalistâ€”their sources. In fact, my own sources at the SEC tell me that [Marketwatch columnist Herb] Greenberg and the other journalists involved in the Overstock.com story may still be called in to testify about the case. Cox, they say, wants the testimony of journalists to be taken only rarely, and only as a last resort.”
“To be honest, I am not all that comforted by Cox’s go-slow approach. In public, Cox appeared to rebuke Thomsen’s decision to subpoena journalists, but my sources at the commission say he acted much differently privately. One said he called both Thomsen, and the SEC officials leading the Overstock investigation in the commission’s San Francisco bureau and gave them his ‘unflinching’ support. Cox, these people say, wasn’t so much concerned about sending subpoenas to journalists, rather, he didn’t like the public perception that the SEC was somehow trying to curtail the free flow of information about stocks, something it has vigorously defended in the past. In other words, under certain circumstances, Cox might not have a problem hauling a bunch of journalists down to SEC headquarters and having them answer questions and possibly hand over their sources.”
Later, he concludes: “SEC may be on firmer ground than we journalists may think. Remember last summer when The New York Times’ Judith Miller was thrown in jail for not revealing her sources in the Valerie Plame CIA leak case? Public opinion wasn’t on the side of Miller as she languished in jail before finally announcing that her source had given her permission to reveal his name before walking free. And I bet, if Linda Thomsen and the SEC chose to pursue journalists in the Overstock case, public opinion would come out the same way.”
Read Gasparino’s column here.
Former BusinessWeek writer Gary Weiss comments about Gasparino on his blog. He writes: “But with whom are the subpoeanaed journalists (Herb Greenberg, Carol Remond and Jim Cramer) ‘consorting’? ‘Malefactors’? Or stock analysts dedicated to rooting out overvalued and manipulated companies? What’s out of kilter here is that the SEC is investigating people who are indeed on the same side as the agency– that is, on the occasions when it deigns to pursue stock fraud.
“Meanwhile, the bad guys — the stock touters promoting the fictitious ‘stock counterfeiting conspiracy’ — are the ones cheering on the feds.
“This is not the first time that the anti-shorting crowd has screamed ‘stock manipulation’ and tried to push the feds into engaging in a wild goose chase. A good example came in the mid-1990s, and involved a company called Solv-Ex that also blamed shorts for its crummy stock performance. The company’s top officials pressed hard for SEC action.”
The New York Times’ Joe Nocera wrote a column this weekend about the efforts of Overstock.com CEO Patrick Byrne to discredit financial journalists who write negatively about his company or who question the “naked short-selling conspirary” that he has espoused for the past year. Nocera’s column is part of Times Select, so I haven’t posted about it until now since it is appearing in other newspapers and can be read for free.
Some background: Earlier this year, Byrne responded to interview questions from BusinessWeek’s Timothy Mullaney and the New York Post’s Roddy Boyd by posting his answers on an Internet site. Byrne took this tactic to circumvent what he thought were going to be negative storis written by journalists being fed a story line by short sellers. In fact, Byrne has sued the alleged short-selling firm.
Then comes this week, and one of the business journalists — the Marketwatch’s Herb Greenberg — is subpoenaed by the SEC, along with Dow Jones reporter Carol Remond, looking into Byrne’s allegations against the short sellers. According to Nocera’s column, Byrne has knowledge of the subpoenas and sends some strange — and menacing — e-mails to Greenberg. One of them read: “”As I take a sip, ‘I find myself curious: do you guys know? Are you sitting somewhere, blithely oblivious, still chuckling about Whacky Patty, and all that? Or do you understand now that this is going to end badly for you?”
Nocera’s analysis: “This is what Bryne does: along with O’Brien, he bullies and taunts and goads the small handful of reporters who dare to write about Overstock, making it clear that there will be a price to be paid for tackling the company or its chief executive. And as a result, financial reporters have become very chary of taking him on.”
I am sorry to say that I missed Byrne’s appearance earlier today on CNBC’s Kudlow & Co. But apparently he called Greenberg, one of the most respected business journalists in the field, a “crooked reporter.” That’s at least what former BusinessWeek reporter Gary Weiss, an acquaintance of Greenberg’s is stating on his blog.
Greenberg replied on Jim Cramer’s Mad Money show, saying that Byrne had libeled and slandered him. “I’m proud of what I do,” said Greenberg. “The SEC and I, we’re kind of doing the same thing. What I do for a living is help people avoid getting taken advantage of.” At the end of the segment, Cramer said to him: “Listen buddy, you’re not corrupt.”
I don’t expect this to be the last we’ve heard of this.
When Byrne posted his interviews on the Internet, I took it as a case of the changing relationship between business journalists and sources with the Web coming into play. But to go onto cable television and call a journalist “crooked” smacks of vindictiveness and a thin skin. I can see now why a lot of people think that Byrne is strange.
SEC Chairman Christopher Cox issued the following statement in response to media reports over the weekend that the agency had “ordered columnists at two Dow Jones publications to provide information about conversations that they had with stock traders and analysts”:
“The issuance of a subpoena to a journalist which seeks to compel production of his or her notes and records of conversations with sources is highly unusual. Until the appearance of media reports this weekend, neither the Chairman of the SEC, the General Counsel, the Office of Public Affairs, nor any Commissioner was apprised of or consulted in connection with a decision to take such an extraordinary step. The sensitive issues that such a subpoena raises are of sufficient importance that they should, and will be, considered and decided by the Commission before this matter proceeds further.”
In other words, the career SEC employees did something that made the politicians running the agency look bad, and now they’re getting their knuckles rapped by the school marm.
Former BusinessWeek reporter Gary Weiss said pretty much the same thing on his blog: “I have to admit, I am having a bit of trouble understanding how nobody in authority, not even the spokesman’s office, knew what was going on until the weekend when the SEC’s top spokesman was saying things like that on Friday.”
The New York Times reported today that in addition to Marketwatch columnist Herb Greenberg, the SEC also subpoenaed Dow Jones Newswire reporter Carol Remond as part of its investigation into the practices of short sellers. However, the subpoenas were then withdrawn.
Times reporter Stephen Labaton reported, “But after receiving questions from reporters preparing articles on Friday about the subpoena, the commission appeared to soften its stance. The agency then decided not to enforce the subpoena or seek any documents from the journalists, at least for the time being, government officials and a company spokeswoman said.
“The abrupt about-face was an unaccustomed victory for a news organization, as journalists have found themselves under increasing pressure in recent months from law enforcement authorities for information and testimony. In several notable instances over the last two years, including one involving The New York Times, the journalists have gone to jail rather than cooperate with law enforcement officials.
“In other instances, news organizations that were traditionally resistant to cooperating with subpoenas have complied to avoid severe financial penalties and possible jail sentences.”
Read the Times’ article here.
Former BusinessWeek reporter Gary Weiss said on his blog that the SEC’s actions were reminiscent of the Keystone Cops. He wrote, “Herb Greenberg of Marketwatch, one of the subpoena recipients, is correct in saying that the SEC’s action will have a chilling effect on financial journalism. He and Carol Remond of Dow Jones News Service, the other subpoenaed reporter, are two of the toughest financial reporters around. They and others have paid the price for good work by being regularly smeared by [Overstock.com CEO Patrick] Byrne and his lowlife sidekick, an Internet nutjob who goes by the phony name ‘Bob O’Brien.’”
Steve Shepard, who is the dean of the new graduate school of journalism at CUNY and the former editor of BusinessWeek, was profiled in the Feb. 17 issue of the Chronicle of Higher Education. The article had these two snippets related to business journalism:
1. “Students pick one of three tracks: health and medicine, business and economics, or urban affairs, and take a sequence of three classes in that specialty. (Mr. Shepard hopes to add arts and culture in year two, and international reporting further down the road.)”
2. “And Sarah Bartlett, a business journalist, will move over from CUNY’s Baruch College. When the graduate school opens, Baruch will end its own master’s program in business journalism. That master’s degree hasn’t generated much enthusiasm from students in recent years â€” hardly a good sign â€” but administrators say the problem was a lack of marketing.”
Barlett is a former assistant managing editor of BusinessWeek who worked for Shepard. She is also a former New York Times business reporter.
Read the entire article here.
Mark Clifford, who was Asia regional editor for BusinessWeek from 1995 to 2003 and a former business editor of the Far Eastern Economic Review, is the new editor of the South China Morning Post, effective April 1, according to this morning’s paper.
A short announcement in the paper stated, “At the same time, David Armstrong has decided to step down as director, editorial, of the Post from March 1, in order to focus his time on the Bangkok Post, where he has held the position of deputy chief executive officer since May 1 last year. Mr Armstrong was with the Post from 1993 to 1996, first as editor, then editor-in-chief, and more recently from March 2003, as group editor-in-chief, then director, editorial.
“Mr Kuok expressed deep appreciation, on behalf of the SCMP board of directors and management, to Mr Armstrong for his contributions to the Post. “We wish him the very best in his endeavours at the Bangkok Post,” he said.
“Mr Clifford joins the Post from The Standard, where he has been publisher and editor-in-chief since January 2004.”
As BusinessWeek’s Asian regional editor, Clifford oversaw the coverage of some 20 countries, heading a team of six correspondents and numerous special writers. The turf includes China and Greater China, Southeast Asia, the Indian subcontinent, and, since the events of 2001, Afghanistan, Pakistan, and assorted pieces of their troubled “-stan” neighboring countries.
The press release can be read here.
Joan Stewart, who writes the Publicity Hound’s blog, posted a comment today about how to fight bias in the media. She pays particular attention to responding in the same manner as Overstock.com President Patrick Byrne did earlier this month to BusinessWeek e-commerce editor Timothy Mullaney.
Stewart writes: “If youâ€™re lucky enough to have a tape-recording or a written transcript of an interview you did with the media, you can fight back by posting it on your website, like Overstock.com President Patrick Byrne did following an interview with BusinessWeek e-commerce editor Timothy Mullaneyâ€”before the story was published on BusinessWeekâ€™s magazine or on its website.”
She also suggests that companies and others take their stories to bloggers, bypassing the mainstream media.
Former BusinessWeek reporter Gary Weiss responded to Stewart on his blog, writing “With all due respect to Ms. Stewart, whose general concern about media bias I tend to share, I think this not a very good idea.
“Sure, if you’ve been misquoted, then I would say yes, posting a transcript is totally understandable. However, Byrne was not upset with a biased article. He was concerned with what he saw as a biased reporter, which is an entirely different ball of wax.
“The problem with this approach is that it is going to be construed as an attempt to intimidate the media. Not that Byrne would ever stoop to doing such a thing. Perish the thought! But it is going to be viewed that way anyway.”
I have known Jim Ellis, the chief of correspondents at BusinessWeek, for more than a decade. When I was at the magazine, he was in the Chicago bureau, but he soon came to New York and was considered the heir apparent to Keith Felcyn, who was the chief of correspondents in the early 1990s. Jim’s job for the past decade has been to oversee all of the magazine’s bureaus.
When I came to UNC, Jim was one of the first people I contacted to join the business journalism advisory board. He has been a frequent visitor to Chapel Hill for our meetings, talking to students and engaging in the conversation about what they should be learning — and what I should be teaching them.
In addition, Jim has always arranged for a group of UNC business journalism students to visit BusinessWeek’s offices in New York during spring break, graciously spending time with them explaining the process of how the magazine is put together. When he wasn’t available, he always made sure other editors were there to talk to the students.
Part of the reason that Jim came to Chapel Hill for the meetings was to spend time with one of his sons, who was a student here and later lived in the area. That showed me how close he was with his kids.
That’s why it hurts to read in the Washington Post today that another one of his sons, David, who was a student at the University of Maryland, died in an apartment fire earlier this week. I am saddened by the loss and by the pain that I know Jim is experiencing.
1. Losses from the Weekend Edition of The Wall Street Journal, launched Sept. 17, were about five cents per share in the fourth quarter.
2. Advertising linage at the U.S. Wall Street Journal, including Weekend Edition, increased 8.1% (up 17.0% in Dec.). Advertising yield (or revenue per line) declined slightly due to the heavier mix of lower yielding classified linage in the quarter. Advertising linage at the international editions of the Journal increased 20.6% (up 16.8% in Dec.). Barron’s advertising pages decreased 10.2% in the quarter (down 9.2% in Dec.).
3. The first quarter 2006 estimate includes losses of about six cents per share from Weekend Edition. The Company expects total linage at the U.S. Wall Street Journal including Weekend Edition will be up in the mid single digits percentage range compared to the first quarter 2005.
The advertising is interesting in comparison to what McGraw-Hill reported yesterday for BusinessWeek, as that rate was a decrease. Still, the advertising rate at the Journal was below what analysts were predicting, according to this AP story.
In McGraw-Hill’s earnings release out today, there was this item about advertising in BusinessWeek, its flagship publication: “Advertising pages at BusinessWeek declined 18.8% in the fourth quarter and 12.8% for the year, according to the Publishers Information Bureau. For revenue recognition, there were 50 issues in 2005 compared to 51 in 2004.”
That’s not a good trend. Former BW writer Gary Weiss has a theory as to why it’s happened: “My theory, which I admit is self-serving, is that there hasn’t been nearly enough hard-hitting reporting. Now, anyone who knew me at BW can tell you that I’ve been saying that for quite some time, even when there was a lot of hard-hitting reporting in the magazine.”
Weiss also adds in his blog: “Today, the number of people covering finance is exactly half what it was twenty years ago. The beats have been shifted around a bit. Now there is one person covering Wall Street, one covering banking and finance, one concentrating on investment banking and a senior writer with broader responsibilities. Overseeing them is one editor. Gene [Marcial] is the only survivor from twenty years ago. All good, smart and experienced people. But, still, that’s just half the number that were tasked with covering a less complex and far less journalistically competitive financial beat in 1986.
“When you have fewer people, it greatly affects the ability of the staff to carry out lengthy, investigative projects. And I’d argue that this deficiency shows up in the ad pages. As I said, it’s a vicious circle.”