Tag Archives: Ethics


Naked Capitalism blogger files public records lawsuit against Calpers


Susan Webber, who operates the Naked Capitalism blog about financial and economics news writing under the pseudonym Yves Smith, has filed a lawsuit against the California Public Employees’ Retirement Systems for failing to respond to a public records request.

Webber argues that Calpers gave the information she is requesting about its investments and financial performance to three Oxford academics a year ago.

She writes, “I contacted a California attorney, Timothy Y. Fong, who sent a letter on January 30, 2014 to CalPERS Deputy General Counsel Gina Ratto which stated that if the information was not forthcoming, I was prepared to petition for a writ of mandamus and seek an award of attorney fees and costs (which is provided for under PRA).

“Galli promptly sent Fong a letter dated January 27, 2014, which had been sent certified mail. The key section:

The information provided to the authors of the article you referenced was not provided by CalPERS staff. After an extensive search, staff has determined we do not have anything to produce in response to your request.

“This is patently false as well as brazen. Notice what CalPERS is doing: they are trying to throw the researchers under the bus by stating that CalPERS staff did not provide the information. That raises the specter that the academics got it via some other route, say a former employee who had kept all this data or (horrors!) a hacker. The insinuation that CalPERS has not provided the data raises questions as to whether the data the academics used was accurate and complete.

“I e-mailed the authors of the paper and the lead author, Tim Jenkinson, wrote back. He said that he had indeed obtained the non-public information directly from CalPERS in 2009. In a second e-mail, he reconfirmed that not only he, but one of his fellow authors, and one of the other authors, Ruediger Stucke, had dealt directly with CalPERS staff.

“But aside from the flat-out dishonesty (the search was either not extensive or CalPERS misrepresented its results), consider the weasel-wording in the letter: ‘the information….was not provided by CalPERS staff.’ But that was not what I had asked for. I had requested information provided by CalPERS. It is possible that the data was conveyed directly from a third-party data repository such as LP Capital to Jenkinson et al. But that is irrelevant as far as my request is concerned. It is well-settled California law that actions taken by agents within the scope of their agency are imputed to the principal. Thus, even if as a matter of form, the data was provided directly by LP Capital or another CalPERS data repository to Jenkinson and Stucke, it would still be disclosable under the PRA.”

Read more here. The link also contains a copy of the Naked Capitalism lawsuit.

Reuters climate coverage

Reuters climate coverage continues to decline


Reuters’ coverage of climate change issues has continued to decline, according to a report from Denise Robbins of Media Matters for America.

Robbins writes, “Former Reporter: “Skeptic” Editor Ingrassia Created A ‘Climate Of Fear’ In The Newsroom. In July 2013, former Reuters Asia climate change correspondent David Fogarty revealed that when Paul Ingrassia —  a self-identified ‘climate change sceptic’ — took over as deputy editor-in-chief, a”climate of fear” surrounding climate change coverage followed….

Since Ingrassia’s Promotion To Managing Editor, Reuters’ Climate Coverage Has Decreased Further. Media Matters analysis released on July 23, 2013, supported Fogarty’s suspicions, finding that Reuters reported on climate change almost twice as much before Ingrassia became deputy editor-in-chief. Since Ingrassia became managing editor in February 2013, Reuters’ climate coverage has only worsened according to an analysis of the six-month period following our initial study. From July 24, 2013, to January 24, 2014, Reuters published 221 articles and 103 mentions about climate change, for a total of 324 stories. This is an 8 percent drop from 353 stories during an equivalent time period under the ‘skeptic’ editor’s regime (which saw 353 total stories), and a more than 50 percent decrease from an equivalent time period before Ingrassia took over (675 total stories).

“Just under half of Reuters’ coverage (44 percent) was focused on policy — a decrease from our previous study (63 percent) — and coverage focused on science increased slightly from 12 percent to 14 percent. The articles quoted primarily politicians and government officials (45 percent of the time) — similar to the previous study (41 percent) — but their usage of scientists increased slightly to 19 percent of the time from 12 percent. [Media Matters7/23/13] [University of Wisconsin-Madison, 2/4/13]”

Read more here.

Jane Wooldridge

Realtor selling biz editor’s home advertises on biz section front


Jim Romenesko reports that Miami Herald business editor Jane Wooldridge‘s home is being sold by a Realtor who advertises on the front page of the paper’s business section.

The ad in Monday’s paper includes a photo of Wooldridge’s home.

Romenesko asked the paper for a response and received the following from managing editor Rick Hirsch:

Jane Wooldridge is our business editor. She and her husband, a Miami architect, are selling their home. Like most people who sell their homes, she hired a real estate agent.

Her real estate agent has an annual contract with the Miami Herald that includes a weekly ad on our Monday business magazine. This week, the agent included Jane’s home in that ad. The ad does not indicate who the home belongs to.

Jane played no role in placing the advertisement. She does not oversee our real estate reporter, who reports to a senior editor.

We see no conflict in a Herald employee patronizing an advertiser.

Read more here.


Frankie Flack: Screw biz journalists, I love embargoes


If there’s one things business reporters seem to hate about my kind, it’s the embargo: an agreement to receive information, but sit on it until a specific time. TechCrunch has waged a gleeful war on the practice, and even the august Wall Street Journal  doesn’t like to play the embargo game. So if both ends of the business-press spectrum hate the embargo, there must be an open-and-shut case against us sneaky flacks, right?


Flacks love embargoes for two reasons, and both of those reasons serve the public good just as much as our clients.

The first reason we love embargoes is that it gives journalists the time to get things right. The reality is that, given the constraints, most reporters do one hell of a job reporting in real time. Let’s say the accuracy rate is 99 percent. Or even 99.9 percent. Here’s the thing: my bosses don’t want to take the 1 in 1000 chance that their news will get screwed up. They’d rather send things out under embargo and eliminate that tiny silver of potential error.

We’re not the only ones. I’ve written before about how the government uses embargoes, and that’s something to behold. Reporters and editors are ushered into a windowless room. The door is locked. All communications are cut. They get the figures for economic growth of jobless claims or whatever and have 30 minutes to review them, under embargo. Then, at the appointed house, the  phone lines are open, stories are filed and — voila! — the world has its economic numbers.

Do you remember the GDP ever being inaccurately reported? Me neither. Compare that to, say, the mess made of the coverage of the Obamacare Supreme Court decision. Sure, that was an exception, but — again — my clients don’t want to be an exception.

The other reason we love embargoes is that it forces the press to consider news independently, without seeing which way their peers are going. If I let a dozen journalists know that I’m launching a new product on Monday at noon, they can’t look around see if other media are writing about it. They have to assess the newsworthiness in a vacuum. That’s a good thing for me. Otherwise, everyone will take their cues for Reuters or AP (or, God forbid, PopSugar) and you’ll get the wonder of pack journalism.

Having to assess each and every piece of news that comes across the transom  makes the job of journalists that much harder. And I sympathize: the volume of email and the torrent of pitches is just ridiculous. Of course, embargoes are a (partial) solution to that problem, too. A story that you can chew on and gather context about without a looming deadline or a competitor’s piece to match can be a nice luxury.

The official reason that TechCrunch and others reject embargoes is that they’re essentially gentleman’s agreements, and the benefits of breaking an embargo and publishing information whenever an outlet damn well pleases can sometimes outweigh the risks of any punishment (screwing over all of the embargo-biding outlets in the process). But broken embargoes argue against embargoes. It argues against dumb embargoes. There’s no way in hell I’m going to tell a corporate secret to a reporter that I can’t trust, and anyone who doesn’t exercise that kind of diligence gets what they deserve.

But that doesn’t mean that the concept is flawed. When it’s well-executed between a flack and a reporter who have history, an embargo is a classic win-win. In fact, I have a great story in the hopper right now. And I can’t wait to give it some of my buddies. Under embargo, of course.


Business Wire to stop serving high-frequency traders


Business Wire, a company that publishes and distributes corporate earnings and other news releases, will stop providing its service directly to high-frequency trading firms, reports Steve Rothwell of the Associated Press.

Rothwell writes, “The decision comes after an article in the Wall Street Journal earlier this month highlighted the advantage that high-frequency trading firms had gained by getting the information directly from Business Wire, rather than accessing it through financial news wires such as ThomsonReuters, Dow Jones and Bloomberg.

“High-frequency traders typically use computer programs to scan corporate earnings and then place buy or sell orders within fractions of a second. By bypassing the newswires and getting the corporate releases directly, the traders were gaining a crucial advantage.

“Even though the direct distribution of its electronic feeds to a ‘handful’ of trading firms was not illegal, the company said it was concerned about its reputation. Business Wire made the decision after consulting with Warren Buffett, the chairman of Berkshire Hathaway, which owns the company.”

Read more here.

Seeking Alpha

Einhorn wants Seeking Alpha to disclose name of writer


Mark Melin of ValueWalk reports about how money manager David Einhorn of Greenlight Capital is threatening legal action against Seeking Alpha because one of its writers posted private information about one of Einhorn’s investments.

Melin writes, “In the court documents published by ValueWalk, Einhorn claims that publishing the hedge fund’s holdings of Micron securities during the fourth quarter of 2013 cost the fund because it ultimately drove up the price of shares.  On Nov. 14, seeking to keep its holdings confidential, Greenlight had requested confidential treatment from the Securities and Exchange Commission.  When the information was published by Seeking Alpha, Greenlight alleges in its suit that it could have only come from a person who had confidential access to the fund.  The disclosure on Seeking Alpha, filed by a person under the pen name ‘Valuable Insights,’ had a stake in Micron and financially benefited from the rise in the stock’s value.  Micron’s stock price moved higher after the post, from $18.92 on Nov. 13 to $19.46 on Nov. 15.  Einhorn ultimately disclosed his position in Micron on Nov. 21 at an investment conference in New York.

“For its part, Seeking Alpha has declined to identify the poster, but the profile on the web site says Valuable Insights is a ‘fund manager with more than 20 years of experience in the securities industry.’

“Media watchers say the case could be interesting as it approaches freedom of the press territory.  The key question going forward is: will Seeking Alpha protect its source, in this case a member of the web site who disclosed confidential information, or will Einhorn prevail?”

Read more here.

Pension Peril

Public TV station to return grant that funded pension coverage


WNET, the New York City public television broadcaster, said Friday that it will return a $3.5 million grant it received to sponsor an ambitious project on public pensions amid charges that it solicited inappropriate underwriting for the series, reports Elizabeth Jenson of the New York Times.

Jensen writes, “In the absence of the funding from the Laura and John Arnold Foundation, the project, called ‘Pension Peril,’ will go on hiatus, although WNET will continue to report on the topic. The series, which began in September and was announced in mid-December, was examining the economic sustainability of public pensions.

“Earlier, following a critical report on Wednesday by David Sirota on the website PandoDaily, WNET officials said they were comfortable with the foundation’s funding. Mr. Sirota sharply criticized WNET for accepting the Arnold Foundation money because John Arnold, a former hedge fund manager, has financially backed efforts to convince municipalities to cut public employee pension benefits.

“On its website, the foundation says that for three years it ‘has encouraged governments to face the true magnitude of their pension problems and to develop structural reforms that are comprehensive, sustainable, and fair.’

“In a joint statement from PBS and WNET, PBS said it stands by WNET’s reporting in the series but ‘in order to eliminate any perception on the part of the public, our viewers, and donors that the foundation’s interests influenced the editorial integrity of the reporting for this program,’ WNET will return the gift.”

Read more here.

Seeking Alpha tech

Seeking Alpha removes stories with fake bylines


Two articles touting Galena Biopharma were removed from the Seeking Alpha website Monday because they were written by the same person using different aliases, reports Adam Feuerstein of TheStreet.com

Feuerstein writes, “This is the second time Seeking Alpha has been forced to take action against individuals using multiple aliases to tout Galena, a small drug developer with a breast cancer vaccine in a phase III study. In January 2013, the investor Web site removed five articles promoting Galena written by the same individual under three different pseudonyms.

“The most recent incident is more serious and potentially damaging because of evidence linking Galena to a stock-promotions firm which wrote and published the articles on Seeking Alpha. The articles were part of a broader, coordinated ‘brand awareness campaign’ designed to boost Galena’s stock price, according to a document obtained by TheStreet.

“Aided by this promotional campaign, Galena shares tripled in value from this summer. Coincidence or not, Galena insiders have made millions of dollars by selling company stock in January.

“Galena did not respond to phone calls and emails seeking comment.”

Read more here.

Michael Bloomberg

Bloomberg’s Africa plan raises questions


Anton Harber, a journalism professor at Wits University in South Africa, raises questions about Michael Bloomberg’s plan to spend $10 million to improve business journalism in Africa.

Harber, writing in Business Day, states, “I went to hear Bloomberg make the announcement this week in the hope of understanding why he or his people in Bloomberg Philanthropy chose these particular projects. What are the issues and challenges in African journalism that he wanted to address? Why did he choose to focus on three of the countries (South Africa, Nigeria and Kenya) that have the strongest media and best financial journalism? Why were they piggy-backing on some existing initiatives, but reproducing others? Why did they think that six very different universities in three different education systems could — or should — agree on a curriculum?

“I was left bewildered. The initiative, Bloomberg said vaguely, would ‘foster collaboration, support professional growth and nurture the leaders who are contributing to the continent’s very bright future.’

“I hope I don’t sound ungrateful. I think investment in journalism is needed. I have enormous respect for Bloomberg, and the managers of his philanthropic fund that I had the pleasure to meet. I will be grateful for scholarships for students who might otherwise not be able to go to university. This programme shows big thinking of the sort that has made Bloomberg who he is, his operation one of the most successful journalism enterprises in recent history and having driven down crime in New York City.

“But good journalism, as Bloomberg knows, is often about asking the right questions. And sometimes even stupid questions. It is not about the temptation to nod in agreement with the holders of large chequebooks. A journalist’s job is to examine the gift horse’s tonsils, right?

“I do think that a programme of this sort needs to start with an understanding of what the issues are and what Bloomberg hopes to achieve.”

Read more here.


Ignore biz journalists when it comes to investing advice


Suzanne McGee of The Guardian writes about the dangers of taking financial advice from business journalists.

McGee writes, “Financial reporters have access to smart people who do a great job explaining complicated topics. A lot of other people, less intelligent or more unscrupulous, want to use us to get access to you, our readers. Our job is not to offer personalized financial or investment advice; nor is it to serve as a conduit for pundits.

“Rather, it’s to identify which folks are credible, and whom has more to offer our readers than a soundbite or a stock pick. If it sounds like we’re dishing up what some onlookers have dubbed ‘investment pornography’, it’s time to turn the page, click to the next story, or go watch Jon Stewart and Stephen Colbert. That’s more enriching than any stock hype.

“It’s tempting to believe that someone out there has inside knowledge and that if we could find that person, and share in that knowledge, then the American dream would be ours. It’s also tempting, in the midst of a world so awash in products, options and strategies, each enthusiastically promoted, that someone out there is wise enough to hand you a shortlist of the half-dozen best ideas.

“I doubt anyone can do such a thing, and if anyone can, it’s probably not going to be a financial journalist.”

Read more here.