Tag Archives: Marketwatch
At the SABEW conference in Minneapolis on Monday, SEC Chairman Christopher Cox spoke about regulation and about the agency’s new rules regarding subpoenas of business journalists as part of investigations.
MarketWatch columnist Herb Greenberg, who was one of the journalists subpoenaed by the agency, asked Cox the first question after his speech. According to the Sanity Check web site, the exchange went like this:
“HERB: Mr. Cox! [LAUGHTER]. My name is Herb Greenberg with MarketWatch. How are you? I do have to say that I am very happy, actually… when I wrote about the subpoenas, I knew you were coming back from surgery, I knew you would [be energized]. [LAUGHTER]. The question I have is, if you’re going to subpoena the communication we have with our sources, why should that not discourage sources in the future from communicating with us?
“COX: Well as you know from reading our policy, the architecture or the entire design is focused on making sure that the SEC, in its pursuit of the facts, gives as much space to journalists doing their jobs as we possibly can. That’s the whole idea. And so, we’re not going to go to journalists first, we’re not going to go to journalists second, we’re going to go to journalists dead last.
“We are, however, going to explore the facts. And to the extent that the people we are investigating happen to be sources, then they may be.. that may render them people, because everybody’s a potential source. What we want to do is respect the role that the journalist plays but also make sure that we pursue the facts where they lead us.
“And the distinction is a fairly bright one, I think…”
Read the rest of the post here. There are also a number of comments to the posting, as well as one referring to an earlier post here on Talking Biz News.
The Sanity Check web site, which is one of the vehicles used by the anti-naked short selling campaign, is posting Monday comments made at a panel at the SABEW conference in Minneapolis-St. Paul on Sunday.
Business editor Dan Colarusso from the New York Post is quoted as saying at a panel on the battle between aggressive, investigative business reporters and companies such as Overstock.com and Biovail, who are big backers of the anti-naked short selling campaign, as saying, “But they are interesting, people should know about them. The more they attack us, you know, we have barrels of ink and stacks of money, and all the resources in the world at our disposal, legal, and via our media, to crush them, or at least bring them to some degree where they cannot do this with impunity. And, at this point in time, the Post’s stance. I’m ready to sue one of them for libel or slander. Why not turn the tables? They say you can’t do it. Herb said he thought about it. But why not? They want to be journalists? You want to write for the public? Here you go, now you know what we live through. And.. fine, we’ll wage war with you as long as you want.
“So we’re very much prepared to do these things and be aggressive. But one thing we’re not prepared to do, and the one thing I have advised our reporters to do, is not to deal with these people on their own terms. We do not refer.. we do not post to boards anymore. In fact, I told Roddy Boyd that I would cut his hands off if another one of his emails showed up on the Web. It’s careless, and we don’t know what road we are going down litigation wise. Is an email from a journalist. can that be.. can you be sued for libel in an email? You know, I don’t know where it goes. And, so were being careful about that. We’re not going to engage these people on their own terms. We know the rules and we know where everything shapes up.”
SABEW has traditionally not provided transcripts of its conference or of individual sessions online. I did verify with someone at the conference that this is what Colarusso said. Still, the comments are drawing the attention of some of the enemies of business journalism who argue that the comments make biz journalists look bad.
Read the response of the anti-naked short sellers here. They have been upset with coverage from MarketWatch’s Herb Greenberg and the Post’s Roddy Boyd, among others.
Before joining The Post, Colarusso was a columnist and associate editor at TheStreet.com, the Internet financial news organization. His work has also appeared regularly in The New York Times, Barronâ€™s and other leading business publications. Colarusso, who graduated from LIUâ€™s Brooklyn Campus in 1988, teaches business writing at Long Island University.
MarketWatch media columnist Jon Friedman recently interviewed Wall Street Journal Europe editor Raju Narisetti on why he is leaving the newspaper to go head a start-up business newspaper in India, his home country.
Friedman writes, “Journalists in India, he points out with some measure of chagrin, give their customers a diet of spot-news stories but are somewhat reluctant to provide the in-depth and irreverent features that the Journal is known for.
“‘The more I thought about it,’ Narisetti told me by phone on Thursday, ‘the more it seemed to make a lot of sense to try and do, essentially, a start-up that’s going to be different, in the sense of being more analytical and interpretative and less about spot news — which is the tradition of Indian publications.’
“Narisetti added: ‘My biggest challenge is going to be creating a form of journalism that is different. There is not enough of stepping back and looking forward — lighthouse reporting, as opposed to lamppost reporting.’”
Read more here.
Agence France-Presse is apparently considering selling its AFX business news wire service, and Dow Jones and Xinhua News Agency might be bidding, according to an article on TheBusinessOnline.com.
Reporter Adam Durschlag writes, “Last week, Thomson Corporation, the Canada-based electronic publishing company, was understood to have approached Agence France-Presse (AFP), the worldâ€™s oldest news agency, about buying its financial news service AFX. Thomson already outsources some news output to AFX, such as Thomson Investment Management News.
“Talks between Thomson and AFP are thought to be at an early stage and could still be broken up, according to a banking source. Dow Jones and Thomson declined to comment.
“AFP sold its AFX Asia subsidiary in 2003 to Hong Kongâ€™s Xinhua Financial Network, a subsidiary of Chinaâ€™s state-controlled Xinhua News Agency. That same year AFX set up a joint venture with Xinhua Financial Network and also MarketWatch, which Dow Jones bought in 2005. They called the venture the World Business News Alliance, a global financial news service delivered through Thomson Financial terminals. It was set up to save money by sharing technology and resources.”
Read more here.
Dow Jones, the parent company of The Wall Street Journal and Barron’s, reported its first quarter earnings on Tuesday and while profits rose due to accounting issues, the company said it was still losing money from the weekend edition of the Journal.
The earnings release states, “Advertising revenue at the U.S. Wall Street Journal print edition, including Weekend Edition, increased 17.9% in the first quarter (up 19.1% in March), on a linage increase of 14.9% (up 17.2% in March). And Dow Jones Online advertising revenue increased 26% in the quarter (on a pro-forma basis, meaning including MarketWatch 2005 advertising revenue for the full year, advertising revenue increased 15%).
“The 5.1% gain in circulation and other revenue at Consumer Media was driven by increases at the print Journal and at the Online Journal and Barron’s Online. Consumer Media had an operating loss in the first quarter 2006 of $2.4 million mainly due to expected losses for Weekend Edition, but it was an improvement over a loss of $6.9 million in the first quarter 2005.”
Read more here.
In a separate press release on its advertising, Dow Jones said advertising revenue for the Journal was up 19.1 percent and up 14.9 percent for Barron’s. Financial advertising in the Journal in March was up 25 percent.
Wal-Mart Stores Inc. has planned a two-day meeting next week with journalists who write about the world’s largest retailer to help open the lines of communication with the increasingly criticized company.
MarketWatch reporter Jennifer Waters writes, “In only the second time that Wal-Mart (WMT) has opened its doors to reporters, the company is launching the two-day event on Tuesday, with an agenda packed with discussions about the importance of customers and their shopping experience.
“Spokeswoman Sarah Clark said that the company will ‘champion the customer’ during its time with media, as it tries to replace negative publicity about such heady issues as health insurance, the hiring more part-time employees and the possible motives behind efforts to win regulatory approval to operate banks.
“The push is part of a longer-term strategy to be friendlier and more open with the press, which has grown increasingly interested in the goings-on at the world’s largest retailer and employer.”
Read her story here.
The Arkansas Democrat Gazette reported Friday that CEO Lee Scott is delaying a one-month vacation so that he can be on hand for the meetings with the media.
The Securities and Exchange Commission decided on Wednesday that it will only subpoena journalists to gather information for its investigations in rare cases, according to published reports this morning.
The SEC earlier this year had subpoenaed three reporters in its investigation into allegations against a hedge fund and a research firm for giving information about companies such as Overstock.com that caused the stocks to fall.
In the New York Times Thursday, reporter Stephen Labaton writes, “Under the policy, commission investigators must initially try to obtain information from other sources and determine whether the information in a journalist’s possession is ‘essential to successful completion of the investigation.’ The policy also encourages investigators to talk informally with journalists and their lawyers to seek to avoid a showdown.
“If the agency decides that the information is essential and cannot be obtained elsewhere, the policy states, then investigators must seek permission from the director of the enforcement division to issue a subpoena. If the director, in consultation with the agency’s general counsel, approves the subpoena, then the chairman of the agency must be notified as well.
“The policy statement also calls on investigators to tailor the subpoenas narrowly and says they should generally be ‘limited to the verification of published information and to surrounding circumstances relating to the accuracy of published information.’”
The MarketWatch story by Robert Schroeder notes that SEC Chairman Christopher Cox “himself was surprised by the issuance of the subpoenas to MarketWatch columnist Herb Greenberg and Dow Jones Newswires columnist Carol Remond. The agency also subpoenaed CNBC commentator James Cramer. Cox said in a statement that neither he nor the agency’s chief attorney nor the office of public affairs knew about the action.
As a business journalist, I’m still not 100 percent happy with the new regulations. It means that there is still the potential that reporters can be subpoenaed when they use Wall Streeters as sources.
The full guidelines can be found here.
Federal authorities have filed charges against a Merrill Lynch analyst and two Lehman Brothers employees who developed an elaborate insider trading scam that involved using en employee at the printing plant where BusinessWeek is printed every week to get inside information, MarketWatch is reporting.
Marketwatch reports, “Authorities also charged Juan Renteria, 20, an employee of Quad Graphics printing plant in Hartford, Wis., and said he was hired by the team to get a job at the plant in order to obtain advance copies of BusinessWeek’s “Inside Wall Street” column. Plotkin and Pajcin allegedly persuaded Shpigelman to provide tips on coming mergers in return for a share of the trading profits.”
The “Inside Wall Street” column is written by Gene Marcial, and it has been the subject of other insider trading scams.
In 2003, workers at the same Wisconsin printing plant were involved in another insider trading scam involving BusinessWeek and the “Inside Wall Street” column, according to this Milwaukee Journal-Sentinel article.
In 1989, Seymour Ruderman, an editor at BusinessWeek, was sentenced to six months in prison for trading on information in the magazine before it was published. He had earned $39,000 in profits with the information. The SEC also brought charges against the editor. The information came from the â€œInside Wall Streetâ€? column written by Marcial, whose reporting of tips in the piece has been criticized in the past because they often come from Wall Street analysts and investors who could potentially profit from what he writes.
In 1989, a former salesman for the printer of Business Week admitted in court to inside trading based on the magazine’s stock column and agreed to pay more than $31,000 to investors who may have lost money as a result.
In 1990, two California men settled charges with the Securities and Exchange Commission that they traded on inside information obtained from advance copies of BusinessWeek magazine, again seeking information from the “Inside Wall Street” column.
Read the MarketWatch story here.
Bruce Bigelow, a business writer for the San Diego Union-Tribune, has a nice profile of MarketWatch columnist Herb Greenberg in this morning’s newspaper.
Greenberg is the financial journalist who has been criticized by executives at companies such as Overstock.com recently for using short sellers as sources. Greenberg denies that he has done anything wrong, and using short sellers as sources has been an accepted practice in business journalism for decades. He has, however, been subpoenaed by the SEC, but the regulatory agency has backed off enforcing the subpoena.
Bigelow writes, “Greenberg says he tries to characterize the perspective of his sources, for example, by reporting whether they are betting against a company’s stock. In any case, he says such information serves only as the starting point in the reporting process.
“For Greenberg, covering Wall Street means rising at 4 a.m. to read newspapers and online news sites. A few souvenirs of his 32-year career in journalism decorate his office walls. They include a complimentary note from Gregory Peck framed with a photo of the actor, a sketch of Batman signed by the artist Bob Kane and a promotional flier for a TV business program sponsored by Fox News and TheStreet.com.”
Read the rest of the profile here.
Bill Fleckenstein, who runs a hedge fund in Seattle and writes a column for MSN Money, believes that some hedge fund managers are no longer willing to talk on the record to business journalists because of the recent push by some companies to threaten hedge funds with litigation when they are discussed in a negative light.
Fleckenstein writes, “That’s the chilling part of what Biovail is apparently attempting. As a measure of its “success,” columnists Gretchen Morgenson of The New York Times and Herb Greenberg of MarketWatch.com, two friends who do great investigative work, tell me that they both have sources who are no longer willing to go on the record when discussing corporate chicanery.
“What we don’t want to see is the routine silencing of naysayers by managements with something to hide. This is intimidation masquerading as victimization.”
Read the rest of his column here.