When "unbiased" reporters are financially motivated participants in the Market, its not a good thing, its the kind of thing that hurts investors confidence in an open free market, and is a corruption magnet. I don't think this is lost on Spitzer and the SEC as they work on reforms. There is no reason why large news organization need to have a conflicted reporter being the one doing a story, they need to hand it off to someone else.
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For Business Journalists, Credibility Is Never More Than a Trade Away
ojr.org
When can reporters buy stocks in companies they cover? News organizations continue to struggle to establish fair and appropriate conflict-of-interest guidelines.
Mark Glaser
Posted: 2003-08-26
CNBC glamour anchor Maria Bartiromo recently took flack for an on-air disclosure that she owned stock in Citigroup -- just before interviewing Sanford Weill, the company's CEO.
Then, before you could say "online angle," CBS MarketWatch star columnist Thom Calandra touted stock in Ivanhoe Energy Inc. on "CBS MarketWatch Weekend" while making an on-air disclosure of stock ownership. Then the show's anchor, Susan McGinnis, disclosed that she owned shares in Ivanhoe as well. The Monday after the report aired, Ivanhoe's stock shot up 26.7 percent to a new 52-week high.
MarketWatch.com CEO Larry Kramer said that Calandra talked to his editor beforehand and was given the green light to talk about Ivanhoe with the disclosure. Kramer doesn't think Bartiromo or Calandra did anything wrong, but acknowledged that the appearance of conflict can be tricky. He noted that Dow Jones published a story on how Calandra's TV appearance moved the stock.
Different media organizations have different ethics policies governing stock ownership and many are still struggling to find one that works.
CBS MarketWatch's policy for stock ownership stipulates that full-time journalists -- including editors -- "who write about or have knowledge of upcoming stories about a security cannot trade that security until 48 hours after the story is published. In addition, full-time newsroom staff members cannot trade securities of companies that they regularly cover."
However, if a journalist already owns stock in a company he or she is assigned to cover, they must tell the editor about the conflict and either make a disclosure or recuse themselves.
We're working on a possible addition to our editorial policy," Kramer said. "We might extend it so the executives here wouldn't trade in stocks that Calandra mentions. We don't look at every piece of editorial in advance, but the fact is, we have access to that. Because we're on the Web, we have to be careful. Online, there's a lot of commentary and hype masquerading as news. We have a brand, and people trust us, and we're vulnerable if we do something wrong."
Kramer said he will personally not trade stocks that Calandra mentions -- although he might already own stocks mentioned. However, he said he is still checking with other executives to see if this policy is workable.
Competing financial site TheStreet.com has long had a strict policy restricting all editorial staff from holding individual stocks -- except for TheStreetcom's. However, its leading commentator, Jim Cramer, has been in and out of trouble over the years for giving stock recommendations on TV while running a high-profile hedge fund. |
