Post by jcline on Feb 28, 2006 10:40:51 GMT -4
STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
SEC Subpoena; Meet Jim Cramer – February 28, 2006
David Patch
The world never ceases to amaze me.
Since last Friday the US financial press has had their panties up in a wad over the Securities and Exchange Commission subpoenas issued against Dow Jones journalists Carol Remond and Herb Greenberg.
The subpoenas centered on a reported SEC investigation into the business practices of Gradient Analytics and some of this nation major Hedge Funds.
Gradient Analytics is now listed as a defendant in two separate lawsuits alleging that the firm conspired with Hedge Funds and financial journalists to manipulate the price of publicly traded companies. The lawsuits, filed by Overstock.com and Biovail Pharmaceuticals, allege that Gradient allowed the Hedge Funds to ghost write the analysts reports and held back the publication of such reports until after the funds loaded up their portfolio in short positions.
The complaint alleges that the ghost reports were later published as frequently repeated “hatchet jobs” against the companies used false or misleading information to drive down the value of the stock prices. The hedge funds would then financially benefit from the stock collapse.
Late last year rumor turned to confirmation that the Securities and Exchange Commission was officially conducting an investigation into Gradient Analytics and all parties associated with the alleged collusion to manipulate securities.
It was last Friday that Marketwatch.com columnist Herb Greenberg reported that he had been served with a subpoena by the SEC seeking all e-mails, phone records, and written notes pertaining to communications involving 4 publicly traded companies. Carol Remond, who writes for the Dow Newswire remained silent through the ordeal.
Since the news hit the wire reports from every major financial news outlet discussed the legalities of the SEC subpoenas and whether the Constitutional rights of the journalists have been violated. Each article, while siding with the journalists, contained a tiny sound bite the writers all discarded as immaterial. Even as SEC Chairman Cox addressed the issue on this day, and temporarily rescinded the subpoenas, the sound bite remained.
SEC spokesman John Nester said that under long-standing practice, the agency "generally subpoenas journalists only when absolutely necessary and after careful thought and consideration."
Chairman Cox re-iterated this standing practice today as he addressed the delay in the enforcement of these subpoenas stated that "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.” Chairman Cox did not state it has never happened and that it has never been warranted. In fact, financial journalists have been known to front run articles in the past where they personally trade on the future pending articles they are about to publish.
As the SEC backed off their position for now, we have leaned that a third party CNBC Mad Money Host and co-founder of TheStreet.com James Cramer and TheStreet.com had also received a subpoena for similar information. While not yet confirmed, we will assume that at this time this subpoena will also remain in limbo until further notice.
On Monday’s CNBC Mad Money James Cramer wanted to address this subject matter and had on as a guest his personal friend and former co-Worker Herb Greenberg. While both claimed their innocence on public TV and acted the victim of a conspiracy orchestrated by Overstock.com CEO Patrick Byrne, Cramer also did something that unsettled many Americans.
On public TV James Cramer took what he presented as a Federal subpoena and discarded it on the floor. He held it up and essentially said, you know what you can do with this, as he threw it off the table. Cramer mocked the SEC as he essentially challenged them to touch his ego maniacal being. It was a public display of a childish and self absorbed person.
Soon Chairman Cox and the rest of the Commission will discuss where and how to proceed with these subpoenas as issued. Ironically, on the CNBC’s Larry Kudlow show just prior to Cramer’s Mad Money spectacle, CNBC business reporter Charles Gasparino not only identified that a third subpoena was rumored to have been served but that the three were in fact approved by SEC Director of Enforcement Linda Thomsen.
The second in command of the Securities and Exchange Commission authorized these subpoenas and James Cramer discarded it like junk mail on national TV. He called it a witch hunt orchestrated by Patrick Byrne and insinuated the Sec was Byrne’s puppet. Cramer taunting anybody to question is integrity, his persona, and his stature in life.
While the financial press, as presented ad nausea on CNBC, attempt to vilify the SEC and Patrick Byrne over this issue they have forgotten the basic responsibilities they hold as journalists. That is, nobody is above the law and nobody can hide behind the Constitution to protect themselves from accountability if they in fact are breaking the laws.
For this story, it is just starting to get legs. We hope to soon understand whether the SEC uncovered enough evidence in their investigation into Gradient Analytics to warrant such subpoenas or whether it truly was a fishing expedition. We certainly hope the Director of Enforcement for the top regulator in our Nation knows and understands what she is doing. We have to assume something has been uncovered within the accounts of Gradient to warrant such action.
Regardless of that issue, what Mr. Cramer did on national TV was bush league. As Jim Cramer pleads on his pulpit the rights he has as an American citizen he also mocks the Federal Government that affords him that right. Cramer has used the SEC to his advantage for many years and only now does he take a stance against them. Only now that he is on the other side of their sight glass.
In my opinion Cramer embarrassed himself and his profession by this public display. He has always had a reputation of arrogance and ego, this time he displayed it to all viewers and did so in a manner that taunts the power of our protective government. It wasn’t that long ago media personalities were terminated for inappropriate behavior. The class of management at General Electric, parent to CNBC, will soon be put to their own test of ethics.
This is not the first time Cramer and the SEC clashed. They gave him a hall pass the last time when issues of trading stocks he reported on surfaced. For his sake I can only say – I hope you have no skeletons in that closet of yours as you just ridiculed the agency in charge of your meat wagon.
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006
An online newspaper reporting the issues of Securities Fraud
SEC Subpoena; Meet Jim Cramer – February 28, 2006
David Patch
The world never ceases to amaze me.
Since last Friday the US financial press has had their panties up in a wad over the Securities and Exchange Commission subpoenas issued against Dow Jones journalists Carol Remond and Herb Greenberg.
The subpoenas centered on a reported SEC investigation into the business practices of Gradient Analytics and some of this nation major Hedge Funds.
Gradient Analytics is now listed as a defendant in two separate lawsuits alleging that the firm conspired with Hedge Funds and financial journalists to manipulate the price of publicly traded companies. The lawsuits, filed by Overstock.com and Biovail Pharmaceuticals, allege that Gradient allowed the Hedge Funds to ghost write the analysts reports and held back the publication of such reports until after the funds loaded up their portfolio in short positions.
The complaint alleges that the ghost reports were later published as frequently repeated “hatchet jobs” against the companies used false or misleading information to drive down the value of the stock prices. The hedge funds would then financially benefit from the stock collapse.
Late last year rumor turned to confirmation that the Securities and Exchange Commission was officially conducting an investigation into Gradient Analytics and all parties associated with the alleged collusion to manipulate securities.
It was last Friday that Marketwatch.com columnist Herb Greenberg reported that he had been served with a subpoena by the SEC seeking all e-mails, phone records, and written notes pertaining to communications involving 4 publicly traded companies. Carol Remond, who writes for the Dow Newswire remained silent through the ordeal.
Since the news hit the wire reports from every major financial news outlet discussed the legalities of the SEC subpoenas and whether the Constitutional rights of the journalists have been violated. Each article, while siding with the journalists, contained a tiny sound bite the writers all discarded as immaterial. Even as SEC Chairman Cox addressed the issue on this day, and temporarily rescinded the subpoenas, the sound bite remained.
SEC spokesman John Nester said that under long-standing practice, the agency "generally subpoenas journalists only when absolutely necessary and after careful thought and consideration."
Chairman Cox re-iterated this standing practice today as he addressed the delay in the enforcement of these subpoenas stated that "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.” Chairman Cox did not state it has never happened and that it has never been warranted. In fact, financial journalists have been known to front run articles in the past where they personally trade on the future pending articles they are about to publish.
As the SEC backed off their position for now, we have leaned that a third party CNBC Mad Money Host and co-founder of TheStreet.com James Cramer and TheStreet.com had also received a subpoena for similar information. While not yet confirmed, we will assume that at this time this subpoena will also remain in limbo until further notice.
On Monday’s CNBC Mad Money James Cramer wanted to address this subject matter and had on as a guest his personal friend and former co-Worker Herb Greenberg. While both claimed their innocence on public TV and acted the victim of a conspiracy orchestrated by Overstock.com CEO Patrick Byrne, Cramer also did something that unsettled many Americans.
On public TV James Cramer took what he presented as a Federal subpoena and discarded it on the floor. He held it up and essentially said, you know what you can do with this, as he threw it off the table. Cramer mocked the SEC as he essentially challenged them to touch his ego maniacal being. It was a public display of a childish and self absorbed person.
Soon Chairman Cox and the rest of the Commission will discuss where and how to proceed with these subpoenas as issued. Ironically, on the CNBC’s Larry Kudlow show just prior to Cramer’s Mad Money spectacle, CNBC business reporter Charles Gasparino not only identified that a third subpoena was rumored to have been served but that the three were in fact approved by SEC Director of Enforcement Linda Thomsen.
The second in command of the Securities and Exchange Commission authorized these subpoenas and James Cramer discarded it like junk mail on national TV. He called it a witch hunt orchestrated by Patrick Byrne and insinuated the Sec was Byrne’s puppet. Cramer taunting anybody to question is integrity, his persona, and his stature in life.
While the financial press, as presented ad nausea on CNBC, attempt to vilify the SEC and Patrick Byrne over this issue they have forgotten the basic responsibilities they hold as journalists. That is, nobody is above the law and nobody can hide behind the Constitution to protect themselves from accountability if they in fact are breaking the laws.
For this story, it is just starting to get legs. We hope to soon understand whether the SEC uncovered enough evidence in their investigation into Gradient Analytics to warrant such subpoenas or whether it truly was a fishing expedition. We certainly hope the Director of Enforcement for the top regulator in our Nation knows and understands what she is doing. We have to assume something has been uncovered within the accounts of Gradient to warrant such action.
Regardless of that issue, what Mr. Cramer did on national TV was bush league. As Jim Cramer pleads on his pulpit the rights he has as an American citizen he also mocks the Federal Government that affords him that right. Cramer has used the SEC to his advantage for many years and only now does he take a stance against them. Only now that he is on the other side of their sight glass.
In my opinion Cramer embarrassed himself and his profession by this public display. He has always had a reputation of arrogance and ego, this time he displayed it to all viewers and did so in a manner that taunts the power of our protective government. It wasn’t that long ago media personalities were terminated for inappropriate behavior. The class of management at General Electric, parent to CNBC, will soon be put to their own test of ethics.
This is not the first time Cramer and the SEC clashed. They gave him a hall pass the last time when issues of trading stocks he reported on surfaced. For his sake I can only say – I hope you have no skeletons in that closet of yours as you just ridiculed the agency in charge of your meat wagon.
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006