Post by jcline on Nov 13, 2006 14:49:26 GMT -4
STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
Wall Street Strong Arm Tactics - November 13, 2006
David Patch
It has been much rumored over the decades that the power and clout of the Wall Street Institution was enough to send any company into the abyss if things were not done the Wall Street way. From disappointing analysts to not taking on corporate actions viewed as necessary, the public issuer was at the mercy of Wall Street if they were to survive.
Recently, rumors of a different matter have surfaced whereby hedge funds and research firms have been accused of working with the financial media to issue "hatchet reports" that can be used to cripple investor equity. The purpose of the published hatchet job would be to drive a sell off into a heavily shorted security thus allowing the hedge fund holding the short interest to rapidly turn profit and move on.
Much of this type of scenario has been dismissed by the individuals accused despite growing interest of Congress and the SEC into the allegations. Earlier this year the SEC went as far as to issue subpoenas against several members of the financial press seeking information on the relationship between the members of the press and certain hedge funds and research firms.
The subpoenas were later rescinded due to the political firestorm that erupted over freedom of the press rights.
On Monday, one of the recipients of one such subpoena published an article that suddenly exposes the very concerns that Wall Street and the financial press have dismissed so handedly. Jim Cramer, co-founder of TheStreet.com, issued a publication for TheStreet.com called 'Without Fear or Favor, but With Gratitude' that characterizes the conflicts between the financial press and Wall Street and the potential reign of terror that could ensue if Wall Street's appetite for a leg up was not fed.
The article published was a look back over the first 10 years of TheStreet.com and how the dot.com newswire has survived where others have failed. Cramer credits the uniqueness of the company and the lack of fear to buck the system for the company's ultimate success. To illustrate his point Cramer delves into the underbelly of the problem.
"I remember when we visited a major brokerage house two years into our launch. We needed money, for certain. We needed institutional backing to survive. This brokerage wanted our copy because we had tested among users as the most honest and actionable of any site on or off the Web. They wanted me to write a column about mutual funds that they could vet so it didn't upset anyone of the clients that were mutual funds.
It wasn't a big decision to say no; I just had to find a way to keep my temper rather than exploding and making everyone in the room embarrassed. It was one of the few times back in those days that I didn't respond with a vengeance. I just couldn't believe anyone would ask us to suspend what made us different and loved. "
Cramer's claims of TheStreet.com acting differently from his competition comes from his response to turn down this major brokerage house in the request to provide pre-publications for vetting prior to articles reaching the public. An similar allegation now resting in Federal Court as several business issuers have filed suit against several hedge funds and research firms for doing just that.
To most of us, this would be considered an illegal and unethical act if such an act were to be taken. Having a major brokerage firm ultimately ghost write a publication or provide editorial responsibilities to a publication begs for conflicts of interest violations yet, according to Cramer, it was somewhat standard practice between Wall Street and the financial press. At least that is the crux of his story here.
"So, why have we survived and thrived? What has made us so different that the digital versions of The Wall Street Journal, Forbes, Fortune and BusinessWeek didn't kill us?
I think it has to do with what got us started in the beginning: our independence. We have been pointed, we have been directional, we have been judgmental. We have never been afraid of telling the truth, of angering the big institutions that everyone said we couldn't afford to run afoul of. We are trusted to be smart and right and not beholden to those who demand neutrality."
Bottom line, Jim Cramer is claiming to be fearless in an environment where Wall Street rules by the stern hand of fear. Cramer claims to have deviated from the normal practices and relationships of Wall street and the media and survived to tell about it.
In the on-going investigations into possible conflicts between hedge funds, research firms, financial press, and the corporate issuer, those accused of illegal business practices are those once brought up through the ranks of the Wall Street system. Hedge Fund managers today were the Wall Street players of yesteryear. The business mentality, the power, the ability to strike down any dissention remains part of the mentoring process in reducing your opponent to dust.
The law of Wall Street is the law of fear.
The sorriest aspect of Mr. Cramer's article was that what he feels is the strengths of his company are really only a conviction of what the rest of the industry is about. Cramer is proud that TheStreet.com did not crack under intimidation yet Cramer ignores the fact that TheStreet.com failed to alarm the investing public that this intimidation and questionable business practices even existed.
Cramer certainly acted in fear. Just not the singular fear he speaks of. A man that watches a stoning take place, and elects not to throw the stone is just as guilty of such an act if he also fails to report those who were.
Our capital markets must run free of the corruptions that come from terrorizing the financial press into running vetted news or terrorizing public companies. The financial institutions should not be using the capital the public entrusts them with as the instrument of fear in gaining higher and higher power and authority.
For these capital markets to be trusted, the conflicts between the financial press and Wall Street must be clearly broken. Cramer's article, if truthful, proves the conflicts exist now lets take it serious enough to fix it. That responsibility o fix this problem lies squarely with the members of Congress and the SEC who have, to date, also succumbed to such levels of intimidation by the member firms.
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
Wall Street Strong Arm Tactics - November 13, 2006
David Patch
It has been much rumored over the decades that the power and clout of the Wall Street Institution was enough to send any company into the abyss if things were not done the Wall Street way. From disappointing analysts to not taking on corporate actions viewed as necessary, the public issuer was at the mercy of Wall Street if they were to survive.
Recently, rumors of a different matter have surfaced whereby hedge funds and research firms have been accused of working with the financial media to issue "hatchet reports" that can be used to cripple investor equity. The purpose of the published hatchet job would be to drive a sell off into a heavily shorted security thus allowing the hedge fund holding the short interest to rapidly turn profit and move on.
Much of this type of scenario has been dismissed by the individuals accused despite growing interest of Congress and the SEC into the allegations. Earlier this year the SEC went as far as to issue subpoenas against several members of the financial press seeking information on the relationship between the members of the press and certain hedge funds and research firms.
The subpoenas were later rescinded due to the political firestorm that erupted over freedom of the press rights.
On Monday, one of the recipients of one such subpoena published an article that suddenly exposes the very concerns that Wall Street and the financial press have dismissed so handedly. Jim Cramer, co-founder of TheStreet.com, issued a publication for TheStreet.com called 'Without Fear or Favor, but With Gratitude' that characterizes the conflicts between the financial press and Wall Street and the potential reign of terror that could ensue if Wall Street's appetite for a leg up was not fed.
The article published was a look back over the first 10 years of TheStreet.com and how the dot.com newswire has survived where others have failed. Cramer credits the uniqueness of the company and the lack of fear to buck the system for the company's ultimate success. To illustrate his point Cramer delves into the underbelly of the problem.
"I remember when we visited a major brokerage house two years into our launch. We needed money, for certain. We needed institutional backing to survive. This brokerage wanted our copy because we had tested among users as the most honest and actionable of any site on or off the Web. They wanted me to write a column about mutual funds that they could vet so it didn't upset anyone of the clients that were mutual funds.
It wasn't a big decision to say no; I just had to find a way to keep my temper rather than exploding and making everyone in the room embarrassed. It was one of the few times back in those days that I didn't respond with a vengeance. I just couldn't believe anyone would ask us to suspend what made us different and loved. "
Cramer's claims of TheStreet.com acting differently from his competition comes from his response to turn down this major brokerage house in the request to provide pre-publications for vetting prior to articles reaching the public. An similar allegation now resting in Federal Court as several business issuers have filed suit against several hedge funds and research firms for doing just that.
To most of us, this would be considered an illegal and unethical act if such an act were to be taken. Having a major brokerage firm ultimately ghost write a publication or provide editorial responsibilities to a publication begs for conflicts of interest violations yet, according to Cramer, it was somewhat standard practice between Wall Street and the financial press. At least that is the crux of his story here.
"So, why have we survived and thrived? What has made us so different that the digital versions of The Wall Street Journal, Forbes, Fortune and BusinessWeek didn't kill us?
I think it has to do with what got us started in the beginning: our independence. We have been pointed, we have been directional, we have been judgmental. We have never been afraid of telling the truth, of angering the big institutions that everyone said we couldn't afford to run afoul of. We are trusted to be smart and right and not beholden to those who demand neutrality."
Bottom line, Jim Cramer is claiming to be fearless in an environment where Wall Street rules by the stern hand of fear. Cramer claims to have deviated from the normal practices and relationships of Wall street and the media and survived to tell about it.
In the on-going investigations into possible conflicts between hedge funds, research firms, financial press, and the corporate issuer, those accused of illegal business practices are those once brought up through the ranks of the Wall Street system. Hedge Fund managers today were the Wall Street players of yesteryear. The business mentality, the power, the ability to strike down any dissention remains part of the mentoring process in reducing your opponent to dust.
The law of Wall Street is the law of fear.
The sorriest aspect of Mr. Cramer's article was that what he feels is the strengths of his company are really only a conviction of what the rest of the industry is about. Cramer is proud that TheStreet.com did not crack under intimidation yet Cramer ignores the fact that TheStreet.com failed to alarm the investing public that this intimidation and questionable business practices even existed.
Cramer certainly acted in fear. Just not the singular fear he speaks of. A man that watches a stoning take place, and elects not to throw the stone is just as guilty of such an act if he also fails to report those who were.
Our capital markets must run free of the corruptions that come from terrorizing the financial press into running vetted news or terrorizing public companies. The financial institutions should not be using the capital the public entrusts them with as the instrument of fear in gaining higher and higher power and authority.
For these capital markets to be trusted, the conflicts between the financial press and Wall Street must be clearly broken. Cramer's article, if truthful, proves the conflicts exist now lets take it serious enough to fix it. That responsibility o fix this problem lies squarely with the members of Congress and the SEC who have, to date, also succumbed to such levels of intimidation by the member firms.
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006