The Wall Street Journal on the SEC's subpoenas

The Wall Street Journal wrote an editorial in Wednesday’s newspaper criticizing the SEC’s recent action to subpoena three journalists, including two — Marketwatch’s Herb Greenberg and Dow Jones Newswires’ Carol Remond — who work for the Journal’s parent company Dow Jones.

The Journal writes: “As long as journalists at Dow Jones are honestly reporting what they learn–and are on nobody else’s payroll–they are doing their jobs and serving the cause of efficient financial markets.

“The SEC’s subpoena flurry betrays an all too eager desire to manage and control financial information. It’s part of the mentality that a few years ago produced Regulation FD, which bars publicly traded companies from sharing certain information with research analysts before it is broadcast to the public.”

Later, the paper writes, “The irony here is that many financial reporters and columnists have benefited by receiving the leaks of those emails from the SEC and Mr. Spitzer’s office, spun of course to make a target company look bad. These journalists are learning how it feels to be on the receiving end of such blunderbuss discovery. At least they have the First Amendment to protect them, not to mention the airwaves or barrels of ink to defend themselves publicly. The average Wall Street trader has no such recourse.”

And then this parting shot: “Perhaps it’s too much to ask of our brethren in the financial press that they show greater skepticism toward the leaks and accusations of the SEC staff that are their daily bread. But it’s not too much to expect that Mr. Cox and his fellow Commissioners rein in their staff and return due process, rather than headlines, to the center of SEC enforcement.”

Read the editorial here.