Business journalism and corporate fraud

By Claire Williams

For business journalists, catching crooked companies requires skepticism and close attention to the details that should cause hesitation, said journalists in a workshop Saturday.

Roddy Boyd, founder of the Southern Investigative Reporting Foundation, said the foundations of detecting corporate fraud are in the “things that make you go hmmm.”

Boyd, who worked for Fortune magazine, the New York Post and The New York Sun, joined other business journalists at the Society for American Business Editors and Writers conference at Arizona State University being held Friday and Saturday.

Boyd highlighted a number of factors that should give a business journalists pause, including dramatic spikes and falls in revenue, and outliers and incongruities in a company’s mandatory filings.

Other red flags that could indicate corporate fraud are reverse mergers, an unknown auditor of a decent sized company and companies that are domiciled in states such as Florida and Utah.

“I expect I will die astounded that the regulatory apparatus finds itself unable to sanction some of these companies,” he said.

Boyd said his business journalism career has not always endeared him to the subjects of his writing.

“I’ve made some enemies,” he said. “You are never going to be popular doing this stuff.”

Boyd said reporters should look for trends and put things into perspective for the readers instead of getting bogged down in financial data.

“Don’t focus on the weeds,” he said. “Tell me what the forest looks like.”

Claire Williams is a UNC-Chapel Hill School of Journalism and Mass Communication student attending the SABEW conference on a Talking Biz News scholarship