A hedge fund goes after a blogger

Andrew Ross Sorkin of the New York Times writes about hedge fund manager David Einhorn’s attempts to find out the name of a Seeking Alpha blogger who disclosed one of his investments.

Sorkin writes, “The case could be a watershed for both the reporting of financial news using anonymous sources, and perhaps more important, the increasing trend of confidential information being posted anonymously on social media like Twitter and the comment sections of established news websites.

“Leaks to the media are a well-worn tradition on Wall Street. Yet rarely do firms go after the leakers — or the media outlets that published the leaked information — in court. It is not necessarily a criminal violation to leak confidential information, but it may be a civil violation if an individual breached a fiduciary duty or breached a specific agreement to keep certain information private.

“Journalists have traditionally been protected by state shield laws or other court protections that allow them to publish confidential information without disclosing the identity of their sources. Even when courts do get involved, many journalists are willing to go to jail rather than comply with judges’ orders.

“But what happens when the source of the information bypasses journalists or news organizations and goes directly to the public through an anonymous blog or social media? Are those individuals protected by a journalistic privilege? What if their motives go beyond mere reporting? And are courts willing to appear to limit freedom of speech rights to intervene in what is largely a commercial matter?”

Read more here.