A story in the San Antonio Express News about the investigative business journalism Web site ShareSleuth.com quotes attorneys and ethics experts saying that the site could be sued and will run into credibility issues.
The site is run by former St. Louis Post Dispatch business reporter Chris Carey and funded by billlionaire Mark Cuban, who is shorting stocks mentioned on the site.
Business reporter L.A. Lorek wrote, “Sharesleuth.com may not be involved in insider trading, but Cuban will make enemies that could sue, said [Robert] Shearer, the Houston securities lawyer.
“Darren Robbins, principal with the San Diego-based law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, said: ‘If the story comes from inside the company, then it’s a problem — the information has been misappropriated.’
“If the story comes from regular reporting and investigating, then it’s ‘pretty hard to fault someone that disseminates a story that is truthful,’ he said.
“Nevertheless, because Carey and Cuban get their salaries from their investments, it undermines their credibility, said Kelly McBride, who teaches media ethics at the Poynter Institute in St. Petersburg, Fla. Their loyalty is divided between choosing stories and exposing businesses that could make them a lot of money and truly serving a public interest.
“Cuban says the conflict doesn’t exist because he isn’t trying to serve a public interest.
“‘We will pick the stories that offer us the most upside,’ he said.
“While journalists may argue over Cuban’s motives, the net effect, when it comes to some stocks, is a more efficient market, said Michael Piazza, partner in the Irvine, Calif., law firm Dorsey & Whitney and a former Securities and Exchange Commission attorney.”
Read more here.
