Behind The Street’s “coverage” of a penny stock

Keith Larsen and Rick Rothacker of The Charlotte Observer write about articles that appear on TheStreet.com about a Charlotte-based start-up that makes action cameras.

Larsen and Rothacker write, “Those articles were written by Adam Heimann, a principal at Midam Ventures LLC. That’s the investor relations firm that has an agreement with Life Clips to run positive stories on a website called Tech Stock Insider.

“In a July 20 article on TheStreet, for example, Adam Heimann highlighted Life Clips’ 360-degree action camera and quotes the company’s CEO Bob Gruder saying ‘sometimes a regular snapshot doesn’t do the moment justice.’

“TheStreet article has a note that says Heimann’s piece is a ‘commentary by an independent contributor’ and that he held no stock in Life Clips at the time of publication. But the article doesn’t mention Midam’s contractual relationship with Life Clips.

“After the Observer made an inquiry about Heimann’s articles, Gary Henrie, counsel for Midam, wrote a July 29 letter to TheStreet saying it was his opinion that Heimann’s failure to disclose Midam’s relationship with Life Clips did not violate federal securities law.”