Herb Greenberg and shorts

Don Bauder writes in the San Diego Reader about MarketWatch.com columnist Herb Greenberg and his use of shorts as sources in the wake of the SEC subpoenas against Greenberg and a couple of other journalists.

Bauder writes, “Only a few journalists such as Greenberg have consistently warned investors about the fraud-infested market. He began shaking up the Bay Area in 1988 as a columnist for the San Francisco Chronicle. Ten years later he joined an online news outlet, TheStreet.com, and was told he could operate from anywhere. He chose San Diego. Two years ago, he joined MarketWatch.

“In San Francisco he uncovered the fraud at Media Vision, which eventually sent two executives to the slammer. Monitoring San Diego stocks, he spotted the accounting problems at onetime high-flying health-care glove maker Safeskin, which sold out to Kimberly-Clark, and similar woes at SureBeam, a maker of irradiation systems that went into liquidation bankruptcy in early 2004.”

Later, Bauder notes, “Initially, Greenberg responded gently, telling CNBC (for which he is a contributor) that Byrne should stay away from squirrel-filled oak trees. But as the invective heated up, Greenberg got more specific, calling Byrne ‘an emotional nutcase,’ a description close to that of CNNMoney.com’s ‘a bit of a nut job.’

“As the civil suit moved forward, the Securities and Exchange Commission began an investigation. Recently, the agency shocked the journalism profession by subpoenaing information from Greenberg, another Dow Jones writer, and Jim Cramer of TheStreet.com and CNBC’s frenetic Mad Money show. Greenberg says his subpoena sought all unpublished communications, including e-mails and phone records, between him and four organizations he had quoted and one he had never quoted.”

Read the entire piece here.