Stories in the Los Angeles Times, New York Times and Editor & Publisher this morning all seem to be missing the boat in the continuing story of the SEC’s action to subpoena business journalists. All three stories are focusing this morning on the fact that the regulatory agency whose business it is to protect investors and regulate public companies still thinks it can subpoena business reporters and have them hand over their notes and other pieces of information used in the information gathering process.
Business journalism is a different animal than government and crime reporting, where subpoenas are more frequent — and also contested. But it’s also very similar. We’re dealing with a situation here in which people share information with journalists because they believe it’s important for the market to know and the journalists can help disseminate that information.
The marketplace then determines whether the information is valid or not. The SEC needs to take a step back and review what it’s doing. To involve reporters in trying to discipline those in the marketplace conveys that the SEC doesn’t know how to do its own investigative work.
The LA paper wrote that SEC commissioner Christopher Cox “said he would prefer that the SEC exhaust other avenues before turning to the news media, which has a 1st Amendment right to gather information without government interference. He said he supported the ‘least intrusive’ means of dealing with the press in SEC investigations and also wanted to ensure that any information demanded of reporters would be ‘of objective importance’ in an investigation.” As a business journalist, that doesn’t give me any warm fuzzies inside.
Editor & Publisher reported that, “The new policy will lay out the circumstances under which it is appropriate for journalists to be subpoenaed in SEC investigations when other means of getting the information are exhausted, Cox told reporters. It will not require agency attorneys to get approval for individual subpoenas from the commissioners but will call for consultation.
“‘This would not be Soviet Red Army rules,’ he said.” No, but it would have a chilling effect on a business reporter’s ability to root out corruption in the markets if sources might be exposed. The analogy by the SEC commissioner conjures up images of something just slightly less than water torture.
The New York Times noted that Cox “also expressed strong support for the work of financial journalists, saying they had a ‘similar mission’ to that of the commission.
“‘The S.E.C. takes very seriously the role of financial journalists and we will do everything we can to work in a collaborative manner because we share a public trust,’ he said. ‘Our sensitivity to these First Amendment issues and journalistic responsibilities in no way requires us to back off from aggressive securities law enforcement.'”
This is the only statement from the Thursday cluster call that makes me feel somewhat good about what I do and how the federal government feels about business journalism. But given his other statements, I’m not sure I’m satisfied.
It may be time for business journalism as an institution to stand up and fight the SEC for what it believes in — the ability to do its job in providing a fair and accurate portrayal of the business world without repercussions.