Stanford coverage a bit misleading
Ryan Chittum of Columbia Journalism Review writes that the business media coverage of the Stanford Financial case has been somewhat misleading in describing the size of the alleged fraud.
Chittum writes, “The Journal, the Times, and the Washington Post call it an ‘$8 Billion Fraud’ in their headlines, and the Journal calls it that in its story, as well (the Times and Post do not). The Financial Times and Bloomberg donâ€™t put a number on the fraud, making clear itâ€™s an ‘alleged fraud’ involving ‘selling about $8 billion in certificates.’
“Sure, itâ€™s not technically wrong. Stanford is alleged to have sold $8 billion worth of certificates of deposit by misleading investors. But the ‘$8 billion fraud’ phrase implies that all or most of the money has disappeared, which as far as I can tell isnâ€™t the case. (UPDATE: Felix Salmon makes a great case for why most of it has likely disappeared.)
“The Stanford case is just bizarre. How could a firm not raise suspicions much earlier than it did when it was promising returns on CDs that doubled the average? And it was run in part out of Antigua.
“The SEC has been caught snoozing again and is scrambling to look tough. Check out this Reuters video of agents raiding Stanford. Talk about made for TV. You can practically hear a producer standing off camera, yelling ‘aaaand ACTION!'”
Read more here.