OLD Media Moves

Subpoena requests firm's contact with eight financial reporters

March 28, 2006

The New York Post is reporting Tuesday that a subpoena to research firm Gradient Analytics asked for records of all e-mail and phone contacts Gradient has had with approximately eight financial reporters.

The eight reporters are Marketwatch’s Herb Greenberg, Mad Money host Jim Cramer, Dow Jones Newswire’s Carol Remond, Bethany McLean of Fortune magazine, Jesse Eisinger of the Wall Street Journal, Elizabeth MacDonald of Forbes Magazine, former Barron’s editor Cheryl Strauss Einhorn and Roddy Boyd from The Post, who wrote the article.

New York PostBoyd wrote, “An individual familiar with the situation said Gradient planned on seeking the permission of the reporters’ news organizations before complying with the order.”

In February, Greenberg disclosed that he had been subpoenaed by the SEC and criticized the action. Afterward, SEC Chairman Christopher Cox backed off the subpoenas, saying the regulatory agency needed to develop a policy on when it would seek information from financial reporters.

The investigation centers around Gradient and Rocker Partners LP and their alleged attempts at driving down the price of online retailer Overstock.com. The president of Overstock, Patrick Byrne, has been criticizing the actions of reporters for using information from short sellers in their writing.

Former BusinessWeek writer Gary Weiss posts on his site about the latest subpoenas. He writes, “So it stands to reason that, being singularly ineffective at punishing real transgressions, the SEC would do an outstanding job of wasting its time. Thus the current witch hunt against the handful of journalists who engage in tough financial journalism.”

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