OLD Media Moves

Was Taibbi a hoax victim?

October 6, 2009

Former BusinessWeek writer Gary Weiss believes that Rolling Stone writer Matt Taibbi, who has been writing about the financial crisis and Wall Street, has become the victim of a hoax about short selling.

Weiss writes, “Two things struck me as odd about this whole situation. One is that naked shorting conspiracy theorists, who you’d expect to rally around Taibbi in a situation like this, were strangely silent. So was Penson Financial Services, the actual location of the naked swindle in question.

“This is a serious accusation. If Penson okayed a ‘locate’ of a massive number of shares without good cause, it could be accused of being an accomplice (or accessory or something) to a genuine market manipulation. See, while I’ve said numerous times that naked shorting conspiracy theories are overblown hooey, the fact remains that if someone actually did use naked shorting to drive down the price of a stock, that would be market manipulation.

“If a trading system or clearing firm allows naked shorting that could drive down the price of a stock, it’s a big problem. And by the way, that’s got nothing to do with Regulation SHO or any of the other sturm und drang from the SEC over the past few years. Market manipulation has always been illegal.

“If not, it’s Taibbi who’s got the big problem. Someone gave him a ‘fugazy’ video and he got taken in. Is that what happened?”

Read more here.

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