WSJ in bed with short-selling demonizers

Reuters blogger Felix Salmon doesn’t like a recent Wall Street Journal article that looks at for-profit educational institutions and their friends and how they’re attempting to discredit investors shorting their shares.

Salmon writes, “Now, the results of the FOIA requests have been made available to the WSJ, which devotes three bylines and 2,000 words to their entirely un-newsworthy contents. What the WSJ doesn’t do is even attempt to ask any of Fernholz’s questions, let alone answer them. CREW is presented as an entirely unconflicted organization:

A group called Citizens for Responsibility and Ethics in Washington, or CREW, wrote to Education Secretary Arne Duncan last week that “certain hedge fund managers had direct and sustained input into the regulatory process.”

In what the group called “more troubling,” it said Education Department officials sought and received investors’ input despite knowing their financial motives, and asked for an investigation…

Investors were on the scene as well. Their efforts are revealed in large caches of documents and emails reviewed by the Journal, many of which surfaced as a result of a freedom-of-information suits filed by CREW, the Washington watchdog, and of legal action by a Florida for-profit college.

One investor, a New York firm called Quilcap Corp., sent a research article to an Education Department official, the emails show.

“It goes on from there — but the fact that the WSJ’s list of revelations is topped by an emailed research article says all that you need to know. The only reason the WSJ is covering this story at all seems to be that the information was not public before — but just because something was secret doesn’t make it newsworthy.

“The fact that the WSJ is covering a non-story is no big deal. Much worse is the fact that the real story — the corruption of liberal organizations — was right under their nose, and sitting in plain sight in any Google search, yet they completely ignored it. It seems that even the WSJ is much happier gratuitously participating in the demonization of short-sellers than in impartial coverage of the debate over for-profit colleges.”

Read more here.