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Jim Cramer Speaks Out About Subpoenas on CNBC Today!

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 3/7/2006 1:31 PM

James Cramer just said at 12:35pm PST on CNBC Stop Trading:

"There's no subpoena in the world that is positive."  

"The innocent guys don't get the subpoenas."

He also said, "The bears got a chokehold on the media."

Huh. Interesting perspective. For once, I agree.

Completely.

Now, he was speaking about Sherwin-Williams, but can anyone see any reason why that wouldn't apply to Gradient/Rocker, TSCM, Jim, Herb and Carol?

I can't. If the shoe fits...

Apparently Cramer agrees with the 89% of CNBC respondents that supported the SEC's issuing subpoenas to them. That is positive. I hope the SEC is listening.

Comments?
Copyright ©2006 Bob O'Brien
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Comments (42)
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Joel on 3/7/2006 1:41 PM
Please post the entire transcript.

Hard to comment without all the information.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By bobo on 3/7/2006 1:44 PM
That's all I was able to get so far. I'll post more as I get it.

But is that hard to fathom? Cramer himself making those statements? Maybe he meant, "For everyone but me and my hedge fund buddies, and the research companies I claim I never heard of (but which was apparently a lie), subpoenas are not positive and innocent guys don't get them."

Sort of an, "All pigs are created equal, but some are more equal than others" comment?

Hard to argue with the wisdom of his observations as stated...
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By browntrout on 3/7/2006 8:05 PM
Gail- Nice article- NOT. If the spin on what Chris Cox is doing concerning financial reporters is true then I have only one thing to say: IMPEACH SEC Chairman Chris Cox NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Wonder Boy on 3/7/2006 8:20 PM
Molon Labe----

Good find. Frightening read.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By bobo on 3/7/2006 8:36 PM
I love how in all these articles, they spin like mad, and just ignore point blank the statements that Cox made, directly, on CNBC - namely that journalists that abuse their privilege will get the book thrown at them, much like a dirty cop.

And that he fully supported his Enforcement division's actions, and wasn't in any way going to interfere with their investigations.

What is amusing to me is that they repeat the "draconian" line over and over, and yet don't mention a peep about OSTK prevailing in the suit that is driving much of this. They also fail to mention Cramer's behavior, or the likelihood that there is something to all these subpoenas being handed out. No, it is as though there is only one truth, and if Cox is going to go ruin that truth for them, then they will simply ignore his statements.

Amazing.

We live in Soviet Russia, where the only news is whatever the official party line is for the day.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Wonder Boy on 3/7/2006 8:46 PM
There is no truth----only fiction, good and bad.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By browntrout on 3/7/2006 8:54 PM
Bobo-We differ in that I do not believe that COX is going to follow thru on those subpoenas for Cramer, Carol and Herb. I believe he is trying to come up with a way to stop them hence the BIG MEETING of COMMISSIONERS. If he was going to proceed he would already have announced that the subpoenas were going forward. He has already seen the evidence and I believe that he was well informed prior to the press saying he did not know anything about it. So-- The big question BOBO is if he is doing as I indicate and the article posted here tonight from Orange Co. seem to confirm his intent will you help promote an impeachment against COX? Time for ACTION!!!
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By rtway1 on 3/7/2006 8:58 PM
Now would be the perfect time for an independent newspaper to come forward. The public is ripe and ready for a fair and honest paper like Clark and Jimmy and Lois worked at. I don,t mean that to be funny, I am serious. Take us back to the days of reporting and letting people think for themselves. I hope Bobo will archive some of this quoted trash, so that we can come back with both barrels when the poop hits the blades and we have the oppurtunity to twist the blade as they have. Don,t forget to get your shares from your broker, they are getting slimmer. I ordered The Johnny Cash movie and a bunch of cd,s from our favorite store, it came in less than a week. Oh, by the way, Overstock does not have any of Gary,s safari books on catching rabbits.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By dave on 3/7/2006 9:04 PM
They are using cover up technique number 9. They are slowly admitting there are a few bad apples, maybe Rocker partners and a few paid reporters and a bad research firm, but they are deathly afraid that the activists will focus on the elephant in the room:

WHY DOES THE SETTLEMENT SYSTEM NOT SETTLE TRADES?

The best way to get this fixed is to keep the focus on the settlement system and not let them get us distracted by the merits of one or two stock manipulation cases.

9. Come half-clean. This is also known as "confession and avoidance" or "taking the limited hang-out route." This way, you create the impression of candor and honesty while you admit only to relatively harmless, less-than-criminal "mistakes." This stratagem often requires the embrace of a fall-back position quite different from the one originally taken.

The reason the cover up is so huge is because the dollars are so huge. Even at a $6 billion fail, do you know how big that is?

If you counted to six billion as fast as you could without doing anything else (and you had some great longevity genes), it would take you 180 years.

I think the real problem is WAY bigger than that. We have a settlement system that has worked in secrecy since the 60's and I think they've been tempted to cream of a big payday for themselves at our expense.

There is only one way we can fix this quickly and that is to make sure everyone else knows about it.

Post http://www.thesanitycheck.com and http://www.investigatethesec.com to at least one blog or stock thread or tell at least one new friend at least once per day.

It will seem pointless, but it isn't. You won't get immediate feedback, but it will ripple out and the numbers will grow until a critical mass of investors visit this site each day.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By rtway1 on 3/7/2006 9:29 PM
I got your point Dave,and I am sure those people who have NFI and OSTK should know by this time that they should be calling their broker and asking for their certificates of NFI and OSTK. Most of these people got a lot of great information from the educational site that helps investors from being used and abused, that site http:/www.investigatethesec.com and http:/www.thesanitycheck.com has informed thousands of people of the fraud that prevails on wall st. and how the paid bloggers promote these practices.
Read the source documents! By Cynic on 3/7/2006 9:58 PM
Check out the documents at

http://www.shareholder.com/overstock/suit.cfm

A good example:

http://www.shareholder.com/overstock/downloads/ballash%20declaration.pdf


One of several reports from analysts who worked at Camelback/Gradient discussing how Rocker and Herb were colluding on making the reports more and more negative.

Why not have a reporter copy paste some of these statements? Perhaps I missed it, but I would think excerpts from these depositions would appear as a "sticky" on this blog. Whadda you say, EB?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By rtway1 on 3/7/2006 10:45 PM
Mark are your shorts bunched up a bit, relax and take a deep breath, and then think about all of the fine stuff our company sells at great prices. You would do well to think about how to learn more about clearing up Reg.Sho. and the Refco case, and the Elgindy sentencing coming up soon, and if you have time after all this read one of Gary,s books for a good nights sleep.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By InTheKnow on 3/8/2006 7:08 AM
I love the following 2 lines from
JONATHAN LANSNER
Register columnist
jlansner@ocregister.com :


"Overstock's so miffed, they've sued a pair of these critics. But last week the company said it will restate four years' worth of results due to accounting errors."

This is the typical BASHER type reporting that links two items and skews the second as if it were bad.

What the article didn't report was that the restatement was good because it decreased the amount of their loss due to the fact that OSTK's accounting practices were TOO CONSERVATIVE!

Typical bullcrap reporting.
*** Interesting Read *** By InTheKNow on 3/8/2006 7:09 AM
Faulking Opinions - Mar 6, 2006 - Printable Version
- DTCC Claims are Smoke and Mirrors
by Dave Patch
(Editor's note: This is a letter from Dave Patch of www.investigatethesec.com to Amanda Lang of Report on Business TV, after she quoted the DTCC as saying that Fails to Deliver on stocks were only $6 billion per year. The interview with Overstock.com's Dr. Patrick Byrne can be seen at http://www.robtv.com/shows/past_archive.tv , fast forward to the 24 minute mark.)

I listened to your Squeeze Play telecast Monday night and was impressed by the overall interview with Dr. Patrick Byrne.

If I may, I would like to reply to the comment from the DTCC regarding Fails to Deliver and the issue of $Quadrillions settled with only $6 billion in FTD’s.

This number is a smoke and mirrors figure and I will explain why. You then must ask yourself why they would mislead you as they have and to continue to deceive the overall investing public.

The quadrillion figures that the DCC touts is an aggregate total figure of trades settled in a one year period. What is not understood is whether this quadrillion figure includes fails that are covered through the stock borrow program and at what magnitude these fails covered through the SBP are within the quadrillion figures presented. The DTC should be presenting data that separates out the total value of trades that settle through the legal seller delivery process and what percentage of overall trades fail for one reason or another. That would be the first valued snapshot of the market settlement system.

Furthermore, the DTCC claimed that they have only $6 Billion in Fails to Deliver compared to a quadrillion in settled trades. That is again a misrepresentation of facts.

That $6 Billion is a figure representative of mark to market daily fails and changes daily. It cannot be equated to the quadrillion as the quadrillion is a summation of all trades executed through the course of a year where the $6 Billion is only an aggregate snapshot of any given trade day.

As an example, Lets say that on Monday the DTCC carries $6 Billion in aggregate FTD’s on the books and on Tuesday $1 Billion of those FTD’s becomes settled but another round of fails is entered into the system with an equal $1 Billion in market value. The aggregate $6 Billion remains on the books on Tuesday but by direct comparison to the quadrillion figures presented, we now have $7 Billion in FTD’s based on a rolling aggregate total. For the DTCC to use apples to apples comparison, they need to identify the aggregate sum total of fails that crossed the DTCC settlement system through the course of the year. I can guarantee you it is far greater than $6 Billion.

In addition to this type of accounting, the DTCC relies on mark-to-market calculation of a FTD. The Settlement system was intended to insure prompt settlement to not have great disparity and liability between trade date and execution date. It was this liability that reduced the trade settlement guidelines from T+5 to T+3 and now is being evaluated for T+1.

In the case of a settlement failure (lets use Overstock as an example), An FTD that took place in August 2005 occurred at $46.00/share value. A 1000 share FTD represented $46,000. A similar 1000 share trade executed that same day and settled also carries a $46,000 value. But because that FTD remains on the books today, the FTD is now being carried at a liability of only $23,000 (1000 shares at $23.00/share). The DTCC booked the high cost of the trade in calculating their quadrillion settled but has allowed the settlement failure to diminish in value mark to market.

It is therefore imperative that the DTCC presents figures in real time dollar values at the time of the trade date when comparing the value of the fails executed annually to that of trades settled annually. Allowing for trade value depreciation in an oversold manipulative market only allows for the problem to be masked. From data obtained through court order, we know that the DTCC carried FTD’s in a company called Eagletech for over a calendar year where the trade origination price was $11.00/share and the trade was ultimately settled at $.50/share. How the DTCC book kept this trade in their comparative analysis would be interesting.

As for whether any of this is a small number or a large number, we live in a technology sector where supercomputers can track nearly everything and where a trade can be settled in nanoseconds if the shares are legitimately available. You would not allow your bank to have a 2, 3, 4% error in their processing and thus neither should the stock markets. Industries strive for 6 sigma quality and the DTCC is far from that achievement.

The funny thing about accounting and numbers is that it is very easy to pull a fast one if you simply stick to your guns. The DTCC has been pulling a fast one by creative accounting that has ultimately misled the investing public. If they were a publicly traded company they would be under investigation by the SEC for fraud in the dissemination of information.

I would hope that the DTCC would have the honesty and courage to reply to you with appropriate figures as they have turned down so many others seeking such accuracies in information. If it is really not a problem they should not be concerned with providing such information.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Niel Storts on 3/8/2006 7:06 AM
Well good. Now I don't have to wait for the actual copies of the transcripts from the Marin court to be positive of every comma in my remembered "quote" of The Most Honorable Judge Veron Smith. I will again "paraphrase" my take on exactly what the good judge "ment" by his statement........ 'You clowns are just a pack of f#@king liars.' I am not fluent in leagalese, but can anyone come up with any thought that the good judge was not thinking those sentiments when he actually wrote his statement? It certainly seems that way to me.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By aries on 3/8/2006 7:21 AM
Overstock.com suit can proceed
Calif. judge denies defendants' anti-SLAPP motion
E-mail | Print | | Disable live quotes By Ruth Mantell, MarketWatch
Last Update: 12:50 AM ET Mar 8, 2006


SAN FRANCISCO (MarketWatch) -- A California judge has allowed Overstock.com Inc. to proceed with its suit against Gradient Analytics Inc. and Rocker Partners LP, Overstock said Tuesday evening.
Superior Court Judge Vernon Smith in Marin County, a San Francisco suburb, denied the defendants' motions to dismiss the suit under the anti-strategic lawsuits against public participation (SLAPP) statute, Overstock said.
Overstock.com (OSTK : overstock com inc del com

7:30am 03/08/2006

OSTK22.92, -0.06, -0.3%) alleges research firm Gradient Analytics and hedge fund Rocker Partners "colluded to drive down Overstock.com's stock price for their own profit." The original suit was filed in August 2005.
Smith ruled that the anti-SLAPP statute addresses commercial speech, and Rocker's "alleged misconduct in conspiring with Gradient...is not, on its face, promotional in nature," according to Overstock.com.
In a statement Tuesday, Gradient said the company plans to immediately appeal the ruling. That action could delay proceedings in the trial court until the appellate process has been exhausted.
Scottsdale, Ariz.-based Gradient said First Amendment case law protects its rights. "If this decision stands, independent financial analysts will become easy prey for the companies they study - and everyone would lose," Gradient said.
The Securities and Exchange Commission is investigating allegations of manipulation regarding Overstock's shares.
Ruth Mantell is a MarketWatch reporter based in San Francisco.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By chris on 3/8/2006 7:23 AM
It is no longer about a money settlement for the named parties, as the DOJ will want to put people in jail to set an example. It now comes down to how good a deal each of them tries to negotiate for him/herself by handing over the other guy.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By aries on 3/8/2006 7:25 AM
Press Release from Overstock

California Court Allows Overstock.com Lawsuit Against Gradient Analytics, Rocker Partners, et al. to Proceed
Tuesday March 7, 9:18 pm ET
Court Finds That Overstock.com has Established 'a probability that it will prevail on the merits of its complaint'


MARIN COUNTY, Calif., March 7 /PRNewswire-FirstCall/ -- Overstock.com® (Nasdaq: OSTK - News) today announced a significant development in its ongoing lawsuit against Gradient Analytics and Rocker Partners and their respective principals: The Honorable Vernon F. Smith of the California Superior Court of Marin County issued a final ruling denying the Defendants' demurrers and motions to dismiss under California's Anti-SLAPP law.
Judge Smith wrote in the ruling, "Rocker's alleged misconduct in conspiring with Gradient to issue negative investment reports is not, on its face, promotional in nature," and that, "The case law leading to the adoption of §425.17 [California's Anti-SLAPP law] was addressed to commercial speech such as labeling, advertising and other 'marketing-related activities.'"

Additionally, Judge Smith ruled that, "The Anifantis declaration is sufficient prima facie evidence demonstrating Gradient's predecessor (Camelback) published 'special reports' in reckless disregard of the truth (i.e. with actual malice)."

Jonathan Johnson, Overstock.com's senior vice president, legal, said, "This is a big win for Overstock, but not an unexpected one. We have said all along that the Defendants' motions were nothing more than a desperate attempt to prevent the case from ever reaching discovery."

Overstock.com filed its original lawsuit against research firm Gradient Analytics and hedge fund Rocker Partners in August 2005 when it learned the firms colluded to drive down Overstock.com's stock price for their own profit. More information about the lawsuit, including a copy of the court's ruling, the original court filing and declarations from three former Gradient employees, can be found on Overstock.com's investor relations Web site at www.shareholder.com/overstock.

About Overstock.com

Overstock.com, Inc. is an online "closeout" retailer offering discount, brand-name merchandise for sale over the Internet. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory liquidation distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ National Market System and can be found online at http://www.overstock.com.

Overstock.com is a registered trademark of Overstock.com, Inc. All other trademarks are the property of their respective companies.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By dave on 3/7/2006 1:54 PM
The animal farm reference seems very appropriate.

Who is the farmer?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By rtway1 on 3/7/2006 1:58 PM
I heard him even though he talks so fast, got to make sure he didn,t slide another word in there. I was astonished when I heard it. Maybe he likes us. What color bridge do you want.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Camelfucher on 3/7/2006 2:04 PM
Wanna bet he weasels out by saying "Oh...you meant Camelback? Oh yeah I've heard of them, didn't know that Gradient was the same thing"

He also didn't meet Rocker on his own show before meeting him in a grocery store, and he also didn't lie 2 days in a row about Dendreon's Provenge drug trials in November days before a secondary pricing period went public.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Camelfucher on 3/7/2006 2:04 PM
Anyone Tivo krusty the clown saying that? We need sound bites, not just jpeg evidence, on the little bunny blog that changed wall street.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Camelfucher on 3/7/2006 3:51 PM
just a thought: this could be the first indication that JJ heard about the emails Byrne has seen about him that Byrne referred to yesterday? When caught, change your tune? Maybe he can go around and delete the jpegs on everyone's hard drives and Tivo's of him "BULL"ing a federal subpoena.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By mhelburn on 3/7/2006 3:48 PM
Sherwin Williams was being touted last week.. the pump...while the likes of Cramer were dumping or shorting....and now they have to get the price down.. what better way than to talk about a subpoena...blah. blah..blah... Where have I seen this before? When is there going to be a new story?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By NCANS FAN on 3/7/2006 3:50 PM
Bobster,

An OT'er for future reference for any documents that NCANS/sanitycheck/etc put out there....a link to a microsoft download page for a tool that takes out all the tracking/login data from MS-Office documents

http://www.microsoft.com/downloads/details.aspx?familyid=144e54ed-d43e-42ca-bc7b-5446d34e5360&displaylang=en
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By eager on 3/7/2006 3:53 PM
Sorry to change subject alittle but do you people think that they are starting to look deep into what happened at refco.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060307:MTFH13342_2006-03-07_20-12-19_N07375354&symbol=RFXCQ.PK&rpc=44
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Scott on 3/7/2006 4:56 PM
The opinion from Marin is on Overstock's site:

http://www.shareholder.com/overstock/downloads/DOC060307.pdf
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By n-tres-ted on 3/7/2006 5:43 PM
After reviewing the court's written ruling, OSTK won on every issue raised by the defendants except the 2nd cause of action was dismissed with leave to amend within 20 days (to allege basis for special damages). Defendants are permitted to request the opportunity for oral arguments on the issues covered on March 15. So they may want to come in and try to persuade the judge in court. Looks like a workmanlike judge to me.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By jcline on 3/7/2006 5:46 PM
Marin COunty Ruling FINAL for OSTK
They go to discovery!!!!!!!!!!!!!!!!!!!!

http://www.shareholder.com/overstock/downloads/DOC060307.pdf
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By stormchaser on 3/7/2006 5:53 PM
Ouch....ouch....that 2x4 up their ass has gotta smart...lolololol
OSTK lawsuit By et al on 3/7/2006 5:56 PM
The behaviors seem indefensible. I don't think that the situation is going to get prettier for the defendants. Will the Feds step in? Will they bring criminal charges? If I were an attorney I'd advise them to settle.. quickly before the Feds notice.. or is it too late? But the attorneys for the defendants, who haven't already quit, are just billing hours... the bleeding begins.

Is this the hot fudge high colonic being ordered?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By browntrout on 3/7/2006 5:57 PM
Sorry but the temporary ruling becomes final tomorrow. Look at the date- Mar. 8th.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By mfairview on 3/7/2006 6:16 PM
Anyone know if the judge had access to other evidence aside from the affidavits?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By n-tres-ted on 3/7/2006 6:51 PM
Affidavits submitted by the parties would be the only evidence considered by the judge.

According to my reading of the PB interview, this court case involving OSTK directly is NOT the "high colonic" to which he referred. That experience is to be at the hands of federal law enforcement "physicians."
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By mfairview on 3/7/2006 6:53 PM
n-trest-ed, would it have been all 8 affidavits or just the ones released to the public?
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By browntrout on 3/7/2006 7:03 PM
Gradient, Rocker, Herb and Jim-- Mom says time for your enemas!!!!!! Yuk Yuk! Bend over and open wide!
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Gail on 3/7/2006 7:05 PM
OCRegister.com: Measuring value of a free press

Measuring value of a free press
Columnist Jon Lansner thinks SEC Chairman Chris Cox has some good ideas about a free press.

JONATHAN LANSNER
Register columnist
jlansner@ocregister.com


[picture]
Chris Cox believes the financial press adds value to investors.


Business journalists should breathe a sigh of relief - and so should you if you're an investor.

Chris Cox, the former O.C. congressman who's now the SEC chairman, quite bluntly told me Monday that he's determined to keep his agency out of the way of hard-nosed financial reporters.

He believes that investors truly benefit from watchdog journalism that uncovers dubious financial practices.

So CEO types who were praying that nosy reporters might by muzzled by the Securities and Exchange Commission should think again.

The SEC, Cox says, "relies on aggressive investigative journalism to uncover wrongdoing in companies. Therefore, the SEC should do nothing to chill that work."

Cox's agency took a horribly poor detour in its investigation of an ugly squabble between Overstock.com – a poor man's version of online retailing giant Amazon– and investor/critics of the company's business practices.

In essence, the SEC was attempting to force some reporters to turn over their notebooks so the agency could see if the embattled company's charges about a stock-smashing conspiracy had any merit.

It's always scary in a society that cherishes an independent press when regulators or other law-enforcement officials pursue reporters and their work as part of a government probe.

The sources that help reporters find corporate villains might not be very candid if they feared journalists' records could become government fodder one day.

Unfortunately for Cox, he learned his agency was subpoenaing reporters for their work from news reports.

The bureaucratic embarrassment did not deter Cox from almost instantly calling what he describes as a "time out" in the document hunt. While he wouldn't publicly assign blame for the incident, he was remarkably apologetic about the threat it posed to journalists.

Within two weeks, Cox expects SEC staffers to compose formal procedures and protocols for such draconian investigative measures.

Cox says his bold move was intended to send a message to what he called an important constituency of his agency – business reporters: "Financial journalists need to understand that the SEC considers them vital partners in our mission."

COUNTERCHARGES

The SEC got into this mess by probing what's a common Wall Street fight: a company feuding with "shorts" – investors who profit if the price falls.

I won't bore you with all the small details, but critics claim Overstock isn't honest with its investors about its financial success. Overstock says the critics have conspired to smear the company's reputation and profit from a stock fall.

Overstock's so miffed, they've sued a pair of these critics. But last week the company said it will restate four years' worth of results due to accounting errors.

This ongoing battle has been grist for copy at several news organizations. The SEC, which is trying to figure out who is lying about what in this Overstock debacle, decided to subpoena several journalists, demanding they turn over their records involving coverage of Overstock.

Neither Cox nor the SEC's top leaders were aware that lower-level SEC staffs had served reporters with these harsh document demands. Cox notes that such tactics are highly unusual for the SEC.

And I'm betting after my chat with Cox, new SEC rules will highly discourage such searches that target the financial press.

Cox told me that fresh subpoena guidelines will "almost certainly spell out that the federal government should pursue information in the course of law-enforcement work through other means whenever possible."

SOOTHING PROTECTION

It's refreshing to see a government official stand up so boldly for investigative journalism.

I'm not saying this just because I gain some professional advantage from government agencies that respect a press that's free to pursue its work.

Or because I'm the current president of the Society of American Business Editors and Writers, the largest trade group for financial journalists that need press freedom to thrive.

I'm thrilled because Cox is willing to say that the financial press adds value to investors by enhancing their ability to watch the markets. Cox's seven months at the SEC have been highlighted by his push to get more corporate data to investors - including plans to publicize additional salary and benefit details from company executives.

"The agency's job, in part, is to promote disclosure of material information," Cox says. "If that information is not publicly or widely disseminated (by the media) – or thoughtfully analyzed by the press - our (SEC) disclosure efforts fall far short."

The SEC will never be able to sniff out every fraudster running a company or misusing investor dollars. In fact, too much government oversight could cripple American commerce.

You'd hope that big-time investors – especially Wall Street pros – would more frequently cry "Foul!" or at least "Sell!" when they find corporate misdeeds. But as recent corporate scandals proved, too often Wall Street's more interested in selling services to CEOs than playing corporate cop.

So a watchdog press is a powerful and much-needed check against corporate greed and malfeasance.

We in the press aren't perfect by any means. But at least our professional goals are usually in line with our audiences' need to get facts or financially unbiased opinions about what's right or wrong inside the markets.

I hope Cox will steer the SEC to new investigative rules that largely prohibit the agency from bullying enterprising reporters with the threat of legal sanctions.

Your investment portfolio – as well as mine – will be better off for an unfettered financial press.

--------------------------------------------------------------------------------
See Lansner on KOCE-TV's "Real Orange." Mondays, 6:30 and 11 p.m., and Tuesdays, 8 a.m. CONTACT US: (714) 796-7966 or jlansner@ocregister.com

http://www.ocregister.com/ocregister/money/homepage/article_1032197.php
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Wonder Boy on 3/7/2006 7:06 PM
From OSTK board-----
http://biz.yahoo.com/prnews/060307/latu133.html?.v=24

Here's a short quote:
Additionally, Judge Smith ruled that, "The Anifantis declaration is sufficient prima facie evidence demonstrating Gradient's predecessor (Camelback) published 'special reports' in reckless disregard of the truth (i.e. with actual malice)."
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By dave on 3/7/2006 7:15 PM
Regarding Lansner's article, I think it is important that the SEC allow honest journalists with integrity to do some muckraking and to dig up corruption. A free press is paramount to outing the bad guys.

Go get'em EB and fellow bloggers - you seem to be the only true journalists covering the stock market.

These stock manipulators, on the other hand - with their paid pap - lock them up and throw away the key.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By Molon Labe on 3/7/2006 7:26 PM
Here is a link to the Biovail lawsuit, in case anyone is interested in the mechanics of how these guys operate:

http://nakedshorts.typepad.com/nakedshorts/files/Biovail.pdf

If nothing else, just read para. 96 on p. 39.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By rtway1 on 3/7/2006 7:37 PM
How come not one of these journalist will say the FTD word or NSS word, or where are all the shares because of a huge imbalance which leads to the Reg. Sho. word. This is the same tune with with a new singer. Free and investigative press works both ways, the end result still should be for the public that they report to, not their friends in journalism, so that they , heaven forbid, might be accused of not doing their job.
Re: Jim Cramer Speaks Out About Subpoenas on CNBC Today! By n-tres-ted on 3/7/2006 7:47 PM
Mary,

The judge considers whatever affidavits the parties file. I don't know what OSTK filed, but I doubt they would hold back important evidence. However, Bobo would be more familiar with whether affidavits might have been held back or for what reason they have not been made public.

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