Saturday, April 01, 2006

'60 Minutes' Revisited

Two good articles today -- in the New York Times (subscription only) and -- debunk last Sunday's awful 60 Minutes episode on Biovail's tussle with short-sellers.

Great stuff. Joe Nocera's column was the most eloquent defense of shorting outside of you-know-what. TheDeal's article made the following interesting point concerning the 60M piece and CEO Patrick Byrne:
. . . Byrne hasn't gotten the friendly treatment from "60 Minutes," or any other big media outlet, for that matter, probably because, in a conference call last year, he charged that several high-profile journalists were players in a vast conspiracy theory dominated by a mysterious Wall Street puppet master he called the "Sith Lord" and inexplicably blurted out that he's not a cokehead. Contrast this behavior to Melnyk's, who, according to The Wall Street Journal, hired public relations firm Sitrick and Co. to help push his case against Gradient in the media. If "60 Minutes" is any indication, PR pays.
What a shame. Is there no room for character assassination, paranoia and weirdness in our national discourse?

Does this mean that when a CEO promotes a conspiracy cult website that specializes in smearing and threatening reporters -- that, well, maybe such tactics don't win friends in the media?

I'm referring, of course, to Byrne's close association with the anonymously run "sanitycheck" website and -- you know, that's gotten me thinking:

Let's say, purely hypothetically now, that I run a company, and certain reporters have been mean to me or are asking tough questions.

I give the emails to my exchanges with those reporters to a "good friend who is anonymous" and he publishes those emails and attacks those reporters and performs other nice IR tasks on my behalf. Totally out of the goodness of his heart, of course! Or maybe not.

Is that kosher? Or is it whatcha call a "loophole" in the securities laws?

It's an interesting question, I think, and one that the SEC might want to examine when it's finished subpoenaing reporters and otherwise chasing down Byrne's conspiracy theories.


Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its listing and here for more information on the book, from my web site.

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