Thursday, June 22, 2006

CJR Daily: Those SEC Cops Mean Nothing

CJR Daily has a nice piece on the executive options media feeding frenzy. Or at least at was nice for a while.

After first noting that the Wall Street Journal has a "handy Options Scorecard, listing some 50 or so companies and noting which ones are currently being investigated by the SEC, the justice department, and so on," CJR says as follow:

But having your books looked over by the SEC no more makes you guilty of corporate malfeasance than having your block patrolled by a beat cop makes you guilty of kicking the tar out of your neighbor. With more than two-thirds of all SEC investigations resulting in clean bills of health, we humbly submit that the nation's greatest business paper should impose some minimum quota on its a priori insinuations of guilt.

True. However, the "scorecard" states very clearly that it's an "updated look at companies that have come under scrutiny in recent months for past stock-option grants." The Journal was simply recording the status of companies being probed on that issue. It has issued other "scoreboards" in the past, including a useful one on the mutual fund scandal.

I agree that coverage of the options scandal, such as it is, is overblown -- as was the mutual fund scandal and others. But overstating the case, as CJR Daily has done, doesn't help.

© 2006 Gary Weiss. All rights reserved.


Wall Street Versus America was 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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