A Shot Across Sharesleuth's Bow
Sharesleuth, the Mark Cuban investigative-reporting-trading-vehicle, reports that the target of its first major story has fired what is known in the biz as a "shot across the bow." As often happens in situations such as this, the unnamed target fired off a nasty, threatening letter.
Targets of investigative stories are known to do that kind of thing, and all but the most timid editors will not be scared off by such tactics. What's not routine, however -- I can't recall ever getting a threat like this -- was the threat that Sharesleuth "could even face 'criminal liability' if any of the contents [of the story] are false or misleading."
I wonder if that may be a reference to the feature of Sharesleuth that has made a lot of people, myself included, uneasy -- that Cuban is going to trade on the info dug up by Sharesleuth pre-publication.
Cuban is under the delusion that full disclosure, by making it all legal, ties a neat bow around the whole thing. Fat chance. There are many problems with such a thoroughly skeevy and unethical arrangement, one of which is that it gives the targets of your stories a club they can use to beat you over head.
That may well be happening in this instance. Or maybe not. We shall see.
Sharesleuth also disclosed that it was "going to pay an independent fact checker to review our stories and ensure that the details are correct and the conclusions are neither false nor misleading." That's not a bad idea. Ditto for getting a lawyer to look over the story, preferably one who is up on his securities laws so that he can deal with this pre-publication trading stuff.
As you can see, pre-pub trading is a real Jim-dandy idea! A whole barrel of laughs, as I suspect Sharesleuth will soon be discovering if Cuban is foolish enough to actually do it.
© 2006 Gary Weiss. All rights reserved.
Wall Street Versus America was published by Penguin USA on April 6.
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