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Technology Stocks : TheStreet.com, Inc. (TSCM)

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From: StockDung2/28/2006 1:36:17 AM
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StockGate: Cramer Shocks Financial World By Publicly Tossing Subpeona; 87% In CNBC Poll Support Journalist Subpeonas, Rebuke Cox / FinancialWire®

February 28, 2006 (FinancialWire) Even as U.S. Securities and Exchange Commissioner Christopher Cox bowed to pressure from Dow Jones (NYSE: DJ) and other media by proclaiming that subpoenas to journalists must pass through him and the full Commission, 87% in a poll on General Electric?s CNBC were saying they support the subpoenas, and TheStreet.com?s (NASDAQ: TSCM) Jim Cramer, also on CNBC may have turned the tide by arrogantly tossing a subpoena he received, something that never plays well to regulators.

February 28, 2006 (FinancialWire) Even as U.S. Securities and Exchange Commissioner Christopher Cox bowed to pressure from Dow Jones (NYSE: DJ) and other media by proclaiming that subpoenas to journalists must pass through him and the full Commission, 87% in a poll on General Electric?s CNBC were saying they support the subpoenas, and TheStreet.com?s (NASDAQ: TSCM) Jim Cramer, also on CNBC may have turned the tide by arrogantly tossing a subpoena he received, something that never plays well to regulators.

The subpoenas to Cramer and Herb Greenberg, who appeared on Cramer?s ?Mad Money? show, and to Carol Remond, who like Greenberg now works for Dow Jones, are part of an SEC investigation into alleged tainted research and collusion with hedge funds Rocker Partners, SAC Capital and others thought to relate to manipulative naked short sales of Overstock.com (NASDAQ: OSTK) and Biovail (NYSE: BVF), and perhaps others.

At least one panelist on CNBC?s Kudlow & Co. said that the subpoenas had in fact been signed off on by Linda Thomsen, the Director of Enforcement at the SEC, meaning the last of this episode is a long way from playing out. It is not believed an individual at the SEC at that level would have lightly signed subpoenas for journalists.

While Greenberg and Cramer wear their ?journalism? hats in defending themselves against the exercise of the subpoenas, both are also businessmen, and the question is in which capacity the SEC wants to examine their communications.

Greenberg was an editor for TheStreet.com when affidavits in the Overstock suit alleged what might be viewed as a relationship so close to Gradient Analytics (then Camelback Research) as to have been potentially conflictual if not collusive. In fact, one affidavit stated that a reporter, Brian Harris, working under Greenberg at TheStreet.com actually wrote some of the ?research? reports, and had office space at Gradient. When the story broke, the reporter?s name was apparently mysteriously removed from TheStreet.com?s masthead without notice or explanation.

The SEC is said to be looking into these relationships, and especially whether ?research? reports were routinely disclosed to hedge funds Rocker Partners and SAC Capital Management and others, before being released to the public, and whether there was a further knowing or unknowing relationship with certain journalists whereby the reports? ?findings? were disseminated more ?explosively? in such a way as to increase the profits of the hedge funds.

Steve LeCompte, managing partner of CXO Advisory Group LLC has in fact calibrated what he believes to be systematic front-running of Greenberg?s stock commentary.

That analysis, last made on June 16, 2005, is at cxoadvisory.com

Greenberg called those affidavits lies, and he and Cramer said that Overstock?s CEO Patrick Byrne is behind a conspiracy (Greenberg used the term about five times in the same sentence), apparently including the SEC investigations.

According to the New York Times, which draped its story around journalistic freedoms, as did Greenberg in a column, the subpoena asked for notes and discussions that Greenberg may have had with Gradient executives about not only Overstock but also Novastar (NYSE: NFI), Omnivision (NASDAQ: OVTI), Taser International (NASDAQ: TASR) and Navarre (NASDAQ: NAVR), most if not all of which are thought to have been targets of Rocker Partners.

The most surprised person on television was Larry Kudlow, who devoted a significant part of his show to a defense of the ?journalists? who had received subpoenas, when reporting the results of his program?s own poll. At the time, 80% were rebuking Cox and supporting the subpoenas. At press time, perhaps due to Cramer?s own live on-air ?performance,? the support had ramped up to an emphatic 87%.

You may vote on the question of the day, ?Should SEC Chair Chris Cox Be Rebuked for ?Quashing? Subpeonas?? at investrendinformation.com

For up-to-the-minute news, features and links click on financialwire.net

FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on investrend.com

For a free annual report on a company mentioned in the news, please click on investrend.ar.wilink.com

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