One Step Ahead

[Ignutz]

The SEC must show America that it can get tough with more sinister villains thatn Martha Stewart.

April 5, 2005 (FinancialWire) It’s now only 5 days until the airing of the Dateline NBC expose on illegal manipulative shortselling, scheduled by the General Electric (NYSE: GE) network this coming Sunday night, April 10, and Carol Remond, reporter for Dow Jones (NYSE: DJ) Newswire, finished “out of the money” Friday and Monday when she posted a scathing article that seems to have inexplicably vanished into the ether.

The article, “In The Money – Global Links As ‘Get Shorty’ Poster Child,” had inaccurately portrayed FinancialWire as failing to report aspects of the StockGate story it broke that the newswire had in fact reported. Meanwhile, the company at the center of the controversy, Global Links (OTCBB: GLKCE) exploded 105.88% on volume of 985,689, despite purported holdings of 100% of its stock by Robert Simmons, CEO of Zann Corp. (OTCBB: ZANC), whose own shares rocketed 51.52% Monday.

The Dow Jones article suggested that FinancialWire was inaccurate, but not for what it published. Instead it described “inaccuracy” as being what it said FinancialWire had “failed” to publish, which observers say is an odd criteria in journalism, if not an odd definition.

As it turns out, however, the “missing facts,” such as that Simpson had not taken “delivery of his Global Link shares,” that the company’s business prospects consisted of questionable real estate properties, that Simpson and Global Links CEO Frank Dobrucki had never been in contact, that Simpson and Global Links shared professional representation, and that FinancialWire did not identify Simpson as CEO of a company that was suspended from research by a separate division of the parent company, were not missing at all in the FinancialWire ongoing and continuing coverages of the Global Links episode.

FinancialWire not only reported all of these matters, according to a “Site Search” at the http://www.financialwire.net , but it had, as in several previous instances, roundly “scooped” Dow Jones on just about every point claimed.

The Dow Jones said Simpson “had no idea why (FinancialWire) wrote about his purchase.” A spokesperson for FinancialWire expressed amusement, saying the news service wrote about it because it was an “interesting story,” and “we were once again in a position to scoop Dow Jones,” apparently by a month. “But we do appreciate the Dow Jones instructional journalism,” the spokesperson laughed.

Dow Jones said that “FinancialWire didn't identify Simpson as CEO of Zann in its March 4th article. FinancialWire also failed to note that ATNG Inc., the previous corporate incarnation of Zann, became one of Investrend's corporate clients in July 2002. Investrend articles about ATNG or Zann indicate that coverage has been suspended because the company failed to provide access to Investrend's analyst. It's unclear when the suspension occurred. According to Zann's website, Simpson agreed to take over ATNG operations in October 2002.”

The SEC filings did not identify Simpson’s employment, and that appeared irrelevant March 4. In its follow-up article, after Simpson’s identify was known, the record shows FinancialWire reported all the information that Dow Jones erroneously stated it “failed to publish,” and information as to “when” a suspension occurred is readily available on its site to any reporter who cared to look.

And, noted a FinancialWire spokesperson, “our articles didn’t vanish into thin air, as apparently did Remond’s.”

FinancialWire is a member of the Online News Association. A search of the organization’s rosters didn’t show anyone representing Dow Jones or the Wall Street Journal’s online sites as members.

The Depository Trust and Clearing Corp. has also become defensive in advance of the upcoming Dateline broadcast. It says that the recent EuroMoney’s comprehensive series on “naked short selling” is just “sloppy journalism.”

“We will not accept silently this type of sloppy, one-sided journalism whether in print or broadcast,” said DTCC Deputy Counsel Larry Thompson, apparently in a warm-up to the expected onslaught of public opinion after the upcoming Dateline NBC network telecast.

The DTCC, which is run under the joint authority of the New York Stock Exchange and NASD, both government-sponsored SROs, may even have run afoul of serious laws against interference with the press, according to attorney Marshal Shichtman, Esq., who is investigating the organization’s purported collusion with Investors Business Daily in an attempt to censor or squelch further distribution of FinancialWire.

This comes hard on the heels of an ad in the New York Times (NYSE: NYT) from The Washington Legal Foundation, located at http://www.wlf.org , which has considerable clout in the Bush administration, with ten of its board members now serving in various capacities, including three, headed by U.S. Attorney General John Ashcroft, in the Bush cabinet. Its “In All Fairness” advertorial, “What’s Up With The SEC?” may be seen at http://www.wlf.org/upload/032805IAFSEC.pdf

The advertorial alleges that class action lawyers are colluding with short sellers “right under the noses of SEC investigators,” whose abuses cause “investors, employees, pensioners and companies” to “lose millions of dollars in stock value each year.”

The WLF said that the SEC has been “sitting on several complaints of misconduct” that it and the U.S. Chamber of Commerce have filed that detail “examples of questionable stock manipulation by short sellers and class action attorneys.”

The group says that the SEC is “looking the other way while class action attorneys enjoy a free-for-all, reaping millions in windfall fees to the detriment of shareholders,” and asks “why isn’t the SEC taking legal and regulatory action to prevent stock manipulation and to protect investors from the looting by plaintiffs’ lawyers? Shouldn’t there be rules and oversight to deter these trial lawyer abuses?”

It concludes that “the SEC must show America that it can get tough with more sinister villains thatn Martha Stewart.”

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