The short-versus-public-company fracas peaked in May 2006, a few months after the Stahl piece. The SEC, which was probing Gradient because of the corporate complaints, subpoenaed three financial reporters—Herb Greenberg of Marketwatch, Jim Cramer of TheStreet.com (and CNBC’s Mad Money show) and Carol Remond of Dow Jones Newswires—sparking an uproar. Journalists and their supporters argued that SEC probe infringed on reporters’ First Amendment rights and chilled tough reporting.
The SEC later dropped the subpoenas and backed away from the idea of subpoenaing reporters altogether.
The SEC dropped its Gradient probe last year.
As it turns out, SAC and Gradient were doing investors a favor. Biovail traded around $24 a share when the Stahl piece ran. Now’s it under $11, a drop of 55 percent, including nine percent on news of the SEC settlement. Dow Jones provides this two-year chart:
One can only hope 60 Minutes viewers listened to the shorts and not 60 Minutes.
But the ongoing SEC probe of Biovail was always going to be a time bomb under this story.
This week, it blew up.
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1189674162450
Posted by Dean
on Fri 28 Mar 2008 at 01:21 PM
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1189674162450
Posted by Dean
on Fri 28 Mar 2008 at 01:22 PM
Does the SEC investigation somehow exhonerate all parties involved? It seems that CJR has suddenly jumped to a conclusion that Gradient and SAC did no wrong because the SEC acted upon an enforcement issue. Facts remain, somebody well oversold Biovail and drove massive levels of unsettled trades into the markets.
The real issue I have with CJR acting high and mighty is more related to how this article does not reveal that a major financial source to CJR has a very direct and distinct interest in the direction of stories such as this. Kingford Capital, CJR's major funding source, is directly involved in this controversy and would like to see the stories spun against companies that address short seller abuses.
Posted by Patchie
on Wed 28 May 2008 at 06:39 AM