Kicked out of finance, and into journalism

By Felix Salmon
November 18, 2009
byline on Bloomberg News stories. Whitney was fined $55,000 last year by the CFTC and is subject to a permanent injunction, after being charged with false reporting and attempting to manipulate natural gas prices.

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Up until yesterday, Michael Whitney was a presenter on Bloomberg TV; he would occasionally get his byline on Bloomberg News stories. Whitney was fined $55,000 last year by the CFTC and is subject to a permanent injunction, after being charged with false reporting and attempting to manipulate natural gas prices.

Is it OK for a financial services professional who has run into major trouble with the law to simply move over to journalism and cover the same asset class there? Henry Blodget certainly thinks so: the former technology analyst is now publishing earnings estimates on his website despite being barred from ever doing exactly that for the securities industry.

At the very least, one would hope that any such journalism would come with extensive disclosures and disclaimers. Blodget was happy to do that when he was writing for Slate, but there’s nothing that detailed at the Business Insider. Instead, his bio there goes into no real detail at all about his fines and banishments:

From 1994-2001, Henry worked on Wall Street at Prudential Securities, Oppenheimer & Co., and Merrill Lynch. He ran Merrill’s global Internet research practice and was ranked the No. 1 Internet and eCommerce analyst on Wall Street by Institutional Investor and Greenwich Associates. He was later keelhauled by then-Attorney General Eliot Spitzer over conflicts of interest between research and banking.

At Bloomberg, there was no disclosure at all of Whitney’s past. Whitney, a freelancer, was fired by Bloomberg yesterday, along with other freelancers on the TV side. Bloomberg’s spokeswoman, Judith Czelusniak, refused to answer questions about whether Bloomberg freelancers are held to the same standards as full-time employees, whether it is acceptable for journalists to have run into this kind of trouble with regulators, and whether or not the discovery of Whitney’s past was the reason for his dismissal.

My feeling is that there are enough highly-qualified journalists looking for work out there that it’s not necessary to bring into the journalism industry people who have been dishonorably kicked out of the securities industry. But if you are going to do that, at least be open about it.

Update: Of course none of this is as bad as Thom Calandra’s bio where he’s plugging his latest investment newsletter:

Thom co-founded and was the editorial spirit of CBS MarketWatch, MarketWatch.com and FT MarketWatch in Europe.

As the voice of Thom Calandra’s StockWatch and The Calandra Report, Thom fancied $300-ounce gold before that metal became an investment rage.

Not mentioned at all is the fact that he was fined $540,000 by the SEC for pumping-and-dumping illiquid stocks while atThe Calandra Report. But I don’t really consider investment newsletters to be journalism in the first place.

(Thanks Otto)

Update 2: Henry replies, and I reply back.

20 comments

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Kicked out of the biz? Like ZeroHedge you mean?

Posted by CheesySleazy | Report as abusive

I love Otto (in a platonic way, of course), but the very fact that proven financial criminal Henry Blodget writes for a nationally visible financial publication, and the only guy who sees fit to question why is a cantankerous, anonymous Canadian blogger located somewhere in South America, is perhaps the most apt comment on the utter lack of ethical standards in our elites since Jack Grubman’s kid got into the 92d Street Y on the back of a doctored analyst report.But everyone should read Otto. Daily. It’s your only glimpse into what people really expected of our elites in 1975.

Posted by Dollared | Report as abusive

“…charged with false reporting” (!) You think that would be a barrier to entry right there. I don’t think anybody kicked these people into journalism. They just sort of oozed their way in. Nice job Felix.

“proven financial criminal Henry Blodget”Um…what? He settled, and according to our legal code, that means he was not proven to be a criminal. By settling, he neither confirms or denies, and no judgements are made.A sullied past, sure. A criminal, maybe–but certainly not proven to be.

Posted by Hah | Report as abusive

Henry has become a good guy. He’s smart, knows a lot, writes well and created his current outlet. He has also extensively disclosed his past. As far as I know, he was never convicted, was never successfully sued and the fund the SEC set up to pay his “victims” never found any victims to pay.What’s your complaint exactly? That he’s competing with you for readers?I’m normally a big fan of yours, but your post is unworthy.

Posted by foosion | Report as abusive

Hard to avoid the conclusion that you’re just being petulant, Felix, at least when it comes to Blodget. From what I can see, he has been at pains to disclose and explain his whole sordid-ish past ever since he began his reemergence into the media world. The Slate piece he did a few years back was brutal, complete, and damned impressive. He — more than most in this business — appears to have learned from his mistakes. He’s certainly willing to own them, over and over, in response to stuff like this.

Posted by John Rosevear | Report as abusive

Sorry you are inferior to Henry.

Posted by Blodget Fan | Report as abusive

Slow news day? Tired of picking fights with Zero Hedge and then having ZH scoop every major financial story of the past year? Ben Stein not cutting it any more? Need a new target to rag on since you’re too lazy to get out and report? Still too cowardly to apply the same principles to The Economist as you demand from ZH? What’s the matter, Felix? You can tell us.

Posted by Jewel | Report as abusive

Stop whining. This is America for Crissakes.

Posted by zipupthelip | Report as abusive

Blodget has divulged and divulged and divulged his past. Most of us who read him are tired of hearing about it.”My feeling is that there are enough highly-qualified journalists looking for work out there that it’s not necessary to bring into the journalism industry people who have been dishonorably kicked out of the securities industry.”Who cares? If you want to create work for highly-qualified journalists you are free to start a company and hire them at will. As Blodget did.This post demeans you.

Posted by Gene | Report as abusive

Felix please

Posted by DDD | Report as abusive

Get over yourself…or at least get over sounding like a whiny, jealous little boy.

Dude, you have a promising future as a lackey writing for Patrick Byrne!Hater.

Posted by larry | Report as abusive

Get over yourself….or at least get over sounding like a whiny, jealous little boy.

Pretty weak, I guess people should have no financial background like yourself. Loser.

Posted by Rick | Report as abusive

bawwwww…everyone knows blodget is a kinda sleazy, but that is why WE LOVE HIM

Posted by too bad for you | Report as abusive

Hmmm, someone aligned with a lame stream media outlet with the shabby reputation that Reuters has shouldn’t be whining about someone else’s supposed flaws…

Posted by juandos | Report as abusive

Sorry Felix – you are wrong on this. Blodget only proves what an arbitrary and capricious justice system we have (how many rapists have been proven innocent by DNA testing?). Blodget did what everybody in a capitalistic (strike that – any system) does – shill for sh*tty products.If we really want to protect people, every product, every website, and every politician should come with this caveat: We don’t know what is gonna happen in the future. The products, or policies, or whatever it is we are selling is no better than anybody else’s, and may be much, much worse.Once you know that, you won’t get suckered.

Posted by fresno dan | Report as abusive

Need a new target to rag on since you’re too lazy to get out and report? Still too cowardly to apply the same principles to The Economist as you demand from ZH? What’s the matter, Felix? You can tell us.

Posted by jacobneo | Report as abusive

Canadian blogger located somewhere in South America, is perhaps the most apt comment on the utter lack of ethical standards in our elites since Jack Grubman’s kid got into the 92d Street Y on the back of a doctored analyst report.
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Posted by jacobneo | Report as abusive