Payola and a little pump ‘n’ dump
Two nasty instances of media gone wrong. First The New York Times has a story about a former columnist for CBS MarketWatch.com who was forced to pay a fine for acting like a character in Boiler Room:
Thom Calandra, a former columnist for CBS MarketWatch.com,
will pay more than $540,000 to settle federal regulators’ charges that
he used an investment newsletter to pump up the price of penny stocks
he owned before selling them.
In a complaint filed yesterday, the Securities and Exchange Commission
accused Mr. Calandra of using The Calandra Report, an Internet
investment newsletter, to promote the thinly traded stocks of 23
companies, without disclosing that he owned them, and then went on to
sell them for a gain of more than $405,000. Mr. Calandra also failed to
tell his readers that he received heavily discounted shares in two
mining companies when he recommended them in the newsletter before
selling them for a large profit, the complaint said.
And, of course, the now broadly reported tale of Armstrong Williams, a syndicated columnist and pundit who took money from the US government to promote the No Child Left Behind education bill on air and in his writing. In case you missed it, try this, this and perhaps a little bit of this.
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