SAC's Heavy Hand Prompts Thomson Reuters to Join the Journalistic Capture Hall of Shame
Regular readers of Zero Hedge will be keenly aware of our animosity for, if not the mainstream media, the malaise that has gripped the mainstream media's ethos (and a massive swelling of its increasingly corrupt pathos, as it happens). Our expressions of disgust go back months, even as far back as the birth of Zero Hedge itself. So, today, when we recognize new manifestations of these illnesses, we are far past the point of outrage. Our reaction might be better described as a slow, mournful shake of the head indicative of an almost bored (and certainly unsurprised) resignation. The decline of journalism (and the resultant and pending takeover of yet another broken business model by the Federal Government) is a common theme here at Zero Hedge because it is so common a theme. This morning it is Reuters that prompts our sad response.
Almost torn from the "through blue-tinted glasses" frames of "The Insider," Michael Mann's 1999 retelling of the 60 Minutes "Big Tobacco" story scandal (for the uninitiated, a pending sale of CBS to Westinghouse apparently prompted Don Hewitt and CBS lawyers to initially kill a 60 Minutes story highlighting a Brown & Williamson whistle-blower for fear of a deal-killing lawsuit by Brown & Williamson) the Carolina Business News Initiative's "Talking Biz News" blog (hereinafter "TBN") describes how Thomson "The World's Leading Source of Intelligent Information for Businesses and Professionals" Reuters killed Matthew Goldstein's piece on SAC's Steven Cohen. Says TBN:
Reuters editors last week killed a story by investigative reporter Matthew Goldstein about hedge fund trader Steven Cohen after Cohen complained to top Thomson Reuters executives that he was being persecuted by the news agency’s reporting, sources at Reuters said.
Goldstein’s story was an “incremental” advance in the reports swirling around Cohen that he engaged in insider trader [sic] during the 1980s, Reuters sources said. There have been reports that Cohen is next in the sights of the SEC following the Galleon case, which featured SEC wiretapping the conversations of hedge fund manager Raj Rajaratnam.
Zero Hedge has, of course, been sniffing around this story for months. But then, the CEO of our parent company's marketing division doesn't get calls from senior SAC executives. (Probably because we don't have a parent company). We are also quite sure that 60,000+ shares of Thomson Reuters held by SAC according to that firm's September 2009 SC13F-HR filing (up from ~42,000 shares in June of 2009 and up from 0 shares in March of 2009) is too small an amount to influence the likes of Devin Wenig. Just for the record, Zero Hedge has never owned even a single share of Thomson Reuters.
In 1995 When CBS killed the 60 Minutes story, and though 60 Minutes was later permitted to air modified and then finally a full version of the piece, the Editorial page of the New York Times issued the anonymous and scathing journalistic rebuke that: "The traditions of Edward R. Murrow and '60 Minutes' itself were diluted in the process." One wonders what the New York Times would make of Reuters' antics today Probably nothing. When Mann directed "The Insider" it was a shocking tale. Today journalistic perversion is a common bit of boring trivia. One ought instead to wonder what the New York Times of 1995 would make of Reuters' antics today, but that institution has been dead a long time. We defy you to try to imagine today's New York Times printing anything even remotely resembling this:
This act of self-censorship by the country's most powerful and aggressive television news program sends a chilling message to journalists investigating industry practices everywhere.
The 60 Minutes producer that championed the Brown & Williamson piece eventually left CBS over the incident. (Lowell Bergman joined what may be the last real haven for investigative journalism on television, PBS' Frontline). Perhaps more alarming for this particular story, Reuters does not even have lawyers fretting over a pending sale and a large lawsuit to fall back on:
Goldstein’s story was based on documents, and was approved by Reuters lawyers. After Goldstein contacted Cohen for the pro forma no comment before the story ran, Cohen repeatedly called Devin Wenig, CEO of the Thomson Reuters Markets Division and the No. 2 executive at Thomson Reuters, to complain about the story.
Wenig passed on the complaints to Reuters Editor in Chief David Schlesinger, who asked editors to look into them. Reuters editors debated the story for three days before finally killing it.
The decisions would appear to be totally editorial. This is, of course, beyond disgusting- but, in keeping with the theme we introduced at the beginning of this article, also totally unsurprising.
If the closing years of this decade are ever given a one-word theme it might well be "capture." The capture of regulators by financial institutions, the capture of financial institutions by the Treasury, the capture of the FDIC by the Fed, the capture of the Fed by the White House and the capture of the fourth estate (which this publication hereinafter refuses to capitalize) by the entity with the most "access" to sell this month. Apparently, for Reuters, that's SAC.
We seriously doubt that you will ever read the killed Reuter's piece anywhere. But, then, that is what Zero Hedge is for.