Tax Guru-Ker$tetter Letter

Monday, July 28, 2003

CNBC Disclosure Stirs Ethics Debate in Business Media

It's always been a dilemma in regard to financial writers who tout certain stocks. While many media companies have rules forbidding their writers from covering stocks that they personally own, if it's such a good investment, it does give one pause if that person doesn't put his/her own money where his/her mouth is. On the other hand, there is also the concern that the writers are using their clout to stimulate buyers to run up the prices so they can be unloaded; pump & dump. I don't have a preference for either; but I think it is a god idea to have writers disclose their personal ownership.

I always get a big kick out of the hot stock tips that come via email. They imply that the analysis is objective, yet the fine print at the end often says that the writer was given several thousand dollars or several thousand shares of the stock for sending out the emails. I always wonder how many people are stupid enough to actually buy those shares regardless of the obvious blatant conflicts of interest.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 7/28/2003 07:54:00 PM Send this post: