SEC Backs Off Subpoena Request
Avoiding a potential 1st Amendment tiff, securities regulators backed away Friday from their demand that a financial journalist produce emails and other confidential materials connected to his reporting, a spokeswoman for Dow Jones & Co. said.
Herb Greenberg, who writes for Dow Jones’ MarketWatch website, disclosed in a commentary Friday that the Securities and Exchange Commission had subpoenaed his unpublished communications in connection with the agency’s investigation into Gradient Analytics.
Gradient is a Scottsdale, Ariz.-based research firm. Online retailer Overstock.com has accused Gradient and others of conspiring to manipulate its stock price.
“And to think I was foolish enough to believe I lived in America and there were these things called the 1st Amendment and freedom of the press,” Greenberg wrote in his column. “If my unpublished communications aren’t safe from government eyes, then the tools of every business reporter in this country become fair game for any company that doesn’t like scrutiny.”
Dow Jones said late Friday that the SEC had eased off its request, at least for now.
“We were served with the subpoenas and we have served objections in response,” said spokeswoman Amy Wolfcale. “It’s our understanding that the SEC has decided not to seek production of any documents from Dow Jones at this time.”
SEC officials declined Friday to discuss the specifics of the case. Spokesman John Nester said that any subpoena to a journalist would be rare, but not unprecedented.
“Under long-standing practice, the SEC generally subpoenas journalists only when it’s absolutely necessary, and after careful thought and consideration,” Nester said.
The Salt Lake Tribune reported last year that the SEC was investigating Gradient Analytics over charges that it conspired with a hedge fund to push down the stock price of Overstock.com.
Gradient executives declined to comment, and Greenberg said he could not comment beyond his column.
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Peterson reported from Washington and Kristof from Los Angeles.
