CNBC’s ‘Mad Money’ Host Was Subpoenaed by SEC
A second financial news organization was subpoenaed for records in an investigation by the Securities and Exchange Commission, whose chairman has put the subpoenas on hold amid controversy.
TheStreet.com and co-founder and major shareholder Jim Cramer were served subpoenas by the SEC about three weeks ago in connection with an inquiry into allegations of stock manipulation. Two columnists for Dow Jones & Co. online publications, Herb Greenberg of MarketWatch and Carol Remond of Dow Jones Newswires, also received subpoenas in the SEC investigation related to online retailer Overstock.com Inc.
Jordan Goldstein, general counsel of New York-based TheStreet.com, said Tuesday in a telephone interview that the company had objected to the subpoenas dated Feb. 6 demanding records of communications. He declined to comment further.
SEC spokesman John Nester declined to comment.
Dow Jones, which also publishes the Wall Street Journal, also had objected to the SEC subpoenas.
SEC Chairman Christopher Cox took the unusual step Monday of halting the agency’s pursuit of the subpoenas until its five commissioners consider the matter, possibly on Thursday.
Cox suggested that SEC enforcement attorneys should have consulted him before issuing the subpoenas because of the sensitivity of ordering journalists to hand over records.
The SEC rarely subpoenas journalists or news organizations.
“This is unusual. I don’t think I’ve ever seen a subpoena pulled back before” by the SEC, said James Cox, a professor at Duke University who specializes in securities law. The move “creates some level of tension” between the agency’s enforcement attorneys and Cox’s office, he said.
Cramer, who writes a column for TheStreet.com and is the colorful and hyperactive host of the “Mad Money” show on cable TV network CNBC, disclosed on the program Monday night that he had been subpoenaed.
The SEC took the action because “I said the stock was going lower,” Cramer said, referring to shares of Overstock.com.
“I didn’t get the subpoena because I’m corrupt,” he said.
“I got it because I tried to get people out of a stock that we said was going lower and went lower.”
Similarly, Greenberg and Remond have written columns that were critical of Overstock.com and its chief executive, Patrick Byrne.
The retailer has accused research firm Gradient Analytics of issuing negative reports on it in exchange for payments from a hedge fund seeking to profit from a drop in its stock price.
Overstock has sued Gradient and the hedge fund, Rocker Partners. They have denied wrongdoing.
After issuing the subpoenas early last month, the SEC decided last week against compelling the journalists, at least for now, to surrender telephone records, e-mails and other documents that the agency was seeking in its investigation.
Shares of TheStreet.com fell 16 cents Tuesday to $7.76.