By: E&P Staff U.S. Securities and Exchange Commission (SEC) Chairman Christopher Cox says he didn't know the agency had subpoenaed two Dow Jones & Co. columnists -- and he's making it plain that he doesn't like the idea at all.
Following the weekend reports that the SEC on Feb. 7 issued subpoenas to MarketWatch.com columnist Herb Greenberg and Dow Jones Newswires columnist Carol S. Redmond, Cox put out a statement Monday halting the proceedings until the full commission could take a look at the issues involved.
This is the text of Cox's statement: "The issuance of a subpoena to a journalist which seeks to compel production of his or her notes and records of conversations with sources is highly unusual. Until the appearance of media reports this weekend, neither the Chairman of the SEC, the General Counsel, the Office of Public Affairs, nor any Commissioner was apprised of or consulted in connection with a decision to take such an extraordinary step. The sensitive issues that such a subpoena raises are of sufficient importance that they should, and will be, considered and decided by the Commission before this matter proceeds further."
In an interview published in Tuesday's Wall Street Journal, Cox was at pains to emphasize the SEC did not want to "chill" the flow of financial information to the public through the news media.
"Our regulatory mission in major part requires us to ensure all material information is divulged in the first instance," Cox told the Journal, in an article by Kara Scannell. "Unless it is publicized, unless it is broadly shared and analyzed by the public, markets cannot function. We don't want to do anything, therefore, to chill that activity."
The Journal said the subpoena to Greenberg and Redmond sought e-mails, phone records, and other documents provided to the journalists by Gradient Analytics Inc., a Scottsdale, Ariz.-based market research firm, and Rocker Partners LP, a hedge fund in Millburn, N.J. The SEC is investigating potential market manipulation, the Journal said, including charges by Overstock.com that Gradient and Rocker, which specializes in short-selling, were part of an effort to depress its stock price. Both firms have denied wrongdoing, the Journal reported.
Last Friday, the SEC told Dow Jones, which had balked at turning over the material, that it would not enforce the subpoena.
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