TheStreet.com, Cramer Get Subpoenas in Gradient Probe

Updated from 6:01 p.m. EST

A regulatory investigation into allegations of collusion between short-sellers and a stock-research firm has led to the serving of subpoenas on TheStreet.com(TSCM) and its co-founder and major shareholder, James J. Cramer.

Both TheStreet.com, which publishes this Web site, and Cramer, who writes a column on its RealMoney subscription site, have objected to the government's demands for communications between journalists and their sources.

The subpoenas are related to a Securities and Exchange Commission investigation into allegations that Gradient Analytics, an Arizona stock-research firm, published bearish research reports at the behest of a group of short-sellers, including Rocker Partners, a minority owner of TheStreet.com.

TheStreet.com is the second news organization to acknowledge receiving subpoenas in the investigation. Last Friday, Dow Jones(DJ) confirmed that two of its reporters had received SEC subpoenas. The actions sparked controversy, and on Monday, SEC Chairman Christopher Cox sought to distance himself from the unusual investigative move.

Cramer, meanwhile, disclosed the subpoena on his "Mad Money'' television show on CNBC Monday night. Through its general counsel, Jordan Goldstein, TheStreet.com disclosed that it, too, received an SEC subpoena. A spokesman for CNBC said the network did not receive a subpoena.

Goldstein said TheStreet.com won't comply with parts of the subpoena that demand communications between journalists and sources.

SEC spokesman John Nester declined to comment on the subpoenas, noting the commission doesn't "discuss individual enforcement matters.''

Still, it's possible the issue could be moot. The SEC has indicated it has no intention of enforcing the subpoenas at this time. On Friday, the SEC began to back away from the subpoenas, after lawyers for Dow Jones said they would not comply with them. The SEC subpoenas to the Dow Jones employees had a Friday compliance date.

SEC Chairman Cox, on Monday, took the unusual step of rebuking the SEC's staff attorneys for filing subpoenas on two Dow Jones reporters without first consulting him or the other top commissioners. Cox issued a statement saying neither he nor any of the SEC's four other commissioners were aware of the subpoenas, which he called "highly unusual.''