TheStreet.com, Cramer Get Subpoenas in Gradient Probe
Cox said that given the "sensitive issues'' raised by serving a subpoena on a journalist, no further action will occur in the matter without the prior consideration of the SEC's five commissioners.
Goldstein said the SEC's behavior with TheStreet.com is consistent with its treatment of Dow Jones.
"The SEC staff has indicated that they will not seek to compel production of communications between our journalists and their sources at the present time," Goldstein said. "They could come back in the future, however."
People close to the SEC say several of the commission's top enforcement attorneys were aware the San Francisco office had served subpoenas on journalists.The SEC subpoenas to the Dow Jones reporters became public on Friday when one of the journalists, MarketWatch's Herb Greenberg, wrote a column about the incident. The other reporter who received a subpoena is Carol Remond, a writer for the Dow Jones Newswires. Greenberg was a columnist with TheStreet.com from 1998 to 2004. Both Greenberg and Remond have written critical stories about Overstock (OSTK) and the online discounter's controversial founder and CEO, Patrick Byrne. Last summer, Overstock filed a lawsuit alleging a wide-ranging conspiracy to manipulate the Internet company's stock. The lawsuit alleges that Gradient published critical reports about Overstock's financial situation so short-sellers, or traders who bet a stock will decline in price, could profit. Byrne's campaign against Gradient and short-sellers has taken some bizarre turns. In a conference call last August, the executive said the conspiracy against his company was being orchestrated by an unnamed mastermind he called the "Sith Lord," in a reference to a character from the Star Wars movies. One hedge fund that is singled out in the Overstock lawsuit is Rocker Partners, led by David Rocker. The hedge fund and Gradient have denied the allegations. Speaking on "Mad Money," Cramer questioned the motive behind his subpoena. "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." He said Overstock's lawsuit was a campaign of obfuscation. "You're losing money hand-over-fist, nobody respects you anymore, and what you do is go to an office of the federal government and say, 'I want the names of all the people who are writing negative stories -- I want them subpoenaed," Cramer said. "And they do it."
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