SAN FRANCISCO -- A story here detailing the

controversial practices of Brian Finnerty, C.E. Unterberg Towbin's head trader, has not reduced his appeal to financial television programmers. Finnerty has made multiple national TV appearances in the past week, and discussed stocks in which his employer has a financial interest -- without disclosing the fact.

Furthermore, the trader steadfastly denied any wrongdoing in an interview today.

"What else would I talk about other than what my firm researches and does banking for? That's what I know," Finnerty said. "A baseball player isn't going to talk about football. I talk about what I do for a living."

Regarding the (lack of) on-air disclosure, Finnerty said: "Anytime I'm asked 'does your firm have a

conflict of interest,' I've always answered the question -- dozens of times."

If the question isn't asked by a television broadcaster, the trader said he would make disclosures "if I think of it" and if time allows.

This raises again the question of who is responsible for making sure such disclosures are aired -- the guest of a news program or its hosts.

"Our position is it's his responsibility to disclose; when he accepts

an invitation to appear on air, he takes on that responsibility," said Bruno Cohen, executive vice president of business news at


. "We are not police

and not a regulatory agency."

It seems Finnerty is putting the onus on the networks and the networks are putting the onus on him. Maybe that explains why the answer to the "who's responsible?" question is often "no one."

Oops ... He Did it Again

Neither the trader, nor his employer, contacted me after the story last week. But I called today following his appearance on


"Market Watch," during which Finnerty mentioned




C.E. Unterberg Towbin has done underwriting for Zoran and makes a market in the stock. Moreover, Zoran was the largest holding of C.E. Unterberg Towbin Advisors at the end of the first quarter, according to On March 31, C.E. Unterberg Towbin Advisors, the broker/dealer's investment advisor affiliate, owned 350,000 shares of Zoran.

None of that information was disclosed to


viewers -- nor did interviewer Tyler Mathisen ask if any conflict existed.

Incredibly, Finnerty said "that is the first I've heard of that," when informed of CEUT Advisors' stake in Zoran. He claimed to have been similarly surprised to find out about the firm's stake in

New Focus


when the



article ran last week.

"We do have a Chinese Wall. I have no idea what their holdings are," he said. "That is done on purpose. You can write or say what you want; that's the first I ever knew my firm owned one share of Zoran."

Whether one believes that or not, it should be noted that Finnerty did not overtly recommend that viewers purchase the stock.

Mentioning a stock in a favorable light in a public forum, without explicitly recommending it, falls into a "gray area" of securities law. It would be unlikely to draw interest from

Securities and Exchange Commission

prosecutors, unless there is proof of a scheme to defraud investors or that someone is trading on insider information, said Robert Sobol, an attorney with Montgomery McCracken Walker & Rhoads in Philadelphia.

In a discussion of why tech stocks were faring better early Thursday, Finnerty mentioned Zoran as one of several companies that made positive comments in their conference calls Wednesday evening. Others he mentioned were

Applied Micro Circuits



Alpha Industries


; C.E. Unterberg Towbin makes a market in both stocks, which -- again -- was not disclosed.

Several observers question whether market-making deserves the same kind of disclosure as underwriting relationships, which are more lucrative.

But, if a television appearance generates increased trading activity in a stock, firms that make a market in it receive that much more in transaction fees. Zoran rose 19% today on 2.5 million shares vs. its average daily volume of 438,818. (Currently, there are 26 active market makers in Zoran vs. more than 80 for a mega-cap such as


(MSFT) - Get Report


To be fair, Zoran was rising strongly before Finnerty's appearance about 10:45 a.m. EDT and continued to rally thereafter. Last night, the developer of digital video and audio compression/decompression semiconductors reported a second-quarter loss of 62 cents a share vs. 26 cents a year ago. But the loss was a penny less than analysts expected, and the company forecast its third-quarter earnings would exceed expectations.

Hear No Evil

It's possible Finnerty really didn't know about his employer's stake in Zoran. And maybe he really felt that stocks such as Zoran and Alpha Industries, which have a combined

market cap of less than $2 billion, held sway over the market today, instead of, say,


(IBM) - Get Report



(NOK) - Get Report


Still, investors should know that Finnerty really doesn't think he's doing anything wrong by publicly talking about stocks in which his employer has a financial interest. "I can only talk about things my firm knows," he said repeatedly in our interview.

Giving him the benefit of the doubt, it could be argued that Finnerty is simply doing what those on Wall Street have long done. It's surprising -- given all the focus on disclosure these days -- but he seemed more amused by my inquiries than concerned, calling the

first story both "silly" and "a joke."

Unless the

National Association of Securities Dealers


Rule 2210, guys like Finnerty may, indeed, get the last laugh. The resolution, currently open to comment, would require "analysts and other brokerage employees to disclose potential conflicts of interest when they recommend a security during a television interview or other public appearance."

The rule was created with sell-side analysts in mind, but was extended to all brokerage employees because "it should make no difference what your title is -- if you're making a recommendation, you should be subject to disclosure requirements," said Tom Selman, a senior vice president at the NASD.

To date, however, no television broadcaster has asked Finnerty about the disclosure concerns raised here, possibly because they're too harried and too concerned about filling airtime to actively police what's aired.

Cohen noted



disclosure guidelines and said the network has been "more obtrusive" about asking for disclosures on air as the issue has heated up in the past year.

But "the dynamics of a live news broadcast" often prohibit the network from being "as didactic or clinical" as firms are by including boilerplate disclosure information in analysts' reports, he conceded.

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.