There were many stinging editorials in the wake of the SEC's San Francisco office issuing subpoenas to several journalists regarding allegations that they participated in a short selling scheme on shares of struggling on-line retailer, Overstock.com. Here's just one sample from Loren Steffy at the Houston Chronicle that takes aim at SEC Chair Chris Cox:

Corporate reform dead; SEC chief should resign

By LOREN STEFFY
Houston Chronicle
February 28, 2006

Corporate governance reform is dead. Its last gasp was stifled by the subpoenas issued last month by the Securities and Exchange Commission against several news organizations and writers.

Last week, Marketwatch.com columnist Herb Greenberg and Dow Jones Newswires columnist Carol Remond acknowledged receiving the subpoenas, which involved stories about Internet retailer Overstock
.com.

Late Monday, the financial Web site TheStreet.com said it and columnist Jim Cramer, who also hosts the wacko stock-picking show Mad Money on CNBC, also were subpoenaed.

The SEC's investigation apparently involves claims that short-sellers conspired with the media to drive down Overstock's price. It's worth noting that Overstock's chief executive, Patrick Byrne, is far from the voice of clarity and reason. He has, for example, claimed in a public conference call that Wall Street is controlled by a mysterious "Sith Lord." That's right, as in Star Wars.

After a blistering column in the New York Times by Joe Nocera over the weekend, SEC Chairman Christopher Cox offered a scathing rebuke of his agency's enforcement staff.

"Until the 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," Cox said in a prepared statement issued Monday.

It's tempting to cast Cox as another bad manager, too detached to know what his subordinates were doing, or too spineless to take the blame.

Or he could be something worse: a political hack masquerading as a market watchdog...

Ouch. Read the rest here.

-- MDT

Labels: Patrick Byrne