Wednesday, February 03, 2010

New Odd Couple Form Fraud Exposure Team

FORMER CON-ARTIST AND REPORTER TEAM UP
A big tip of the old hat to Kevin Roderick over at the LAObserved blog who announced, HERE, the most recent venture of former con artist
Barry Minkow and an unexpectedly familiar local name - William Lobdell.


SITE FORMED TO U
NCOVER AND REPORT FRAUD
It seems Lobdell -
most recently the co-publisher with Daily Pilot former publisher Tom Johnson of the Newport Mesa Daily Voice - has joined Minkow to form iBusiness Reporting, an "online news operation to report on business corruption and fraud". iBusiness Reporting will be a unit of Minkow's Fraud Discovery Institute which, according to information on the web site, is responsible for uncovering and stopping an estimated $1.8 billion in financial fraud.

PROFITING FROM THEIR SUBJECT'S DISCLOSURE
The fascinating aspect of this venture is that it will be funded in part by short selling of stock of companies they investigate!
That is, they buy stock in a company, investigate it for fraud and report their findings on the web site - and elsewhere, I assume - then profit when the stock tanks as a result. CORRECTION! Bill Lobdell emailed me early this morning to tell me that the Fraud Discovery Institute "FIRST thoroughly investigates a company and, if it finds the business model fraudulent or problematic, it may short the stock." If an investigation uncovers nothing there is no stock purchase. I encourage you to visit the web site for a more detailed explanation of this plan.

LIKE A HITMAN AND LIFE INSURANCE

This seems a little like a
hit man taking out a life insurance policy on his target, then pulling the trigger...

LOBDELL IS LOCAL PRODUCT
Most of you know of Bill Lobdell, who most recently has been touring the country promoting his best-selling book, "Losing My Religion: How I lost My Faith Reporting on Religion in America - and Found Unexpected Peace". Before that he was a religion reporter for the Los Angeles Times and the Editor of the Daily Pilot.


IS THIS KOSHER
?
I admit to being a neophyte in the world of stock manipulation, but my first reading of their web sit
e makes me just a little nervous, despite their disclaimers. Again, visit the site and read it for yourself.

WHAT ABOUT THE DAILY VOICE?

One thing I found very curious was that nowhere in his bio on the site does Lobdell mention his tour as co-publisher of the Daily Voice. Even though he has juggled many balls simultaneously in the past, I wonder if he has terminated his relationship with Tom Johnson and what that means for the future of the Daily Voice. It now faces even more competition locally with the recent launch of two new sites, O.C. NOW and OCLNN, both linked on this page, which are closely affiliated with the Daily Pilot. UPDATE: The Daily Voice addressed Lobdell's reduced role HERE today.

KEEPING MY FINGERS CROSSED FOR LOBDELL

It's going to be very interesting to see how this new venture (I keep wanting to call it a scheme) evolves. I wish Bill Lobdell well in this new venture.





BARRY MINKOW ON 60 MINUTES

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4 Comments:

Anonymous Gary Craig said...

All of this seems perfectly legal, but ethically...

Can you be considered a journalist and a reporter if you have a less than independent relationship with the companies you investigate?

At the point which you take out a short on the stock, you are a stakeholder and no longer independent.

Reminds me of Glen Beck and his relationship to the gold investment companies that advertise on his show.

2/04/2010 11:19:00 AM  
Anonymous Are you serious? said...

Stranger than fiction...

2/05/2010 10:37:00 AM  
Anonymous Byron de Arakal said...

Apart from my - shall we say, surprise - that Bill has taken this path, I think Gary Craig's take nails it. And the answer to his question is: NO!

This isn't journalism as I was taught it by the best in the business (the late Gary Granville). There is no journalistic virtue or ethic in exposing fradulant companies in which you hold a short position. It's sort of like purchasing sex as a means to publicly expose prostitutes. Either be a journalist or be an investor. But you cannot be the latter and credibly claim to be the former.

2/05/2010 09:03:00 PM  
Anonymous Joe McGrath said...

You asked, "Is this kosher?" I ask, "Are you kidding?" This is extortion and you are going easy on Lobdell.

2/08/2010 03:43:00 PM  

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