How The FBI Raid of NYGG Made the News
(Originally published on January 27, 2012, to CBK email newsletter list.)
The story about the press’s reporting of the FBI raid of NYGG’s offices is as fascinating and alarming as the story itself.
It seems the news of the raid was first reported on a blog called The Financial Investigator, penned by Roddy Boyd. So kudos to him. That said, his only source was an unnamed employee of NYGG, who he identifies vaguely as a company “official”. Again, bravo for having that inside source. However, Boyd did not even make an effort to confirm the raid with the FBI itself. This is inexplicable for a seasoned journalist. It is easy to find the names of the press team at the New York FBI offices through a quick search. Their names and phone numbers are listed prominently on the “Press Room” page of their web site.
Boyd went on to write that the NYGG “official” indicated that,
1) Wey’s apartment had also been raided;
2) that no charges have been filed;
3) “it was not clear what NYGG transactions were of interest to the FBI.”
Boyd’s next line is even more confounding, given he had just “sourced” a NYGG “official” to support all the information he had on the situation: “Attempts to contact NYGG and Wey were unsuccessful;…”
Keep in mind that the FBI had not released any information to the public about executing a search warrant for the offices of NYGG. Unless Boyd was at NYGG’s Wall Street offices Wednesday and saw the FBI enter, he was only relying on a NYGG “official” who clearly is “giving up” his own company, so what does that say about the source’s motives? Boyd could have called the FBI and asked if they had executed a warrant there. According to Flannelly, they would have absolutely confirmed that, but not given more information than that it had, indeed, happened.
So, what if the obviously disgruntled NYGG “official” was using Boyd as a tool? In this day and age no amount of press ***CORRECTIONS*** could mitigate the damage Boyd and the press citing his blog could achieve in a few hours on the Internet. Bad news on the Internet mimics the Cambrian Explosion. Then who would be getting investigated?
Here’s how the news unfolded (best as we can ascertain):
The Epoch Times picked up the story, citing Boyd. It’s hard to imagine reporters read Boyd’s blog daily (he does not even post daily) so it’s likely there is personal connection there and he “gave” them the story. Good for them; good press for Boyd.
They did not just repeat his post. They took the proper steps to confirm the raid had indeed taken place, naming the FBI spokesperson they contacted. Bloomberg jumped on the news a bit later and also mentioned the FBI had confirmed the story, but did not source the FBI spokesperson’s name. It leaves one thinking that they did not take the time to confirm themselves, as that would be standard practice, even if they read it somewhere else. A “spokesperson” for the FBI is not going to demand anonymity, nor would it be warranted here.
John Carney, who writes a blog called “NetNet” under the colorful peacock umbrella of CNBC.com did a hatchet job covering the story, regurgitating Boyd’s post and then lifting five paragraphs (300 words!) of a story a Bloomberg reporter wrote on Wey in Jan. 2011. In the world of video reporting that would be tantamount to ABC running footage of a CBS news story, as part of its own story. And this during a week where the issue of “copyright” was top of the news, with discussions of “SOPA” and endless stories about the Megaupload arrests.
Later in the evening of January 26, Reuters distributed a short piece with the news, citing the same FBI spokesperson as The Epoch Times and crediting The Epoch Times as the news source which broke the news, only mentioning The Financial Investigator as the blog EP “cited.” OUCH! I guess Reuters does not consider Boyd’s blog a news source.
About Boyd
Boyd is a financial journalist and author with solid credentials, a fact he under reports on his blog, which is curious as one would think he would want to rest on the laurels and differentiate himself from hobbyist bloggers and, in the case of the China-sector, the short seller/research firms. At first read, given his snarky tone, righteousness, and seemingly hostile attitude to “all companies Chinese” one might assume he is part of that pack. But he claims he does not trade stock in any of the companies he covers and does not dole out “tips” about what he plans to write about to investors.
He started his blog in July 2010 and seems to write sporadically on a wide swath of topics to do with malfeasance on Wall Street. It is interesting, though, how many of his random entries are about Chinese companies trading on the U.S. markets. It seems disproportionate given the limited number of his posts and respect to the probable universe–dollar-wise–of malfeasance on Wall Street. He has written about Benjamin Wey several times and covered the companies the short -sellers have already put through the meat grinder, CCME, HRBN, SPU, RINO and a few others.
He wrote a book about AIG’s collapse, but if you put “AIG” in the search box on his blog it brings up nine posts, only two of which have “AIG” in the title. One search results brings up a story about Kingtone Wireless and another one about Harbin Electric, which makes no sense at all. He does have ONE post on Lehman’s Dick Fuld, questioning the status of his Finra license (great idea). But if you search MF Global or John Corzine “no results are found”. If you search “Madoff” two posts come up, one is the Harbin Electric post cited already and another seems to be a long post about a company called SpongTech.
All to ask, why with all this talent, experience and connections, is Boyd so focused on the China markets and seemingly adding to a dialogue which already exists, instead of focusing on the BIG DOGS, who hold billions of dollars of pension fund monies for U.S. workers and whose ticker symbols make-up the portfolios of the majority of U.S. independent investors, most of whom hold no China stocks at all?
—Janet Stites, Publisher & Editor, CBK
