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Ron Delnevo's Blog
Ron Delnevo's Blog
Blogs » Ron Delnevo's Blog

The Wall Street Journal - How It Can Save Its Reputation.

Almost three years ago, I was having what I will just call a disagreement with someone in the United States.  As the disagreement ran its course, I heard that the other party involved wasn't worried about any damage the dispute might do them in the US.

Then an article mentioning me appeared in the Wall Street Journal.

Actually, the article wasn't just about me.  Half a dozen senior executives, working for various companies, had their names raised in the same piece.

What was the article about?  Well, in reality, it was about the Wall Street Journal's pet hate: Senior Executives' Share Sale Plans.

In case you are unaware, senior executives working for public companies cannot trade in the shares of their company just when they feel like it. There are very strict rules which apply, basically and rightly seeking to prevent executives benefiting from "insider" information concerning their employer's performance.

The long and short of it is that the rules mean there are hardly any times a senior executive can safely trade, safely in the sense of doing so without being accused of insider trading.

To get around this problem, the US Securities and Exchange Commission (SEC) has approved a method for senior executives to trade, namely a Share Sale Plan.

Put simply, a Share Sale Plan is a methodology where a senior executive stipulates well in advance (ie before they have valuable insider information) when shares they hold will be sold. The plan then runs its course and the shares are sold. 

Share Plans are not quite tablets of stone. Some changes can be made, but they must be approved by the employer and there is a 60 day waiting period before any change can be implemented.

So, like many senior executives, I had entered into a Share Plan. The number of shares involved wasn't huge but I wanted to realize the value of some shares I owned and I certainly didn't want to run the risk of being accused of insider trading, so I entered into the Share Plan.

At a point in time, because the then current share price of my employer was well below the  price I had stipulated in the Share Plan as being acceptable to me, I decided to lower the acceptable price.  I requested the change, it was approved by my employer and, 60 days later, the change was implemented in the Share Plan. Subsequently, my shares were sold at the price I had stipulated was acceptable, on the date envisaged in the Share Plan.

So, no problem?

Well, the problem as far as the Wall Street Journal is concerned, is that I got lucky. Shortly after my shares were sold, the NASDAQ Exchange, on which my employer's shares were quoted, fell really badly. My employers shares fell as part of this general decline; really nothing to do with the actual performance of the company. So I was l lucky, pure and simple.

However, as I have already noted, the Wall Street Journal hates Share Sale Plans. So several years after I had sold my shares, one of their journalists produced an article, which basically implied that half a dozen named senior executives in various companies had unfairly benefited from Share Plans.

Now, I have no knowledge of the other senior executives named in the article. I have never met any of them and, in fact, didn't even recognize their names.  So I cannot comment on their cases.

But I CAN comment on mine.

I complied 100% with the rules which apply to Share Plans. I simply wanted to dispose of a small number of the shares I owned in a sensible manner. I (of course) had no advance knowledge of the major fall in the NASDAQ Exchange, which impacted my employers share price. In short, I did absolutely nothing that was at all questionable.

The Wall Street Journal never contacted me about this matter BUT implied in the article that I was unavailable for comment. Well, I could hardly comment if they never asked me to do so! This is unforgivable, since my contact details are on the internet in various locations, including LinkedIn.

So the article was run, in late 2012.  As I have already mentioned, my name was included, along with half a dozen others I do not know.

As well as stating, incorrectly, that I had been unavailable for comment, the article noted that since the share sale I had left my employer. Since the share sale was several years before the article appeared, a fair-minded person might view this as hardly surprising - but the Wall Street Journal is not, apparently, in the business of being fair-minded.

The article went on to suggest that the FBI and the SEC were investigating the "allegations" made by the Wall Street Journal. 

We are now in late May 2015, nearly three years on from the appearance of this article in the Wall Street Journal. Hardly surprisingly, I have never heard from the SEC, much less the FBI!

So why I am writing this? 

Simple. I contacted the Wall Street Journal. I spoke with one of the journalists who wrote the article (Rob Barry) and corresponded with Michael Siconolfi, the newspaper's Senior Editor. I pointed out to both of them that there was absolutely nothing untoward in relation to the sale of my shares; I stressed that the journalist had never contacted me; I emphasized that my leaving my employer had zero to do with the share sale years before; and I confirmed that I had never heard from the SEC or FBI.  All this being the case, I requested that my name be removed from the article.

The outcome? Mr Siconolfi wrote me an email stating that "because the article was factually correct (?)" it could not be changed. I could, however, comment under the article listing online.

That's the rub, of course. The Wall Street Journal publishes an article implying I have done something underhand - which I categorically have not - and this slur on my reputation appears for ever more on the internet.

So here's my message to the Wall Street Journal and Mr Siconolfi, their Senior Editor.

A man who has done no wrong has taken the trouble to contact you. I have demonstrated that your article, which really consisted of ill-founded implications, also had several "factual" errors, in that the journalist(s) clearly never attempted to contact me AND neither the SEC or FBI are investigating the matter. 

So do your Newspaper and yourself a favour. Remove my name from this story. That way, you can save YOUR reputation.

Otherwise, you have simply proved that there is no difference between the Wall Street Journal and a poisonous Tabloid, apart from the cover price. If that is the case, the best place for the publication is wrapped briefly around a bag of British Fish & Chips and then consigned to the nearest dustbin.

 

 

 

 

Saturday, 30th May 2015

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