Bethany McLean: your benefit of the doubt is hereby revoked

    There’s no sense denying it: reporters depend on sources, and in the mind  of most business journalists, a connected hedge fund manager will always prove a more valuable source than even the CEO of a public company.

    Hence, as I’ve reminded my fellow market reformers time and time again, it is not necessarily a sign of corruption that some business journalists — Bethany McLean included — regularly toe the hedge fund line.

    However, as I’ve very recently learned — at least in the case of Bethany McLean — I was wrong.

    What changed my mind?

    Christmas.

    Rather, the early Christmas that arrived for me in the form of about 1,000 pages of discovery just unsealed in the Fairfax Financial (NYSE:FFH) vs. SAC Capital, et al, lawsuit, in which Fairfax claims a conspiracy (or “Enterprise” as it is termed in the suit) involving multiple short-selling hedge funds, financial analysts and business journalists intent on destroying the company for monetary gain.

    Included in this mass of documents are hundreds of emails and instant message transcripts between hedge fund managers, their operatives and such “journalists” as Bethany McLean, Herb Greenberg, and Roddy Boyd.

    Almost without exception, each of these is immensely useful in understanding how these folks all relate to each other. But among them all, the most revealing — to say nothing of damning — are those between Bethany McLean, then of Fortune, and the upstanding folks at hedge fund Copper River Management.

    The emails appear below in blue, with my comments in black.

    From: Marc Cohodes
    Sent: Thursday, December 7, 2006 3:21:12 PM
    To: Bethany McLean
    Subject: ffh

    FFH is the Canadian Enron and it could even be worse…We are sending you stufff.. I suggest since [Copper River employee and former SEC attorney Richard] Sauer is on the East Coast (for now) that you 2 meet, and soon… there is an “enterprise” here and he can lay it out clear as day.

    It bears noting that, according to filings in the Fairfax suit, the various participants in the attack on Fairfax stock referred to their effort collectively as “the Enterprise”. Whether or not this is what Cohodes was alluding to when using the term — which might not otherwise belong within quote marks in this context — is not clear, but certainly suggestive.

    From: Bethany McLean
    Sent: Thursday, December 7, 2006 3:48:43 PM
    To: Marc Cohodes
    Subject: Re: ffh

    Makes sense. Send me whatever you can think of – the more documents the better!

    Without Cohodes offering a bit of proof to back his Enron/Fairfax comparison, McLean finds it “makes sense” and commits to move ahead.

    From: Marc Cohodes
    Sent: Thursday, December 7, 2006 3:51:37 PM
    To: Bethany McLean
    Subject: Re: ffh

    don’t you worry…where do you want the stuff fed-exed to… I would set up a time for Sauer to come and see ya.. His code name is “Lavaman”…

    Cohodes then forwards this exchange to employee  Rick Sauer, who schedules a meeting between himself and an unusually eager McLean, set for one week thence.

    The outcome of that process was McLean’s scathing March 6, 2007 Fortune piece: The inside story of a Wall Street battle royal.

    How can I be certain that this particular story was the direct result of the Cohodes’s efforts? The answer to that question is where the situation becomes particularly disturbing…sufficient to leave me feeling physically ill, and prepared to officially add Bethany McLean to the short but distinguished list of truly captured and corrupt journalists.

    From: Marc Cohodes
    Sent: Wednesday, March 21, 2007 9:51 AM
    To: Bethany McLean
    Subject: ffh

    you hear anything there??? the stock is up 45 points since your piece and I dont understand it…

    Of note: on March 5, 2007 FFH closed at $190.09, and on March 21, 2007, FFH closed at $234.53, a difference of $44.43.

    From: Bethany McLean
    Sent: Wednesday, March 21, 2007 11:51:57 AM
    To: Marc Cohodes
    Subject: Re: ffh

    I’m getting the same question from other people. No, I don’t have a clue. I’m worried they’ve gotten the SEC or the Southern District to take them seriously – the Spyro [Contogouris] stuff makes you realize anything is possible – and they’re leaking the news to shareholders ahead of time. What do you think?

    A day later, Cohodes icily responds with nothing more than his cell phone number.

    From: Marc Cohodes
    Sent: Thursday, March 22, 2007 5:12 PM
    To: Bethany McLean
    Subject: Re: ffh

    415-350-88**

    Based on McLean’s reply, we can presume she followed Cohodes’s tacit demand, and that the conversation was less than pleasant.

    From: Bethany McLean
    Sent: Thursday, March 22, 2007 6:12:48 PM
    To: Marc Cohodes
    Subject: Re: ffh

    Sorry to be a little bad-tempered. This FFH story almost killed me, so I hate hearing that it was pointless. Maybe it’ll be a long, slow thing..

    I suspect the emails you’ve just read are the real reason Bethany McLean made a sudden departure from the world of business journalism earlier this year.

    As for me, it’s been nearly 24 hours since I first encountered this exchange, and yet I still cannot read it without feeling like I’ve just taken a blow to the solar plexus.

    Seeing proof that both a hedge fund manager and an ostensibly reputable business writer viewed the sacred institution of journalism as a means of wrecking a company, and that they both also felt disappointment when their efforts proved insufficient, with the “journalist” finding solace in the prospect that the company’s eventual destruction might simply be a “long, slow thing” literally leaves me breathless.

    Stay tuned for still more of the explosive revelations found within the reams and reams of discovery in this case.

    If this article concerns you, and you wish to help, then:

    1) email it to a dozen friends;

    2) go here for additional suggestions: “So You Say You Want a Revolution?

    This post was written by:

    - who has written 103 posts on Deep Capture.


    Contact the author

    56 Responses to “Bethany McLean: your benefit of the doubt is hereby revoked”

    1. gary says:

      house by house,, get rid of them one at a time, REDMOND is my favorite. we need a bigger piece of cheese to catch that rat or a BIGGER TRAP

    2. Reporter101 says:

      All I can say is WOW and where are the indictments already ?
      What pathetic excuses for human beings. Throw them in jail for treason and throw away the key…I’ll bet the Fairfax shareholders are PIZZED !

    3. Feedchipper says:

      Fantastic work, Judd. Please share more of your “Christmas” with us when you are able.

    4. Jeremiah 9:24 says:

      Dr. Byrne:

      I am not a litigator but I think that it might be fun to suggest to any friends you have at FFH that they sue Fortune magazine and Bethany personally as co-conspirators along with Cohodes et al.

      Was Bethany a rogue, or did her editor(s) know where she was getting her information and for what purposes she was distributing it thru their magazine? I am sure discovery would find out if there is an email trail running through Fortune. I hope that you guys have or get access to deposition transcripts from Bethany and Herb and any other ‘journalists’ involved.

      Another issue is, will Cohodes and friends have enough money to satisfy a judgment when this is over? I am sure Bethany won’t; but Fortune mag. is probably another viable deep pocket.

      Just a thought….

    5. AMG says:

      More pieces fit into place . . .

      Those close to me know of my interest in the market maker BATS. Take a look at their website and you will understand why.

      http://www.batstrading.com/

      http://www.batstrading.com/membership.php

      Madoff’s niece, Shana, was a compliance lawyer at his firm and last year married Eric Swanson, a former assistant director of compliance and examinations at the SEC. Swanson left the SEC in August 2006 and is currently the general counsel of Bats Trading Inc., the third-largest U.S. equity exchange by trading volume.

      BATS is an invisible conduit for ilicit counterparty transactions. I wish I could talk fruther but some things I just have to bring to everyone’s attention.

      To all, happy healthy year . . . let’s celebrate as the walls of the DTCC come a tumblin’ down . . . thanks to all. Hope that my two cents every now and then is of benefit.

      AMG

    6. Michael Milkman :) says:

      Oh poor Bethany….
      Did Bethany get one of those nifty anonymous ATM cards that leads to the Bank Of Hotel California?

      Bethany ___A Sickening Captured Journalist!!!!!

    7. The oracle knows all. says:

      “The smarter the journalists are, the better off society is. [For] to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.”

      Warren Buffett

    8. tommytoyz says:

      Great work Judd!

      Thanks for slogging through the data and bringing out the nuggets and connecting the dots. I know it’s not easy.

    9. iStandUp says:

      Thank you Judd for finding a concrete connection between a journalist and counterfeiting hedge funds!

      This afternoon “chairman Christopher Cox said Tuesday his agency repeatedly failed for at least a decade to pursue allegations of wrongdoing by Wall Street figure Bernard L. Madoff, the alleged perpetrator of a $50 billion Ponzi scheme.”

      And in a hint that Cox suspects some “foul play” in the SEC in the Madoff affair, “Cox also ordered the removal from the ongoing investigation of any SEC staff members who have had contact with Madoff or his family.”

      Could this be the beginning of a SEC overhaul where naked shorting is made a criminal offense?

    10. mhelburn says:

      Judd,

      There are no surprises here as to character. There a people who will try to destroy others for profit. They will lie, perjure themselves and when cornered try to stop people from using their right to free speech. Liars call the bearers of the truth “tinfoil hats”.

      I’m proud of my aluminum Stetson. I wore my “I’m Bob O’Brien” shirt today.

    11. Hotline says:

      The FBI has set up a Madoff hotline. I bet that includes investigating corrupt SEC officials and why everything from stock to bonds to gold and grain fails to deliver.

      We should all call and make sure the FBI is aware of this site, thesanitycheck, the old investigatethesec.com site, etc. as there is information going back years that the SEC knowingly ignored.

      Call them now while you think of it to explain how the IOU scam works.

      The hot line number is (212) 384-2359

    12. Hotline says:

      Mary, I always figured you for Bob.

    13. ted says:

      Some guy named trademonster floated a rumour back in 2006 that Madoff was going be shut down for SEC volations and that it was Spitzer’s office doing the investigation.

      http://goldismoney.info/forums/showthread.php?p=1468971

    14. Reporter101 says:

      Hey Vanity Fair !
      What about a story on yours truly Bethany ? Think they’ll bite ? An Inside story…Bwwwwaaaaaaa

      Reporter101

    15. Sean says:

      Is it just me or has anyone else noticed the timing of these discoveries? Just before a new admin comes into office and a new SEC commish is about to be named. Also would it have not been cheaper to settle all of these fails than promise 8.5 trillion to the criminals that masterminded this disaster. Just asking. Their game is now officially busted open, I have to think that this was all planned though, this could all have been controlled, but they did not want it that way. The real question is why!!!

    16. Kyle says:

      Hello Judd, I was curious if you had the link to the 1000 page court case,

      Thanks
      kgh789@mail.usask.ca

    17. Pins and Needles says:

      Let me understand this. You have a hedge fund operator, a former enforcement lawyer from the SEC and a financial journalist. The only thing missing is a class action attorney. Oh, that’s right.. the really aggressive ones are already in jail.

      We shouldn’t forget the paid bashers, the traders who hit the bid over and over as part of their job, moles planted inside companies trying to secure inside information, people who talk to old ladies and without their knowledge or consent list them as lead plaintiffs in bogus class action lawsuits.

      How did that happen? One party talks to a little old lady and then her name shows up on a lawsuit brought by law firm whose head is now in jail. Was that a Milberg Weiss lawsuit with JCP/Eckerds? What is the timing on that? Did the law firm ever contact the little old lady? hummmmm Somebody must have talked to the little old lady and then talked to the law firm and then the suit was filed. hmmm?

      Then there were the phone taps, stolen bank records,stolen phone records, harassment of a woman who was supposedly the mother of an anonymous internet poster by a journalist. This guy spends all this time and money to investigate who an anonymous poster is and nobody knows about a 50 billion dollar Ponzi scheme.

      The Madoff scandal brings to mind the philanthopy… the generous donations to politcal and charitable organization, the fancy houses, the big wheel syndrome… all built with stolen money. Connections via marriage and employment. Don’t you just love it..

      One truly remarkable hedge fund genius said.. “I’m not short, I have puts.” He swirled back in forth in his chair as he suffered through the interview. And it is on the web for posterity. The words we write today are our legacy.. This article will be seen for who knows how long? Not much chance of it being deleted.

      Regulators able to access the internet. FBI, SEC.. Arlen Specter said to the gent from the DOJ, “Are you watching these lawsuits to see if any criminal ….?” to which he responded in the affirmative.

      I’m not sure what the definition of racketeering is. I’m not certain what the definition of stock manipulation is or conspiracy to commit stock manipulation. I can’t come up with the exact definition of front running or trading on non-public information. Where is a good securities industry lawyer when you need one?

      Judd, you will break my heart if you have anything like this between a hedge fund operator and Herb Greenberg. I really miss his appearances on CNBC. He is such a standup guy.

    18. mfm1021 says:

      Any means of providing a link to the FFH discovery material? Lots of forensic folks here just might be able to connect a few additional dots. 2009 is going to be a great year!

    19. Sam says:

      As a nation, we have lost our moral compass which guided us for over 200 years. Thanks Judd, for contiuing to expose those who contribute to our loss.

    20. Patchie says:

      Yesterday Chairman Cox asked for a formal investigation into the enforcement staff. He did so based on evidence that preferential treatment may have played a role in the latest Madoff scandal. Cox is willing to throw everyone under the bus, like a good politician does, to protect his own hide.

      But that being said, was it not Cox who stopped all subpoenas into financial journalists? Was it not under Cox’s watch that SEC Attorney’s such as Richard Sauer worked and took orders from Copper River? Was it not Cox who was questioned by congress over these issues Judd is releasing today and this same Cox that did nothing about it?

      The financial press, Hedge Funds, Gradient Analytics were all under SEC investigation for a conspiracy to commit fraud and yet not a single finding of wrong doing came of it. Is Cox not responsible for anything?

      I believe that the amount of market cap lost to investors exceeds $1 Trillion based on this criminal enterprise and yet to date the SEC continues to protect the ‘connected members of Wall Street’. Everybody keeps asking – where are the SEC enforcement cases being brought against those committing this ‘abuse’ to our financial markets? Since 2005 and the incorporation of SHO the SEC has failed to take any reasonable steps in enforcement against the fraud these e-Mails now expose. Why not?

      Corporate Watchdog or Criminal Lapdog?

    21. ron doc says:

      Note to Behtany. Since I am sure you are reading this site.

      From the mouth of Christ, for your ear Behtany.

      “But there is nothing covered up that will not be revealed, and hiddenthat will not be known. Accordingly, whatever you have said in the dark shall be heard in the light, and what you have whispered in the inner rooms shall be proclaimed upon the housetops.NASB,Luke 12:2-3

      Think you can make hin a liar Bethany?

      Jud, thanks! I think you and Patric are doing the Lord’s work….Literally!

    22. Judd Bagley says:

      mfm1021 and Kyle:
      I don’t believe the documents are available online at this point, though I’m looking into the possibility of scanning and making them available somehow (however it would be a big job…lots of paper here). To see what other plans might exist for the documents, contact George Forbes at the Gibbons Law Firm: 973-596-4509

    23. Maggie Knowles says:

      Sean – maybe everyone expects a pardon from Bush before he leaves office?

    24. al says:

      Barroway Topaz Kessler Meltzer & Check, LLP the NEW Milberg Weiss

    25. frankiwa says:

      I do find it interesting that many of the journalists/analysts that are alleged to be a part of the manipulation/fraud are all leaving their firms/news agencies.

      Herb Greenberg left all of this journalism/blogging jobs, the analysts at Gradient Analytics who left their jobs, Bethany Mclean, etc….

    26. tofu says:

      Judd, many of today’s copiers will scan and send them to an email address (instead of copying them to physical paper). The ones at work are high performance so can crank out 1000 scan in probably 15 mins or so.

    27. GMC says:

      The SEC is bought and paid for.

    28. Reporter101 says:

      If we do not see any new members joining CLUB FED after all this information that is surfacing, then we can add Congress to the bought and paid for list with the SEC.

    29. Judd Bagley says:

      Tofu: that may be true, but you clearly haven’t seen our office! It’s pretty Bohemian.

    30. Reporter101 says:

      Deer Santa, (JUDD)
      Four Christmiss I wood like to see emales that halve other journalist and Hedgies names that attak AMERICAN companies. I have been reel gooder this year. Can you please bring me any emales with the names Greenberg,Boyd or Remond ?

      Thanx Santa

    31. Kyle says:

      Judd,

      Thanks for replying to me….. It would be great if you could somehow get them scanned or however a person would do it…… I badly want to get my hands on it so I can rip through the 1000 pages!! Hope to hear from you soon,

      Kyle

    32. Judd Bagley says:

      Ok ok ok…I’m convinced. I’ll find a way.

    33. tofu says:

      All, this is an exceptional time to spread the word about deepcapture.com. Reading through many of these SEC articles, one is generally able to voice one’s opinion at the end. I’ve been posting dc links to as many sites as I’ve read and suggest everyone take the opportunity to do so themselves.

    34. hotline says:

      The FBI has set up a Madoff hotline. I bet that includes investigating corrupt SEC officials and why everything from stock to bonds to gold and grain fails to deliver.

      We should all call and make sure the FBI is aware of this site, thesanitycheck, the old investigatethesec.com site, etc. as there is information going back years that the SEC knowingly ignored.

      Call them now while you think of it to explain how the IOU scam works.

      The hot line number is (212) 384-2359

    35. discovery says:

      Doesn’t it compromise the case if the discovery materials aren’t kept confidential? Aren’t they presumed confidential when delivered?

    36. ron doc says:

      Jim Sinclar wants a 100k emails to Cox on other areas of fraud Cox and SEC are looking the other way on. Help if you can.
      http://jsmineset.com/

      Comrades in Golden Arms (CIGAs),

      I call upon you for positive action.

      We need 100,000 emails to Cox using the data of #2 below.

      1. The Comex must be stopped. I know there are two of you reading this that can by yourself stop the Comex without the need of anyone’s assistance. If I have helped you now it is time to return the favor.

      Please stop the Comex. Reduce their warehouse by only 50% and the short manipulators are done.

      We do not wish to break the playing board, we only wish to equal the advantage between the public and the up to now pocket picking short gold bank manipulators.

      2. The short pools and naked short sellers have caused us unprecedented and undeserved losses of capital value. The total capital value loss in junior gold exploration, development and producer shares is well over $50 billion.

      Let us use their Mea Culpa on Madoff to say that the SEC has blown another one by supporting the useless thieves who violate the law daily using Canada as the jitney into the US as naked and pool short sellers. This is so blatant, so clear, so evident that we can only assume that the SEC is purposely looking the other way.

    37. Jeremiah 9:24 says:

      Judd you are going to overwhelm and perhaps anger that poor guy at Gibbons Law Firm giving out his number; give us a hint instead, so Bethany et al. will know what to prepare for. It’s not like they can run and hide at this point, and I am pretty sure that bankruptcy won’t erase a civil judgment for fraud.

      Wonder if any pension funds, charitable organizations/endowments or educational institutions lost money on stocks these guys attacked….

      Funny thing, for a corrupt journalist and I am pretty sure their print outlet as well, jurisdiction could be anywhere in the country. Why, I bet some enterprising trial lawyer in Missouri or Wisconsin or Florida or South Carolina could just locate a person or two –or maybe a state pension fund that lost some money in FFH, no less — who got hurt by one of Bethany’s hit pieces, and start firing away at her and Fortune — as well as her hedge fund masters, of course.

      Did Bethany and the others think about the people they were cheating? Wonder if any Union money was lost in FFH or another of their victims. Wouldn’t that be a trip, if they cheated a bunch of union thugs out of a few mil.

    38. Doc Holliday says:

      “Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and/or sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of “racketeering activity.” RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect treble damages.”

      “Under the law, racketeering activity means:

      * Any violation of state statutes against gambling, murder, kidnapping, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical (as defined in the Controlled Substances Act);
      * Any act of bribery, counterfeiting, theft, embezzlement, fraud, dealing in obscene matter, obstruction of justice, slavery, racketeering, gambling, money laundering, commission of murder-for-hire, and several other offenses covered under the Federal criminal code (Title 18);
      * Embezzlement of union funds;
      * Bankruptcy or securities fraud;”

      enough said.
      How can this be ignored for any longer?

    39. Feedchipper says:

      This YouTube clip puts a face to the behavior (they don’t seem to match, do they?):

      http://www.youtube.com/watch?v=U9czXhjH7BI

      Her final sentence is particularly ironic.

      I wonder if her career from this point forward will be “…a long, slow thing..”

    40. Brian says:

      I love the conspiracy theories on this website. Here’s one for you, Fairfax Financial is the largest single outside shareholder of overstock.com, the owner of this Deep Capture website. Gee, why will I not be surprised if this doesn’t get posted after “moderation”.

    41. lenofus says:

      Well, Brian, it got posted. What’s your next stupid comment????

      do you think we’re Weiss, or Stock lemon, or Antar?

      Hey, Brian. Where’s Herb?

      Cheers.

    42. Canada says:

      The TSX exchange in Canada didn’t trade all day because of “technical difficulties”.

      I wonder if they were Madoff’ized.

    43. Reporter101 says:

      __What a tangled web they weave !!!

      _http://news.yahoo.com/s/ap/20081217/ap_on_go_co/madoff_scandal

      Attorney general takes himself out of Madoff probe

      WASHINGTON – The fraud investigation of Wall Street money manager Bernard L. Madoff took unusual twists Wednesday as the U.S. attorney general removed himself and the Securities and Exchange Commission looked into the relationship between Madoff’s niece and a former SEC attorney who reviewed Madoff’s business.

      The developments reflect growing criticism that Wall Street and regulators in Washington have grown too close. Madoff himself has boasted of his ties to the SEC.

      The question of Madoff’s connection to regulators goes to the heart of the investigation of the alleged $50 billion fraud, SEC Chairman Christopher Cox told reporters.

      Congress jumped into the Madoff scandal, too. The chairman of the House capital markets subcommittee, Rep. Paul Kanjorski, D-Pa., announced an inquiry that will begin early next month into what may be the biggest Ponzi scheme of all time and how the government failed to detect it.

      In New York, Madoff showed up at the federal courthouse to sign some papers in his case, wearing a baseball cap and walking silently past a reporter who asked Madoff whether he had anything to say to his alleged victims. Free on $10 million bail, Madoff now has a curfew and an ankle-bracelet to monitor his movements.

      U.S. Attorney General Michael Mukasey recused himself from the Madoff probe because his son, Marc Mukasey, is representing Frank DiPascali, a top financial officer at Madoff’s investment firm. The Justice Department refused to say when Mukasey became aware of the conflict but confirmed Wednesday he was removing himself from all aspects of the case.

      DiPascali was the Madoff employee who had the most day-to-day contact with the firm’s investors. Several described him as the man they reached by phone when they had questions about the firm’s investment strategy, or wanted to add or subtract money from their accounts.

      The turmoil at the SEC came as the investigation into the scandal widened.

      Massachusetts Secretary of State William Galvin’s office said he subpoenaed Madoff’s brother, Peter Madoff, who is the chief compliance officer of Madoff’s company, and Marcia Beth Cohn, chief compliance officer of Cohmad Securities Corp., which is in the same building in New York. Galvin is trying to determine the relationship between Madoff’s firm and Cohmad Securities, as well as the names and numbers of all Massachusetts investors with both companies.

      The events unfolded the day after Cox delivered a stunning rebuke to his own career staff, blaming them for a decade-long failure to investigate Madoff.

      Credible and specific allegations regarding Madoff’s financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox. Cox said he was gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate the allegations or at any point to seek formal authority from the politically appointed commission to pursue them.

      Cox’s critics said that targeting the staff was Cox’s attempt to salvage his own reputation.

      “He put in place the people he is now shifting the blame to,” said Ross Albert, a former SEC senior special counsel, former federal prosecutor and now a private attorney in Atlanta.

      Senate Majority Leader Harry Reid, D-Nev., suggested Cox bears some of the responsibility for what went wrong.

      “I served in Congress with Christopher Cox, but I don’t think he’s going to make the All-Star team,” said Reid.

      SEC Inspector General David Kotz is looking into the agency’s failure to uncover the alleged fraud in Madoff’s operation. One area Kotz said he will examine is the relationship between a former SEC attorney, Eric Swanson, and Madoff’s niece, Shana, who are now married.

      As an SEC attorney, Swanson was part of a team that examined Madoff’s securities brokerage operation in 1999 and 2004. Neither review resulted in any action against Madoff. In a statement about Swanson’s role, the SEC compliance office cited its strict rules prohibiting employees from participating in cases involving firms where they have a personal interest.

      A spokesman for Swanson said that he and Shana Madoff met at a breakfast in October 2003, started dating in April 2006 and married last year.

      Kotz said his office would move as quickly as possible to complete the inquiry into why regulators didn’t pursue Madoff more aggressively.

      Kanjorski, the lawmaker, said his subcommittee’s inquiry will examine the alleged Madoff fraud and try to determine why the SEC and other regulators “failed to detect these substantial evasions.”

      With the scandal swirling around Madoff, he was unable to find co-signers of his bail package. The judge modified the bail package, and gave lawyers until next Monday to come up with additional paperwork.

      Associated Press writers Lara Jakes Jordan in Washington, David B. Caruso in New York and Jay Lindsay in Boston contributed to this report.

    44. patchie says:

      Brian – is that as in Brian Harris?

      I wonder, what part of the details in those e-Mails did you not get? You clearly have no issue with a Fortune Reporter and a Hedge fund working together to manipulate a market but you do have issue with deepcapture reporting it because it involves an investor in overstock.com.

      Tell me, are you this conflicted in all you do? For me, I would not tolerate fraud from anybody but based on your post you seem totally accepting of the McLean – Cohodes relationship. Care to explain?

    45. Judd Bagley says:

      Brian: sorry, you’ll have to do work harder than that to get a comment removed from this blog. In fact, the last time we did that it was after someone insulted Carol Remond in ways we felt inappropriate.

    46. Brian Villwok says:

      IT REALLY IS SAD AND FUNNY HOW THESE REPORTERS OPERATE.

      Here is what Herb Greenberg told me a couple of years ago on Marketwatch.com……..Keep in mind that I had a published book that explained it all very easy for Herb and everyone to understand…

      take it away Herb………

      Brian,

      Some hedge funds and others try to use CNBC and all forms of the press to manipulate. Having worked at an arbitrage fund very early in my career, I also know that many funds like to talk to the press because they genuinely think they have a good story to tell or insight to share. Key is finding someone who has done the original work; not someone trying to pass along a story they merely heard.

      When it comes to money, there will always be efforts to manipulate. The role of a reporter is try to separate the wheat from the shaft. And just because a source is wrong doesn’t mean it was attempt to manipulate. I can generally smell attempts to manipulate a mile away, and go out of my way to avoid them. So do the reporters I know. Smart people do make mistakes; that’s life.

      In the end, if a story is a legitimate story, I don’t really care who or what the source is. But when you are as busy as I am, the quality of the person providing the tip or information is critical so you don’t spend as much time as we often do running up against dead-ends. Of course, that comes with the territory — and the job.

      Sometimes, when I hear from someone new, I ignore the idea unless it’s tremendously compelling to see how it plays out. If it does — and I never wrote a word — I realize I may have found myself yet another smart person to talk to from time to time. (I’ve also saved myself from looking foolish by doing that.

      Reporters are always looking for smart people who know more than we do. We then take it from there. Sometimes it’s a story; sometimes, it isn’t.

      THERE YOU HAVE IT IN HERB GREENBERGS OWN WORDS. ha!

      Brian Villwok
      Author of the 2006 book “Overstocked and Understood”

    47. Oh, I shunna sed dat says:

      Sauer was probably the one doing contract investigations for the shorts before leaving the SEC.

      Lavaman.. cute… a reference to making stocks blow up like a volcano.

      Why would Richard Sauer need an alias in talking to Bethany? I might suggest he take a gift of a mask to one of the other femme felons. For her not him. A visual prophylactic. And we all know who I’m taking about. The female version of Gary Weiss, a world-class bucket of ugly. Maybe it was just his alter ego…honest regulator, hedge fund shill.. Koko’s roommate.

      Everyone congratulate Bethany’s new husband… Building a life together.. well sort of.

      What does a defense attorney charge for securities manipulation and racketeering? I doubt that her employer will cover it. Bethany, if you are the first one to turn state’s evidence, you can get a better deal… The rest of the shills are still wondering which e-mails Judd is going to post next. They aren’t going to roll until they are exposed, so you and Lavaman are in unique situations..He probably knows that he could make a deal… You being first to get your dispicable self out there, use your head.. It’s totally your call.. You are in control… You were a naughty girl… and you worked so hard on that article..

      You can write a book about your experiences… “An Insider’s View”.. “The Dumbest Broad in the Room” “Dial M for Manipulation”

    48. tmg1 says:

      What is the over/under line for how long before Madoff is no longer the biggest fraud in US history?

    49. Kyle says:

      Hello Judd,

      I was curious if you happened to get the 1000 page case uploaded? Or is there any other way of receiving it?

      Thanks,
      Kyle

    50. Molon Labe says:

      I have an HP Digital Sender which scans to PDF with optical character recognition (so files would be searchable). I’d be happy to scan the documents for you. Contact me at the email I provided if I can be of help.

    51. brent says:

      And what a hitpiece! I read it. But anyone who had read it would have to consider selling his FFH shares. Of course, that is what they wanted.

    52. Speculator says:

      To: Andrew Serwer, Managing Editor, Fortune Magazine
      cc: Katy Reitz, Communication Director, Time, Inc.

      Dear Mr. Serwer:

      As a subscriber to Fortune Magazine, I am somewhat dismayed to have read recent allegations of unprofessional journalism on the increasingly popular BLOG, DeepCapture.Com, and the questionable journalist’s connection with Fortune Magazine and Rocker Partners. In the event you are not familiar with DeepCapture.Com, it is the collaboration of Dr. Patrick Byrne of Overstock.Com, and “uncaptured” journalists, such as Judd Bagley and Mark Mitchell. It is a finalist in the 2008 Business BLOG of the Year Award, and deservedly so. It is an extremely eye-opening BLOG with many explanations as to why the markets have found themselves with a huge loss of investor confidence lately. Surely, this is commentary deserving the immediate attention of truly objective journalism.

      Yet, it seems that despite Dr. Patrick Byrnes’ pleas for your responses to his allegations of manipulative journalism by your former reporter, Bethany McLean, you have remained suspiciously silent. As you are aware, this is not the normal actions of an innocent party, particularly journalists. I beg you to respond to Dr. Byrnes’ communique (email) of Dec. 22, 2008. Bad things sometimes happen to good companies. With big baskets, there are bound to be a bad apple now and then. But, a good apple producer will quickly cull them from the group and admit such things can occasionally happen, pointing out that steps have been taken to minimize recurrence. The lack of response makes it appear that apple producer knew the bad apple was in there all along infecting the rest (if I may use such an analogy).

      If his allegations are incorrect. Please give him the correct information. If however, he is correct, please make it clear whether or not management knew of such activities. It is imperative, in my humble opinion, to your image and credibility. I thank you in advance for your prompt response.

      Sincerely,
      Speculator

    Trackbacks/Pingbacks

    1. [...] Is Peter Eavis corrupt? I’d have to say that no, I don’t think so. At least not corrupt after the tradition of Bethany McLean. [...]

    2. [...] In a recent item, I concluded — based on my analysis of an email exchange between former Fortune reporter Bethany McLean and former Copper River Partners hedge fund manager Marc Cohodes — that McLean wrote a highly critical article about Fairfax Financial Holdings (NYSE:FFH) with the expectation that her work would cause FFH stock to drop precipitously in value. [...]

    3. [...] Fortune Magazine has refused to comment on  DeepCapture’s publication of two pieces (”Bethany McLean: Your Benefit of the Doubt is Hereby Revoked” and “Rocker Partners and Bethany McLean: the Smarmiest Guys in the Room“) that [...]


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