Fortune Magazine Stonewalls Exposure of Bethany McLean Perfidy

Summary – This post contains two emails I sent Fortune Magazine regarding Deep Capture’s work documenting an inappropriate relationship between journalist Bethany McLean and hedge fund Rocker Partners. If after reading this you agree that mine were fair questions deserving of reply, then please do me this small service: write Fortune and tell them you think they should answer these questions (you might even post a copy of your email as a comment to the bottom of this post, so there be public record of it):

Managing Editor: Andrew Serwer – [email protected]

Time, Inc. Communications Director Katy Reitz – [email protected]

Dear Reader,

When Fortune Magazine contacts me I always respond (excluding unnoticed emails they send at day’s end hours before press-time). Yet Fortune Magazine has refused to comment on  DeepCapture’s documentation of the perfidious behavior of Fortune Magazine Reporter Bethany McLean. Two DeepCapture posts (“Bethany McLean: Your Benefit of the Doubt is Hereby Revoked” and “Rocker Partners and Bethany McLean: the Smarmiest Guys in the Room“) reconstruct how Rocker Partners sought out Bethany McLean to target a firm, took out a large short position 10 days after her cooperation was secured, then doubled down two months later, just three days before Bethany published her hatchet job (a time-line that suggests, of course, that they were privy to the content and timing of Bethany’s article). In addition, Bethany’s  reporting relied heavily upon Spyro Contogouris, a conman, now imprisoned, about whom she spun apologetics while regurgitating his criticisms (criticisms that with the passage of time proved baseless). When the share price of the target company rose, Bethany commiserated with the short-selling hedge fund that had assigned her the story, sending this email:

From: Bethany McLean
Sent: Thursday, March 22, 2007 6:12:48 PM
To: [redacted] 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..

Thinking that Fortune Magazine might be troubled to learn that one of its journalists had provided such white glove service to a hedge fund, I sent Fortune two emails (below) giving opportunity to comment. They have refused. Please read the correspondence below and, if you agree that Fortune Magazine should address these concerns publicly, please let  Fortune know it (following the instructions at the top of this essay).

I thank you in advance for considering this request.


Patrick M. Byrne

On Mon, Dec 22, 2008 at 7:03 PM, Patrick Byrne wrote:

Dear Ms. Reitz,

Happiest of holidays.

Last week I sent you a link to an exposé on erstwhile Fortune journalist Bethany McLean.

Today DeepCapture posted the sequel: analysis of the trading records of Rocker Partners (a.k.a. Copper River) confirms that Rocker did front-run Bethany’s story, both shortly after she met with Rocker Partners’ representative Richard Sauer (a.k.a. “Lavaman”, himself a former SEC attorney whose federal career seems to mirror Bethany’s approach to journalism), and then again immediately before Bethany published.

Note the data in that exposé regarding failures to deliver, and the likely provenance of those failures, in my recent critique of a DowJones reporter (“Carol Remond Tells a Joke She Doesn’t Get“).

I am preparing this as a story to be included in an Overstock email that gets sent to 17 million of my closest friends. It would explain that a crooked hedge fund (since imploded) cooperated with a bent reporter to break the law, the reporter used her offices at Fortune to indulge their illegal acts, that Fortune had been warned of this possibility and engaged in a cover-up, and that Fortune practices shill journalism for favored Wall Street elite, many of whom are crooks (a message that will, I expect, resonate). In short, Bethany’s emails and Rocker’s trading records will be used to demonstrate how the standards of journalism evinced by Fortune are more bent than a streetwalker’s stumble.

I understand the legal ramifications of suggesting to 17 million Americans that Fortune has taken part in a criminal conspiracy, of course, and will happily provide our lawyers’ address for receipt of service, upon request.

On the other hand, an abundance of journalistic caution leads me to contact Fortune once again to offer opportunity for comment, and in particular, to correct me if I am in error. In fact, I would like to offer you the opportunity to respond in up to 50 words that I will commit not to edit or abridge, an offer that is surely more generous than those your publication generally makes (setting aside whatever unknown arrangements it or its journalists make with hedge funds such as Mr. Rocker’s, of course). Please feel free to respond to the allegations above, or the questions below, or simply respond more generally, as you prefer.

I look forward to hearing from you. Until then, I remain,

Your humble servant,

Patrick Byrne


PS Please tell [a long-time acquaintance at Fortune] that I return her regards…


From: Patrick Byrne
Sent: Wednesday, December 17, 2008 2:22 AM
To: [email protected]
Subject: Respectfully request on-the-record response

Dear Ms. Reitz,

Please find a blog that DeepCapture posted today regarding 2006-2007 communications between a hedge fund manager and erstwhile Fortune reporter Bethany McLean concerning Canadian financial company Fairfax. I have obtained these communications pursuant to the decision of a New Jersey State court.

As is evident from the emails, the hedge fund manager put Ms. McLean up to the story hoping that a report in Fortune magazine would move the stock down. When the stock instead went up it rendered Ms. McLean’s story “pointless” in her eyes (which makes [sense] only in a world where her “point” was to move the stock down). After commiserating with the hedge fund Ms. McLean expressed her wish that the targeted company’s demise would be “a long, slow thing.”


1) What is Fortune’s policy regarding journalists working with short selling hedge funds to drive down stock prices?

2) Has Fortune conducted an internal investigation into the relationship between Ms. McLean and hedge funds, including the one mentioned in the blog?

a) What were the results of that investigation?

b) Did this investigation have anything to do with Ms. McLean’s departure from Fortune?

3) Has Fortune conducted an internal investigation to determine the accuracy of Ms. McLean’s reporting on Fairfax and on other companies?

a) What was the result of that investigation?

b) Did this investigation have anything to do with Ms. McLean’s departure from Fortune?

4) Is Fortune aware that nearly every story written by Ms. McLean since 2001 was sourced from the same group of hedge funds, and that she never once contradicted their analysis? By Fortune’s standards, does this constitute “balanced” reporting?

5) In one email, Ms. McLean mentions Spyro Contogouris, who was employed by a group of hedge funds to harass and threaten Fairfax executives. After Mr. Contogouris was arrested by the FBI, Ms. McLean continued to characterize him as a credible financial researcher who worked independently of hedge funds. Does Fortune stand by that characterization?

I do not know when I am going to publish, but would expect it would be next week. However, I sincerely wish to represent fairly the point of view of Fortune.

Most respectfully,

Patrick Byrne


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

1) Let Fortune know how you feel about Bethany McLean’s work by writing Managing Editor Andrew Serwer ([email protected]) and TimeLife’s spokesperson Katy Reitz ([email protected]) (post copies in the comment section below!);

2) email it to a dozen friends;

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

  1. To: [email protected]
    Cc: [email protected]
    Sent: Tuesday, December 30, 2008 2:11 PM
    Subject: Timely response from Fortune

    To Whom it may concern,

    As a long time reader of Fortune, it was while reading through today that I was most disappointed to discover the alleged journalistic integrity (or apparent lack thereof) of one of your more prominent writers. However, it was even more disconcerting to see the lack of reply by Fortune to what I consider as fair questions, given the specificity of the accusations. The argument put forth has as its basis discovery in a court of law, and not simply editorial opinion.

    Given your responsibility to present fair and balanced reporting to your readers, I would think that you would be concerned enough to respond to questions in a timely manner that seek to answer allegations some of your writers are willfully publishing stories for the expressed purpose of financial gain of hedge funds.

    I would urge you to respond to the questions that have been proposed in a timely and truthful manner. Nothing more than the journalistic reputation of your magazine as a source of impartial information is at stake. In the absence of a response from Fortune, I can only assume that the answer to the allegations trouble you and therefore must carry weight.

  2. New America to aserwer, Katy_Reitz
    show details 11:31 AM (0 minutes ago)

    The matter discussed here is quite disturbing.
    It would appear that Mr. Byrne is making a substantive claim.
    Do you intend to serve this gentleman or respond to his assertion?

    Best Regards,
    Anonymous Monetarist

    Dear Ms. Reitz,
    Happiest of holidays.
    Last week…..

  3. First Patrick you expose Wallstreet.
    Next the SEC, CNBC… then most hedgefunds, now Fortune and probably the NY times.

    And I am SURE you are not done.

    Have enough lawyers been born in America yet to cover this undertaking?!?!

    Tell them thank you for working pro bono. 😉

  4. To: [email protected]
    Sent: Tuesday, December 30, 2008 1:45 PM
    Subject: Integrity in troubled times

    To the editor

    I find it deeply disturbing that in these times of extreme volatility, rampant corruption, and the exposure of our own government in being complicit in many of the questionable actions that have occurred that have caused billions of dollars of damage to the American populace that your magazine was also part of the ongoing fleecing of the honest and hardworking people who make this country what it is. After reading Deep Capture and some of the court reports from the lawsuit that Fairfax has going against many of the suspect hedge funds, many of which have packed bags and split, I discovered that one of your very own was part of the scam and a very important one. Bethany McClean has sunk to the lowest levels of journalism and I hope the justice dept. picks up on this. I hope you realize that many companies have been destroyed and severly damaged due to these revolting practises and some of these companies provide protection to our armed forces. I can not begin to tell you the disgust I have for your company and Bethany McClean. I will inform everyone I know to avoid your publications and I hope justice follows for both of you.


  5. Patrick,

    Perhaps this will be of help…

    Posted on Felix Salmon’s blog:


    Taking note of your thoroughness here and also that you reference Bethany McLean earlier today, ‘Who Killed Frannie?’ was curious if you have caught this rather sensationalistic piece on Deep Capture?

    Am in no way related to this website, my thoughts are that the subject though would seem to be within your bailiwick.

    Perhaps you can add profile and or clarity to it.

  6. Patrick, you kick a$$ in ways that leave hyperbole feeling like understatement’s introverted little brother.

    As a FFH shareholder, THANK YOU!

  7. Ms. Reitz & Mr. Serwer,

    As you are aware, our capital markets are in turmoil as controversy after controversy spills over with regards to greed and abuse by the Wall Street elite. Mismanagement of mortgage loans, excess risk, and outright fraud and thievery have become commonplace as our nations capital markets and coverage of capital markets has catered to those who deceive us.

    As players within the financial media, it would be your place to protect the public from the industry wrongdoings but amazingly allegations continue to surface that allege collusion between the crooks of Wall Street and the major media. This is why I write you today.

    For years we have heard rumor that hedge funds have worked closely with, and in some cases commissioned the services of the financial media as part of a trading strategy to profit on the reports written. No media outlet was spared from allegation as writers for the Wall Street Journal, New York Times, Marketwatch,, NY Post, and Fortune have all been accused. Unfortunately the accusations fell short of proof as there were no available smoking guns to bring forth as evidence of abuse. But that has now changed.

    I have found on the internet evidence that Fortune reporter Bethany McLean was maintaining a close business relationship with Copper River Fund manager Marc Cohodes and that Ms. McLean engaged in using her access to the Fortune distribution stream to publish an article whose sole intent was to discredit a public company and drive down the value of the market in that company. Ms. McLean actually responded in an e-Mail to Marc Cohodes after the article failed to drive down the market that she was disappointed in the outcome and that she hopes her efforts were not a waste of time.

    Is this the type of standards that is Fortune and Time Inc.? Ms. McLean gained her fame after drafting work on behalf of Hedge Fund Manager James Chanos in her coverage of Enron and it appears continued to service funds beyond Mr. Chanos in the years that passed since.

    The e-Mail threads between Ms. McLean and Mr. Cohodes can be found at and for me at least I find the thread highly disturbing. I am glad that I am not an investor in that market of I too would have been at risk based on the actions of a hedge fund and an employee of Fortune.

    With Bethany McLean now gone from Fortune but another suspected writer falling into her place in Roddy Boyd, I ask whether Fortune has taken any steps to insure that their writers are not acting as hired guns for short sellers who wish to have their interests covered by Fortune. To what steps has Fortune investigated the allegations against Bethany McLean and what steps if any have been taken to discontinue this highly unethical if not highly illegal practice?

    I believe that the media is in a similar financial crunch as all other corporate operations during this difficult economic downturn. Could Fortune and the parent Time Inc. handle a lawsuit accusing the company of fraud involving hundreds of millions in stock losses?

    The public has put trust in how your business vets it’s information. When it comes to our capital markets it is not expected that financial reporters would make up stories and act in a biased way in order to please interested third parties who would directly profit from the reporters work. To not have such checks and balances is negligent and puts the entire company at risk.

    I await your response as to what steps have been taken to prevent further actions such as those presented by the e-Mail dialogue between Ms. McLean and Mr. Cohodes.

    Dave Patch

  8. One of your former employees and I believe one of your current employees have been mentioned numerous times at Both are intimated as being shills for hedge funds and display dishonesty as apologists for short-sellers bent on destroying companies for profit.

    Has Fortune done anything to address the lack of ethics? I’m sure that you have great resources to investigate the situation and will act appropriately.

    Best wishes for an honest and happy new year.

  9. To Mr.Serwer

    As the MANAGING EDITOR of Fortune Magazine, I was wondering if you would reply to Mr. Byrnes questions about the actions of Bethany McLean? Or get Ms. Reitz too. It seems to me alot of this countries problems were created by a bunch of crooks who got folks who were supposed to be protecting investors to look the other way. I would hope that based on what I have read about Ms McLean that maybe she wrote those articles on behest of short sellers without Fortune knowing what her real motives were. But since Fortune hasn’t come forth to denounce and deal with this matter or respond to Mr. byrnes questions, I (and alot of others) are beginning to question WHAT the Editors of Fortune really knew about her motives and if it is pretty typical of the type of journalists your company employs. Is Fortune part of the Wall Street Problem which has absolutely destroyed many senior citizens retirement accounts leaving them penniless in their twilight years.. Or will Fortune be one of the first to flush out the crooks and their activities and inform the public WHO the crooks are and how they got the regulators and journalists to work for them.

    I think it is time for your company to face the problem at hand. Did your Former Journalist use your magazine to make huge profits for short sellers? I think that with all the problems Wall Street Faces.. a company that stands up to get some integrity back has a much better chance of getting some public trust and surviveing the ties ahead than one who continues to hire reporters who intend to use their storeys to help certain hedge funds profit off the backs of the investing public. I hope you are on the investing publics (the ones who buy your magazine that your advertisers are trying to reach) side on this matter and not trying to cover up corrupt practices that will end up protecting the crooks. The skeletons are coming out of the closet one way or the other.

    Please reply to Mr. Byrnes questions or give him any information on the issues you can.

    Thank you

  10. Patrick, You have to have all you want to let your mind swing free
    You have to have the time that will let you be
    B. Leadon

    The deed may have been done but the tangible consciousness is being raised.
    Please remain precisely focused.

  11. Dr. B:

    You rock!

    On another subject, apropos of nothing: for the life of me, I can not figure out why the defendants in OSTK’s case in California would insist on a court order preventing you, CEO of the plaintiff, from reviewing or even seeing the discovery materials in your own civil action. I mean, what do they have to fear, since they are so obviously innocent of those baseless charges?

    “17 million of your closest friends” perhaps?

    I bet Fortune Magazine, and Time Inc., are deep pockets….

    Come on, Dr. B, tell us: did Gradient offer up anything more than an apology to get OSTK to release them from the lawsuit?

  12. I put this out to friends. Do same. Educate the folks. And to the knuckledragger who impersonates me, Firefox has a great extension so you can look up definitions with a click.

    Patrick (has asked us)for a favor………. Please read this blog entry. You may have to go back and see the emails he’s referring to, but basically, this Bethany McLean was in bed with hedgefunds writing stories to fit the short sellers positions. He’s asking we email Fortune, and ask – well, you’ll see.

    This is extremely important. You are very close to reading who is doing this to us. You ‘ll probably believe who it is, but you won’t believe why no on stopped them, until Patrick stepped up . Until then, no one of means dared to step up.

    I realize it takes some effort, but anything worthwhile usually does. Some asked me several years ago, when people thought I was crazy,”how come I don’t read about this in the papers?” Here’s your answer. And we will find the money trail. The IRS frowns on that stuff.

    And please, if you know of people who were smashed in their 401K’s, or screwed by Wall St. (that’s everybody, if you haven’t been paying attention), send this, and ask them to help. No, a sparrow won’t die if you break the chain, or no tragedy will befall you, but you may help end this.

  13. Mr. Serwer,

    I caught the caption of the 21 dumbest and thought it appropriate that your not responding to Patrick Byrne on Deep Capture and the continued employment of Bethany McLean has to rank high, if not on your list then in the minds of readers who will continue to take their eyes off Fortune, reading elsewhere, the blogs of credibility.

    Goodbye old log


  14. Ms. Reitz & Mr. Serwer,

    Fortune Magazine has a responsibility to deliver journalistic inegrity and factual information to its readers. This is especially important since many of your readers rely on the information published in your magazine to guide them in their investment decisions.

    When an employee of Fortune develops a relationship with a third party and then publishes articles that benefit that party, to the detriment of a public company and its investors, Fortune should take responsibility. That responsibility should extend beyond simple termination of employment and should include a public apology and offer to compensate the victims of the abuse. Ah, but who am I kidding?

    So, I simply ask that you PLEASE REPLY TO DR. BYRNES E-MAIL COMMUNICATIONS of Dec 17 and 22, respectively.

    You can read them at:

    There is a rapidly growing sector of the public and your readers that is VERY interested in the fleecing of retail investors by hedge funds, abusive naked short sellers and their accomplices in the media. The spotlight on stock manipulation is getting brighter. Lurking in the shadow of silence will only serve to convict you in the court of public opinion.

    Remember – It’s never too late to do the right thing (no matter what your attorneys tell you) and… It’s often the coverup that lands people in (insert unpleasant result here), not the crime itself.

    Please do your readers, investors and your reputation a service and make a public statement regarding this scandal. You’re either against the criminal activity, or by your silence, you are part of it.


    XXXXXXXX California

  15. Hi Katy,
    As Bethany’s erstwhile employer and colleague, do you not feel obligated to respond to Patrick Byrne’s questions regarding her disturbing professional conduct? Do you realize your continued silence means you are Deeply Captured?

    Kind Regards,

    PS In the 1/1000 chance you are ignorant of criminal events taking place at your publication, here’s a link to get you up to speed:

  16. How is Fortune going to respond to this National Disgrace. Reporters working with Hedge Funds to destroy public companies, cost investors money and people to lose their jobs, How dare Fortune be allowed to act this way. You must respond to this or your magazine with become a National JOKE and disgrace to the financial world. HOW many other Public companies were attacked by your Publication?

  17. Judd/Patrick/Mark/Dave/Bud/Bob,

    Do you guys have enough material for a book (or 10?). A Times/Amazon, best seller might be all she wrote.

    Regards (and Thanks!)

  18. It has been brought to our attention that while in our employ, one of our journalists was involved in a conspiracy to manipulate stock prices. We deeply regret that this happened and that our magazine was used to further a criminal enterprise. We have taken steps to insure that this never happens again. The employee no longer works here. Those who remain have been advised that we will not tolerate this behavior. When citing sources, we will alert our readers if a source of information is an accused or former felon. A breach of this policy will result in dismissal. The magazine leadership realizes that since we cover Wall Street that most of our sources will have to be cited to facilitate our objectives without it becoming burdensome to the reader, “AF” after a person’s name designates accused felon, IF for indicted felon, and “FF” will be used for former felon. This policy will go into effect immediately and the staff is also going to consider the need for other terms such as “former SEC regulator”, “current SEC regulator”, “notorious short-seller” and a catch all “suspicious character.” SC will be designated for all souces in the current employ of government agencies other than the SEC, those employed at the Federal Reserve, the DTCC, as well as elected officials. As an example, Richard Sauer, SC, FSR, AF, we believe would give our readers fair warning. Anyone with more than four letters following his name will simply be called, “asshole” which is easier to read and assures that the reader gives this person the credibility he or she deserves.

    Thank you for bringing this to our attention and providing us the opportunity to restore our good name.

    Joe Blow, associate editor and asshole.

  19. I know it`s hard to make money these days in your business. But it`s going to get harder for you if you allow the kind of thing alleges to go on right under your nose. You should reply to Dr. Byrne`s questions.The honest writers who contribute to your magazine should also speak out lest they be tainted by association. This is no time to circle the wagons and hide behind your reputation. If these allegations are false I expect you to speak out forcefully against them. If they are true I expect a public apology. Anything less and you are just part of the problem

  20. If you’re serious about this, why not take it to one of Fortune’s competitors? I know people at one of them, and might be able to help.

  21. In all my haste to chastise you and your magazine for being involved in Bethanies scam I forgot to make a formal complaint to the FBI. That has been rectified as well as the letter with all the particulars to the DOJ. Have a great day. Hope to see you in court with your sweetie.

  22. Thomas Vallarino
    President – National Investor Protection Coalition

    December 31, 2008

    Dear Andrew Server – Managing Editor, Fortune Magazine

    Evidence produced in the discovery phase of a lawsuit involving hedge funds shows beyond a doubt the corrupt nature of Bethany Mclean. She and Fortune must respond to the evidence now made public and it would be in the best interest of financial journalism and Fortune in particular to remove Bethany from any journalistic duties and state so in public.

    The CEO of has sent you and email with the evidence and asking for a response from Fortune, as his company has been a victim of Bethany Mcleans’s false and corrupt reporting in the past. It is only fair Fortune respond to the damning evidence against it that has come to light in the court case.

    The members of our non profit are fed up to the gills with corruption at all levels of the financial universe, including at financial publications. Please respond publicly or at the very least privately to the situation, lest Fortune’s role in this mess and it’s unwillingness to address it, tarnish the reputation of the magazine.

    Thomas Vallarino,
    President, National Investor Protection Coalition

    CC: Kathy Reitz – Time Inc. Communications Director

  23. To the Editors:

    I am sure it was never supposed to come to this.

    I have read the articles and damning proof of how one of Fortune magazine’s reporters was front-running negative stories from a now defunct hedge fund named Rocker Partners (aka Copper River). Worse yet, the hedge fund and your writer, Bethany McLean, were aided and abetted by a former SEC official named Richard Sauer. The articles published on the web can be found here:

    and here:

    Patrick Byrne, has issued yet another article asking for your input.

    The evidence provided is extremely damaging to Bethany McLean, Fortune magazine and Time Inc. You owe FFH investors a response. You owe the American investing public a response. I am asking that you respond to Patrick Byrne’s request for comment.

    As I opened with, I am sure it was never supposed to come to this. But it has spiraled out of control. It’s time to stop these criminals in their tracks. I ask that you stand up and take a stance. Let the public know that your magazine and company will no longer be used as a tool for hedge funds to cheat and steal from the investing public. That you too, will join with people like Patrick Byrne, and stop the corruption.

    What will it be. If silence is your only response, it will be an indictment against Fortune Magazine, Time Inc, and each individual who has aided and abetted these felons.

  24. 12/31/08

    Dear Ms. Reitz and Mr. Serwer,

    I offer the following in regards to the Bethany McLean issue raise at Over the last 29 years I’ve had the opportunity to write 7 unpublished books on “abusive naked short selling” (ANSS) frauds and “delivery failure related abuses” (DFRAs). Part of the reason why financial journals like your own knowingly or unknowingly aid and abet these frauds is because they don’t understand the mechanics of this family of incredibly heinous frauds.

    The securities fraudsters perpetrating these frauds typically assume large short positions against corporations that they deem either overvalued, as a possible threat to one of their own financial interests or just plain easy to destroy. In the early phases a fair percentage of the short positions are established in a legal manner associated with a legitimate “pre-borrow” before the short sale was made. Later on as the “rental fee” to pre-borrow shares escalates from the diminishing supply of legally rentable shares these fraudsters typically illegally bypass the pre-borrow through a variety of fraudulent means to circumvent the associated often onerous expenses associated with borrowing “hard to borrow” securities. This is referred to as “abusive naked short selling” (ANSS) which is deemed to be a form of fraud by Rule 10b-5 of the ’34 Exchange Act and the recently passed Rule 10b-21 also of the ’34 Act.

    One must realize that this has nothing to do with “legitimate naked short selling” (LNSS) performed by bona fide market makers injecting liquidity into especially thinly traded securities. As you well know “fraud” involves the use of deceit utilized for monetary gain. The deceit used by a knowingly or unknowingly corrupted financial journal involves the assumption of its readers that the story being presented was done in an unbiased and balanced manner. The deceit utilized by abusive naked short sellers involves the assumption that the purchaser of the nonexistent shares being naked short sold first of all exist and second of all will be delivered in a timely manner.

    Once the legal as well as illegal short positions are established then the “short” phase of these “short and distort” campaigns is pretty much done. Where you financial journals come in is during the “distort” phase. In the U.S. markets there have been approximately 8 “journalists” that have clearly befriended certain hedge fund entities that regularly target and attack corporations for the reasons cited above. The goal of these journalists is to produce what is typically referred to as a “hatchet job” on the corporation targeted for destruction. The purpose of these “hatchet jobs” is to encourage the selling of the targeted corporation’s shares as well as to dissuade the buying of their shares by prospective investors that respect the investment advisory opinions of that financial journal. The amount of damage that any financial journal can effect against the shareholders and employees of the targeted corporation is proportional to the amount of respect and the credibility that the journal has in financial circles. As we all know the readers of financial journals are typically interested in learning which investments might be prudent and which ones to stay away from. Thus the readers of journals like your own represent very fertile fields for those illegally trying to manipulate share prices downwards after establishing extremely large illegal short positions.

    The illegal share price manipulation downwards is associated with the fact that abusive naked short selling results in “failures to deliver” (FTDs) in clearing firms which procreate readily sellable “securities entitlements” as referenced on the monthly brokerage statements of the unknowing investor that assumed that what he purchased did indeed get delivered to his brokerage firm. As the levels of readily sellable “securities entitlements” invisibly build up in the share structure of the corporation targeted for destruction then the “supply” of readily sellable legitimate shares plus the “supply” of readily sellable “securities entitlements” interact with the ambient “demand” variable to determine the share price of the corporation under siege via the “price discovery” process. Since the “supply” and “demand” variables still interact to determine share price then a “supply” variable that has been illegally manipulated upwards will interact with the “demand” variable to result in a share price that has been intentionally (by those refusing to deliver that which they sell) manipulated downwards.

    What you need to realize is that the role of a respected financial journal with a large following of impressionable investors is integral to the commission of these thefts from unknowing American investors. This results in an immense responsibility on the part of the journal’s editors to make sure that its journalists have not been “captured” by the financial interests of billion dollar hedge funds with immense amounts of money and influence (perhaps in the form of access to hot stories) available to “accommodate” the needs of any journalist so inclined.

    This entire family of frauds is based upon one foundational reality. This revolves around the fact that corporations like sandcastles are much tougher to build then destroy. It appears that circumstances have placed the ball into your court leaving you with the option to sweep this issue under the rug or to become an avenue to expose this plague on our markets.


    Dr. Jim DeCosta
    Tualatin, Oregon

  25. What we do has consequences to ourselves and to others. We do not live alone. Those who shorted the market with the aid of the journalist/bashers may not have anticipated the severity of what has been wrought.

    Dan (we have barrelsof ink, stacks of money and all the resources in the world at our disposal, legal and indeed our media to crush him) Colarusso who left the Post last year for Portfolio will be leaving Portfolio in January, although he was asked to stay on after there were massive cuts. There will be a lot of competition in the financial press and more cuts because the advertisers who support them are cutting back. Maybe the cream will rise to the top.

  26. As a long-time Fortune reader, and an investor concerned with fair markets and level playing field, I believe Fortune owes a public response to the allegations of collusion between a reporter and a hedge fund as outlined by Patrick Byrne.

  27. The collective failure of Fortune and Time, Inc. to respond to Patrick Byrne’s questions concerning Ms. McLean, the apparent conflicts her relationships/sources may have presented, and quality of her journalistic duties while in their employment is both unfortunate and discouraging.

    Given the quality and sophistication of the investigative journalists/journalism strategic securities delivery failures concerning Dr. Byrne has assembled, some might be lead to construe that your unresponsiveness to their expose has been calculated. I hope you and/or your counsel might reconsider.

    Diligence or Willful Misconduct

  28. To: [email protected]
    [email protected]
    [email protected]

    Subject: Illegal Scheme To Manipulate Stock Market

    Dear Fortune Magazine, recently posted a story about how a Fortune journalist Bethany McLean participated in a illegal scheme, at the direction of a hedge fund, to drive down the price of a publicly traded company Fairfax Financial (NYSE:FFH)(See: ).

    Since this illegal scheme of stock market manipulation used your magazine, Fortune, through one of your employees, Bethany McLean, Patrick Byrne on December 17 and 22 wrote emails to Ms. Reitz
    asking for comment upon his discovery phase evident and some simple questions, such as,

    “1) What is Fortune’s policy regarding journalists working with short selling hedge funds to drive down stock prices?”

    Since my retirement plan is in a 401K plan that has been adversely effected (lost most of its value) by counterfeiting hedge funds using journalist (and other illegal tools) to illegally manipulate stock prices downward, I also would like to know the answers to Dr. Patrick Byrne’s questions and my questions here:

    >> Do you plan to investigate these charges against your magazine?

    >> And do you plan on reporting all illegal stock market activity by employees to the the DOJ, FBI, and SEC for prosecution?


  29. If I were your attorney, I would recommend your not confirming or denying anything. Personally I am symphathetic to Patrick’s demise at the hands of criminals you endorse. On the other hand if Walstreet and contributors get honest, I will have to learn to trade the markets all over again. Please run an article describing systemic risk of the MM’s when the DTCC finally has to disclose all the phantom shares.


  30. Dear Ms. Reitz and Mr. Serwer,

    I am a Fortune reader and subscriber and encourage you to respond to Dr. Patrick Byrne’s emails of December 17 and 22. Your company’s credibility is at stake. I can only hope that you are researching these matters and will be responding soon. The press plays a very important role in our society and Fortune has a leadership role in the financial press. Please expect as much of Fortune as you do of the many companies you cover. The way you respond to serious issue and allegations by current or former reporters will define your culture and future influence. Readers, reporters, coworkers, and other constituents are watching now or will later learn of your response to these issues and Dr. Byrne’s inquiries.


    Glen Rollins

  31. Dear Mr. Serwer and Ms. Reitz,

    Dr. Patrick Byrne has contacted you about the integrity of your magazine – specifically Bethany McLean’s relationship with Rocker Partners – and as a subscriber to Fortune, I politely demand a response from you on the subject.

    It would appear through court records that you have a corrupt journalist on staff and as such, I want to know what you have done about this to protect the integrity of a magazine I have trusted in the past. I am going to cancel my subscription in 30 days if I have not seen public comment from you on this subject. In addition, I am forwarding this story to all of my colleagues, many of which have not seen Dr. Byrne’s article, and asking them to cancel any subscriptions they have with Fortune as well if you remain silent.

    I remind you, you have nothing without journalistic integrity, and it appears you are being reckless with respect to protecting that integrity. Should you decide to remain silent I will also write to the Board of Directors of Time Warner and put them on notice as well that you are breaching your fiduciary duty to shareholders to protect the value of your magazine.

    I await your prompt, public, reply on this issue.

  32. To: Katy Reitz and Andrew Serwer

    Please tell me Fortune Magazine does not condone its reporter participating in a illegal scheme, at the direction of a hedge fund, to drive down the price of a publicly traded company. Or better yet get your lawyers to issue a response, if that would be easier and ease your conscience.

    This is to add my voice in requesting you respond to Patrick Byrne in this matter set forth here.

    Happy New Year, Jimboyo

  33. As a very concerned citizen with a great deal to learn about the financial markets and who once relied on Fortune magazine to augment his quest for fair reporting and information, I must protest the tactics I have learned about a journalist in your employ who seemed to have aligned herself with a hedge fund to use her position to try to influence a downward drive in the price of a particular stock…As I understand it,this Crameresque ploy can only benefit those with short positions in that stock..It seems the negative press backfired and the value increased causing the hedge fund and the journalist embarrassment and who knows what else?( we can all take an educated gue$$) …..Can you tell me and your readers your position on “negative pressing” in conjunction with naked short selling and the profiteering that ensues as a result? …Do you believe a conflict of interest exists when any journalists story can affect the financial well being of the associates with whom they are affiliated ??I look forward to your reply and wish you a happy new year..Bill Collins,father of the Collins Quintuplets, as seen on OPRAH…

  34. You might see similarities between the FFH story and American Capital Strategies (symbol: ACAS). ACAS has been one of, if not the worst, performer in the S&P this past year. It spent a great deal of time oin the REG-SHO list, and is rumored to be in the crosshaors of Grenlight Capital/Einhorn. The bashing online is incessant.

  35. Sent to the two names at Fortune and to their “letters to the editor” link:

    Just a quick note to add to the plethora of condemnation of Fortune for the Bethany McLean debacle exposed in Deep Capture.

    How about an explanation? Or apology? Or investigation? Or some semblance of an attempt to legitimize your publication as anything other than another captured PR arm of criminal elements on Wall Street?

    I personally know many readers of Fortune who have now ceased buying the magazine and are boycotting the online version as well. Most have also contacted your advertisers (and CNN which links to you), just as I have done.

    Good day, and Happy New Year.

    xxx x’xxxxx

  36. Subject: Unfortunately, ten people died.
    To: [email protected]; [email protected]
    From: A Concerned Citizen

    Hello Modern Day Journalists,

    A group of us were sitting around the office the other day having a discussion about modern day journalism. What happened to it?

    “I remember covering a story in my younger days,” a gray haired friend started to say. He is in his mid-50s now. “There was a fire at a local mall. Ten people died. I wrote the article mentioning that fact but I put the word ‘unfortunately’ in front of it. ‘Unfortunately, ten people died.’ My editor struck the word ‘unfortunately’. He said it did not belong. Then he went into a big dissertation of how some of the deaths may not be considered unfortunate to some people.”

    Wow! Now there’s some extreme editorial comment. I would never stand for such, even if some of the ten were my worst enemies. At least the editor was trying to think of everyone.

    In today’s journalism, it appears positions are taken and once those positions are taken, all reporting is done honoring those positions. Friends, business relationships and personal philosophy dictate those sorts of things. No objective journalism is to be found. And now, with this scam and scheme DeepCapture has uncovered, journalism has dipped to a new low. The actual collusion of a journalist with a man, a former enforcement agent for the SEC, and a hedge fund company that can move the market, is appalling. I would think a publication would want to protect its reputation and speak out against such a thing.

    I was in on a conference call last week with a company that prints magazines. The purpose of the call was to discuss how we were going to handle the current economic disaster. One of the seasoned men at the firm said, “Quality of editorial content is what sells magazines.” I would think Fortune Magazine would want to address this damning situation and state that the desires of Bethany McLean and Rocker Partners are not the quality it stands for. Meanwhile, the conference call I mentioned was actually necessary because of the shenanigans of Bethany McLean and Rocker Partners. They really hurt our economy.

    Writers like Bethany McLean obviously aren’t thinking straight. People do stupid things for money. She neglected to think about the citizens with whom she shares this great country. Unfortunately, probably for some, we share many things: work places, grocery store aisles, the highway, apartment buildings, the economy and the stock market. I am sure if anyone interfered with Bethany’s space in the first four examples, she would elbow her way around to remind whoever, that she shares that space too. She and all financial journalists should think about that concerning the economy and the stock market. All they need to do is look at today’s economy to see what I mean.

    Oh, I can hear the Fortune Magazine people now, “It is for our subscribers. Our 866,859 paid subscribers!” No, sorry, influencing your subscribers and all the non-subcribers who happen upon your article defies even morals you would expect from others. We all share the stock market. We all share the economy. And if you think you make the rules, guess what? We tried it your way and look where we are today. No, thank you. You are wrong and you are even more wrong if you do not address this, immediately.

    Unfortunately yours,
    A Concerned Citizen

  37. Date: January 1, 2009 3:32:28 PM EST
    To: [email protected]
    Cc: [email protected]
    Subject: Deep Capture

    Mr. Serwer,

    I am not in the habit of writing letters such as this. However, due to recent events, I find that my disgust can no longer be contained and kept quiet.

    Based on my reading of the Deep Capture website (, as well as other publications that are critical of the American Financial press, I have been convinced that Fortune magazine has allowed its reporters to abuse the trust that your readers have given you. I feel that trust is further damaged by your refusal to answer direct questions about the actions of one of your reporters (Bethany McLean) and her now-exposed involvement with a short selling hedge fund. Furthermore, I am entirely convinced that the many of the unregulated hedge funds, with the complicity of their lapdogs in the financial media, have caused significant damage to the trust in our financial institutions and our system, simply for their own personal gain. Your refusal to publicly address these matters makes you equally culpable.

    I have been a subscriber to Fortune for many years. I can guarantee you this; if you continue to maintain your silence regarding this issue, I will cancel my subscription and make an annual contribution to the Deep Capture efforts instead.


    John B.
    Patterson, New York

  38. Dear Mr. Serwer & Ms. Reitz,

    I have become aware of disturbing circumstances surrounding Bethany McLean and the hedge fund formerly known as Rocker Partners. Patrick Byrne’s “Deep Capture” blog contains two emails that Patrick has forwarded to both of you with a series of questions.

    Will you be answering Patrick’s questions?



  39. I sent this blog to a few of my “friends”, here is one of several responses to Fortune..

    We who follow the trail of criminal activity and the amazing proclivity of the press and other media to support and protect the criminals that proliferate the equity markets should not be surprised at yet another demonstration of corruption, arrogance and complicity, this time by Fortune Magazine. Should be renamed mis-Fortune.
    We have become such an entangled and litigeous society that even an apology may invite a lawsuit. But Fortune knows how to correct their unfortunate position without exposure and their unwillingness to do so speaks volumes for their ethics and motives.
    Guido Volante

  40. Maybe a effort to let the companies that advertive with Fortune know how Fortune is covering for this stuff of destroying companies, harming their employees and shareholders in the process, and would get some of the advertizers to worry about when they might themselves become targets of the shorts.

    It might make them wonder when Fortune would allow a short-n-distort article to be done about their own company.

  41. Ron doc, now that is a terrific idea!!! We need to find out how to constructively go about this initiative!!!

  42. In Times like these (no-pun intended) as the working class is just getting creamed in the stock market could you please go to

    It appears that they have accused you guys/girls of front running a story for a hedge fund.

    As a former subscriber of Fortune I would renew my subscription if you could please answer these claims.

    Yours truly,


  43. Ron Doc Rocks, This is a great additional way to let our disatisfaction with the current state affairs be known. I would also suggest we need to develop a truth squad focusing and concentrating on companies that maybe considering going public…. I don’t think writing or calling your representatives works at all as they only have ears for those that pay them.

  44. Short Selling = betting against America (and Canada).

    Where else could one “borrow” equity with the hope it goes down in value immediately?

    There are simple economic answers to all these problems: why isn’t the cost of “borrowing” more than the spread when they “win” and America loses? If it goes down 6%, the “borrowing” fee is a mere 9%.

    Want to move offshore and not pay American taxes? No problem. We’ll just charge former-American companies three times the rate they would’ve paid if they stayed for all their new transactions in America.

  45. Dear Mr. Serwer and Ms. Reitz,

    Dr. Byrne has documented the very questionable, and probably illegal, actions of Bethany McLean and requested a response from you. In a court of law, pleading the 5th Amendment is an understandable strategy, whether guilty or innocent. In the court of public opinion, however, where we now reside, this is a very questionable tactic, especially with respect to a company who’s success depends upon it’s reputation and integrity. Why will you not defend your magazine?

    A very interested reader.

  46. Jan 3, 2009 11:15 AM

    Dear Mr. Serwer and Ms. Reitz,

    Please be so kind to answer Dr. Byrne’s request.

    With every best wish,

  47. Dear Andrew,

    I am writing regarding the allegations by Patrick Byrne ( and was curious if you would please reply to me to confirm or disconfirm these allegations. I like to give people the benefit of the doubt before I prove them guilty, so I would like to hear from your first before I prove Fortune guilty of the alleged.

    I have been a Fortune subscriber for many years and would hate to know that what I was reading was biased or in anyway misleading. If this allegation was true it would be a substantial hit to Fortune’s reputation so it would be great if you could please provide the truth good or bad (your conscience is calling!)
    I hope to hear from you soon,

    Thank you,

    Kyle Holmes

  48. Dear Katy,

    I am writing regarding the allegations by Patrick Byrne ( and was curious if you would please reply to me to confirm or disconfirm these allegations. I like to give people the benefit of the doubt before I prove them guilty, so I would like to hear from your first before I prove Time guilty of the alleged.

    I have been a Time subscriber for many years and would hate to know that what I was reading was biased or in anyway misleading. If this allegation was true it would be a substantial hit to Time’s reputation so it would be great if you could please provide the truth good or bad (your conscience is calling!)

    I hope to hear from you soon,

    Thank you,

    Kyle Holmes

  49. Well, we personally took a retirement hit in the stock fiasco and so did Fortune. Non-response is a response.
    Silence won’t keep you safe it just blackens your eye more. I can always keep my dollars under the mattress
    like my Grandmother during the depression and use the
    F magazine for kindling. F must stand for their $ortune.
    All you have is your reputation…

  50. Dear Patrick,

    I want to take the time & give you applause!! Wonderful! It is clear that there is good and evil in this world! I admire your courage to stand up for the right thing! I will never look at Fortune the same again! Matter of fact I don’t think I will be looking at it ever again!
    May God bless you Patrick.
    Sincerely a happy customer of Overstock,
    Melissa Sharp

  51. Patrick,

    Thank you for your fearless and tireless effort informing us of yet one more (apparently) condoned scam. I agree completely with Claudia’s “Non-response is a response”. I’m sending all of this to my respective (Texas) Congressmen. It will be interesting and possibly informative to see what responses I receive. In retrospect, I think I will buy one last issue of Fortune and personally email their prominent advertisers informing them that I will boycott their products as long as they continue to buy space in a publication that will not respond to such serious and possibly criminal allegations. I will also encourage everyone possible to do the same. Keep up the great work and thanks again.

    Jason Armstrong

  52. I have just read Patrick Byrne’s comments about the Hedge Fund and the reporter Bethany McLean’ stock manipulations. I am surprised that a magazine like Fortune has not responed to the allegations but as we have all noticed in the last few years the media has forgotten what the job of a journalist is. Fair and impartial are not part of their vocabulary any longer. Also we seem to have a monetary system that is too easy to manipulate evidenced by the fact that this reporter had no problem pulling off her scheme with her Hedge Fund friends.
    Shame on Fortune magazine.

  53. A soon to be accounting graduate, my Senior Capstone Project is a research study on the proliferation of corporate fraud. A recent report by the Association of Certified Fraud Examiners (AICPA) pegs the cost of fraud at 7% of annual revenues–a staggering figure, if you ask me. Shouldn’t iconic institutions such as Fortune magazine be at the forefront of business ethics? I believe answers to Mr. Byrne’s questions are in order, and after that you might want to look into a top-down integrity audit.

  54. dear Patrick, thanks and keep it coming, hopefully they will all go to jail. Please also read an interesting article published in this weeks Village Voice (Jan. 28-Feb.3, 2009) Vol. LIV No. 5 page 12 “Up in Smoke” by James Lieber regarding hedge funds and the $600 trillion mess they got us.

  55. Regarding Mr Byrnes expose of ms mclean’s perfidy to Fortune Magazine and your previously trusting and loyal readers ‘Keine antwort ist auch eine antwort’ (no answer is also an answer) it is hard to draw any conclusion other than you might yourselves have been involved in some way! her actions and (in the absence of any defense on your part) yours might be summed up in just a few words-offensive, amoral, unethical, mendicacious, prevaricating, stupid and possibly illegal. I can only assume that you have no defense or an explanation of the actions of ms Mclean,your magazine and its behaviour in this matter would have been forthcoming some time ago. Have you no honor, have you no sense of fairness, have you no decency? Casanova

  56. Greetings,
    I anxiously await the response to Mr. Byrnes’ inquiries regarding the relationship between Fortune magazine and Bethany McLean.
    Transparency is essential to restoring confidence in the market. If there has been some shenanigans going on, they should be brought to the light of day as soon as possible.
    Advertisements are clearly marked on the pages of Fortune. Perhaps readers could be alerted to biased “news” as well.
    Thank you, Pat Fox

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