Bloomberg News editor-in-chief Matthew Winkler recently gave a talk to his reporters and editors about the dangers of using anonymous sources. He argued that sources without names or identification as to their authenticity undermine good journalism and hurt a reader’s belief in the accuracy of reporting.
Steve Cohen, the head of huge hedge fund SAC, may beat his dog. He may not be nice to his neighbors. He is, however, named almost every time there is a scandal or alleged scandal at his firm, even if a reporter is well aware the Cohen may have know nothing about the incident being covered. Reuters yesterday ran a lead paragraph which said “Add another name to the list of former staffers at Steven Cohen’s $13 billion hedge fund SAC Capital Advisors to draw scrutiny in a federal investigation into insider trading on Wall Street.” Cohen is barely mentioned in the rest of the article which covers potential insider trading actions against Ramesh Chakrapani and a former SAC employee Jonathan Hollander. Mentioning Cohen is not even based on an anonymous source.
Why is Cohen’s name at the top of the story? Almost certainly because he is one of the most well-known traders on Wall St. Readers are more likely to be drawn into the rest of the story because the presence of a famous person is “attached” to the story line.
Reputations are precious things and they are fragile. One day the world may find out that Cohan did something wrong as a trader or it may turn out that he has given his entire fortune to help feed the world’s hungry. He has nothing to do with insider trading investigations on Wall St. for the time being, at least not as far as Reuters knows.
Douglas A. McIntyre
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