Week in and week out, InvestmentNews uses this space and the Monday Morning column to challenge financial services firms and their leaders to do what is in the best interests of the investor.
We sound the alarm when a business or an individual does something unethical. We call for fair play and bring to light when a financial services firm delivers a black eye to the industry.
We take very seriously the role we play in covering the financial advisory business. Therefore, we would be remiss if we didn’t discuss a black eye that recently was dealt to our own profession.
It is a given that the financial services industry is all about the investor, and it’s also a fact that journalism is all about the reader.
Reporters and editors of business publications and news services can earn the respect and trust of readers only by being fair and accurate in reporting the news. Above all, journalists need to remain objective in news coverage.
So one has to wonder what readers of MarketWatch now are thinking, in light of the news that a highly touted columnist, Bambi Francisco, resigned following scrutiny of whether she breached ethical guidelines. MarketWatch is a financial-news website operated by Dow Jones & Co. Inc., the publisher of The Wall Street Journal.
Ms. Francisco, who covered Silicon Valley, regularly appeared in video reports for MarketWatch and also wrote a blog for the website. She also founded vator.tv, a video website designed to link entrepreneurs with venture capitalists.
Here’s the problem: How can a journalist be allowed to cover Silicon Valley when she has investments in a web concern that deals with Internet startups?
It is common practice for business publications and news services to forbid employees to invest in companies and industries about which they write. It’s all about transparency, which translates to objective reporting.
Although Dow Jones officials said that such a policy exists at MarketWatch, there obviously was a failure to supervise Ms. Francisco.
She said she founded vator.tv to help her “vet startup” pitches and to give her exposure to those firms she invariably overlooked as a columnist. This clearly was a conflict of interest, as Ms. Francisco spent a great deal of time interviewing chief executives of Internet startups for her column.
However, MarketWatch editor in chief David Callaway confirmed in published reports that Ms. Francisco’s investment in vator.tv was approved on the condition that she “not write about the company, its investors or the companies using vator.tv.” Despite the established guidelines, it has been confirmed that Ms. Francisco wrote a variety of stories on the MarketWatch site that violated Mr. Callaway’s stipulations.
Additionally, a main partner and financial backer of her business is venture capitalist Peter Thiel, the co-founder of San Jose, Calif.-based PayPal. Ms. Francisco’s news coverage at MarketWatch several times has mentioned both Mr. Thiel and some of the various technology companies in which he has made investments or that he advises.
It simply was bad judgment to allow Ms. Francisco to continue to write about Silicon Valley.
The executives at MarketWatch should have avoided such situations for the good of the reader. Such conflicts could influence the way a journalist covers a story.
In the name of editorial integrity, Ms. Francisco and her bosses never should have allowed themselves to be placed in such a precarious situation. She should have been removed from the Silicon Valley beat, which could have eliminated any and all conflicts of interest.
Meanwhile, the corporate speak was delivered by L. Gordon Crovitz, publisher of The Wall Street Journal and executive vice president of Dow Jones.
“Dow Jones demands the highest journalism standards at our own publications and services, as reflected by our strict code of conduct,” he said in a prepared statement. “Our MarketWatch reporter Bambi Francisco started vator.tv on her own time with our approval, under certain guidelines on permitted areas of coverage. Bambi has decided to pursue her enterprise full time.”
Let’s hope that MarketWatch executives learned a lesson and in the future will enforce the “strict code of conduct” it sets.
Readers need to have a comfort level in that what they are reading is fair, accurate and, above all, objective. Nothing less should be expected.
