CNBC Disclosure Stirs Ethics Debate in Business Media

aria Bartiromo, the stock-market reporter and anchorwoman for CNBC, opened her hourlong television interview earlier this month with Sanford I. Weill, the chief executive of Citigroup, with an unusual disclosure. She told viewers that she owned 1,000 shares of Citigroup stock, then worth about $45,000.

Neither Ms. Bartiromo nor her supervisors thought her stake in Citigroup should disqualify her from questioning Mr. Weill about the company's future and his decision to step down as chief executive at year-end. Amy Zelvin, a spokeswoman for CNBC, said Ms. Bartiromo had abided by the network's policies, which Ms. Zelvin said were intended to ensure "compliance with the highest ethical standards."

Ms. Bartiromo's revelation highlighted an issue that has divided financial journalism. Many business news organizations — including The Wall Street Journal, BusinessWeek and Forbes — say that they forbid reporters from covering companies in which they have investments.

CNN, one of CNBC's cable-news competitors, says it tries to avoid such conflicts.

Sarah Cohn, a spokeswoman for CNN in New York, read a prepared statement that said: "We take active measures to avoid putting our staff in the position of reporting on companies in which they have a meaningful stake. Therefore, it would be highly unusual for any on-air disclosure to be necessary."

That position is supported by many experts on journalism ethics. "It's not to suggest that Maria is unethical, but it certainly leaves open concerns that a conflict of interest exists," said Robert M. Steele, the senior faculty and ethics group leader at the Poynter Institute in St. Petersburg, Fla., a nonprofit organization that studies the news media. "Disclosure doesn't resolve a conflict of interest; all it does is reveal that a conflict exists."

But not all business-news executives take such a firm stand. Some, like those at Fortune magazine and Fox News, as well as at CNBC, argue that disclosure usually solves the problem of an apparent conflict.

CNBC said that its policies require disclosure of stock ownership during on-air discussions about companies that involve more than passing mention. Among other things, the policies also prohibit reporters and anchors from holding stocks for short periods of time or from selling shares of companies soon after reporting on them.

Ms. Bartiromo's disclosure was not a first for a CNBC anchor, Ms. Zelvin said. But she declined to provide any details other than to say that Ted David, a co-anchor of the network's late morning program, had made at least one stock disclosure on the air. Mr. David did not respond to a request for comment.

In an e-mail message, Ms. Bartiromo, whose frequent reports from the floor of the New York Stock Exchange are closely watched by traders, said, "I don't own many stocks, but the few I do are always disclosed." Through Ms. Zelvin, she declined to say which stocks she owned or what disclosures she had made.

Mark Haines, David Faber and Joe Kernen, who appear daily in the morning on CNBC's "Squawk Box," did not reply to e-mail seeking comment. Ms. Zelvin said all three declined to comment.

Asked whether any of the three had disclosed stock holdings on screen, Ms. Zelvin replied: "If they had anything to disclose, they would disclose it."

David Friend, a senior vice president at CNBC, would not discuss how the network handles conflicts of interest or why its policies differ from those news organizations that impose a more restrictive standard.

Mr. Steele and Al Tompkins, who also teaches ethics courses at Poynter, said they favored the strict guidelines on stock holdings that The Wall Street Journal has for its reporters. In short, they said, reporters should not invest in companies that they cover or might have to write about.

A spokeswoman for Dow Jones & Company, The Journal's owner, supplied a copy of its code of ethics, which is posted on the company's Web site and observed by the newspaper.

Mr. Tompkins suggested that CNBC should have assigned a reporter who was not a shareholder to interview Mr. Weill. Some conflicts may be unavoidable, he said, like reporting on one's own company, but Ms. Bartiromo's conflict was not such a case.

The New York Times, like The Journal, BusinessWeek and Forbes, prohibits reporters from investing in companies they regularly cover and bars reporters from writing about companies whose shares they own.

Glenn Kramon, business editor of The Times, said that a reporter who owned 1,000 shares of Citigroup would not have been allowed to conduct The Times's interview with Mr. Weill that resulted in a front-page article on July 17.

Stephen Shepard, BusinessWeek's editor in chief, said that under his magazine's ethics code, "you are not allowed to own stock in any company that you write about."

At Forbes, its editor, William Baldwin, said the policy he wrote for the magazine's editorial staff "explicitly prohibits" reporters from writing about any company whose shares they, their spouses or children own. Reporters are also prohibited from writing about companies that employ their spouses.

But Rik Kirkland, managing editor of Fortune, said he did not consider all stock holdings, especially those held for more than six months, to present insurmountable conflicts. As an example, he cited a May 2000 cover story about Cisco Systems written by Andrew Serwer. In the article, which was quite bullish about Cisco's prospects, Mr. Serwer disclosed that he owned, at the time, "several hundred" shares of the company. Each of those shares was worth about $60 then and is worth about $19 now.

Could Mr. Serwer write a cover story about Citigroup if he owned 1,000 shares? Mr. Kirkland said his answer would depend on when Mr. Serwer had acquired the shares and whether they represented a significant portion of his net worth.

CNBC declined to discuss what the dollar threshold was for an investment that would require a reporter to disclose it on the air, or to discuss whether there was a threshold beyond which a reporter's investment would bar the reporter from covering a company.

Fox News allows its journalists to own shares in companies they report on. Neil Cavuto, vice president for business news at Fox News and anchor of its business-news program "Your World With Cavuto," said, "I don't necessarily fault Maria for having a position in a company" as long as it was disclosed. He said that he had disclosed on the air that he owned shares of I.B.M.

"I don't subscribe to the view that you don't invest in the markets at all," Mr. Cavuto said. "I think they sharpen your focus, and you learn from them."

Reporters at Fox News are expected to disclose to viewers any conflicts of interest they might have but are left to decide whether to recuse themselves from covering companies whose shares they own, Mr. Cavuto said. He said that the only time he had recused himself in 20 years of reporting involved a small company in which his stake was so large that he thought it disqualified him. He declined to discuss the details.

Mr. Shepard, the BusinessWeek editor, disagreed that having "skin in the game" enhances the insights of financial reporters. If personal involvement were a prerequisite for covering a subject, he said, only soldiers could cover wars and only astronauts could report on the space program.

Given that the money honey is both wealthy in her own right (having literally worked her way to the top of her field), and married to a (very rich)Steinberg, the $45 grand in Citi stock she owns means as much to her as my lunch money means to me.

She gave the disclosure. The ethics problem would have been doing the interview while owning the stock but **NOT** giving full disclosure.

But it doesn't surprise me that the NY Times is having trouble with this sort of issue...

Maria is quite the hottie!!!! anyone have any pictures of her?

And, someone who worked her ass off to get where she is. I don't know why people are questioning this. She's also got far too much to lose playing the pump and dump game.

this is the best thing she's done of late. Her daily commentary from the floor usually consists of the kind of useless conventional wisdom. When she subs for Brian Williams or tries to take on any subjects outside financials, beware, she quickly exposes herself as one of the truly stupidest individuals walking this earth and one whose grasp of issues is limited to the mere basics of pure liberal propaganda. Therefore her on-air appearances are usually near totally worthless. The interview with Sandy Weill, however, was pretty good and her disclosure was up front and more than appropriate. After all, why is it these same folks have no problem when she appears on the "news" and parrots liberal lines without any seeming appearance of a functioning brain without disclosing she's a die-hard liberal groupie?

She's a face. I don't treat her as a serious journalist though. But, having heard some of her work history she has put the time in to make herself into a successful TV personality which again, is different than a journalist. CNBC has some good people on its business programs though.

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