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| Comment: From the Editor |
Talking the Talk
Matt Purdue
06/01/2007
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You would be surprised how freely people speak
to us—the media. I’ve been in this business for 20 years now, and I am
constantly amazed at how easy it is to get a source to open up. Over the past two decades, I’ve conducted
literally thousands of telephone interviews. They all begin in basically the
same manner: "Hello, this is Matt Purdue from (insert media outlet here). Do you
have a few minutes to talk?" Almost invariably, the source says yes, and away we
go.
Mind you, the vast majority of these contacts are cold calls.
Some of them are set up by intermediaries, but most are simply one human being
(if you will allow me to expand the term to include journalists) calling
another. Usually, I’m someone the source has never heard of, calling to discuss
some matter of import with the full intention of making our conversation public yet I’m almost never turned away.
Script writers like to dramatize this interaction, with sources
screaming, "No comment!" into the phone and slamming down the receiver. But I
can count on one hand the number of times someone has actually uttered those
words to me. If a source is acting guarded, he or she will say, "I can’t really
talk about x right now." So, in all honesty, it’s my job to get them to
discuss, if not x, then x-y.
If a source won’t even come near to talking about
x,
we usually begin a delicate dance of thrust and parry, parry and thrust. I try
to obtain the most information possible for my readers, while the source
attempts to reveal just enough to be interesting without giving away any
secrets. It’s the way journalism works.
So you might imagine my frustration with the federal government
telling me what I can and can’t discuss with sources. I’m referring specifically
to SEC rules restricting the way private hedge funds advertise and market
themselves. In short, hedge funds can only promote themselves to investors (both
individual and institutional) with which they have a preexisting
relationship.
Clearly this means no flashing billboards in Times Square and
no topiary tie-ins with Edward Scissorhands as celebrity spokesmodel. But it
also chills what hedge fund principals will say in public and to media. This
month’s cover story focuses on some of the VIPs who have recently stepped into
the alternative investment sector: names like Madeleine Albright, CNBC anchor
Ron Insana and former SEC chairman Richard Breeden.
But, truth be told, they would not talk to us. We tried
multiple times to get to every "celebrity" hedge fund executive we could find,
and all of them declined interviews. One of them even agreed to our interview
and set up a conference call for noon. A little after noon, we received an email
from his "people" telling us that his lawyers had advised him against talking
with Worth for fear of overstepping the SEC’s
bounds.
So what journalists like us are left with are rumors, reports
based on other reports and read-between-the-lines analyses of lectures given by
these hedge fund principals. How are investors served by frightening fund
managers to the point where they refuse to talk with the press? There’s a reason
the First Amendment was written as it was—to give the Fourth Estate the freedom
to represent the people as a check against abuses of power. Certainly our system
is far from perfect, but why should government regulations be so authoritarian
as to terrify Albright away from telling me how she intends to invest more than
$300 million of Dutch pensioners’ money? Now that strategy should be on a billboard
in Times Square—or maybe Amsterdam.
An interesting nugget unearthed during our reporting on this
story is a tidbit we got on deep background from one source: The SEC reads
Worth to find out what fund managers are saying in public. Well,
Chris Cox, if you have a minute, give me a call:
212.230.0200.
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