Anonymous and deliberate news leaks have garnered significant media attention as of late, and beg the question as to the individuals, institutions—and motivations—behind releasing proprietary information to journalists.
On June 29, 2015, Business Insider ran a story about ride-sharing company Uber’s financial standing based on a press leak. The lead paragraph reported the company’s performance was “shakier than previous reports suggested, based on leaked numbers reported by Bloomberg.” The Bloomberg piece drew on information culled from a “term sheet viewed by Bloomberg News,” and cited information provided to the journalist by “a source familiar with the situation.” An Uber spokesperson rightly pointed out the leaked document referenced was incomplete and missing contextual data—e.g. it was unclear if the financials were drawn from a single quarter, a year, or another timeframe all together.
While this was not the company’s only information breach—in 2013, both Valleywag and TechCrunch released leaked screenshots of Uber’s dashboard—it was perhaps the most damaging, since it called into question the company’s valuation. Further, because Uber has been under attack for a variety of practices, the identity of the person who leaked the above-cited information becomes incredibly hard to pinpoint. In corporate cases, disgruntled employees are often the source of data leaks to the press. The question then becomes: What is to be done about it?
After BuzzFeed experienced multiple employee leaks to the Wall Street Journal, the company’s chief of staff Ashley McCollum distributed a memo that said, in part: “Anonymously tipping a reporter to something a colleague says in a meeting isn’t a violation of business or journalist ethics. It’s an issue of personal ethics.” McCollum closed the memo by reminding employees that breaching confidences is “something you can get fired for.”
But what happens when deliberate leaks by unattributed sources exceed the realm of personal ethics and individual accountability, and are the power play of major institutions?
Hedge fund manger and founder of SAC Capital Advisors Steve Cohen was the subject of a powerful leak campaign that was almost certainly, reporters opined, made by reigning authorities.
For years, Cohen and SAC executives were under fire from government officials and financial regulators—primarily the Securities and Exchange Commission—for suspicion of insider trading. “Will The Feds Try to Kill SAC Capital?” a lengthy New Yorker piece asked in a June 4, 2013 feature. The headlining question was raised by media stories that appeared, per the New Yorker, “to have resulted from deliberate leaks” that would have enabled the government to go after SAC on a racketeering indictment instead of going after Cohen personally. The story noted: “When the government wants to put a company out of business, the racketeering code, which was originally designed to deal with the Mafia, is its nuclear option.”
This is precisely what happened when then-U.S. Attorney for the Southern District of New York, Rudy Giuliani, threatened to bring RICO charges against Michael Milken’s Drexel Burnham Lambert. Milken ultimately pled guilty to securities and reporting violations, but not to racketeering or insider trading. Similarly, SAC Capital pled guilty to charges waged by the SEC for failing to prevent insider trading and paid a handsome fine of $1.2 billion. And while eight SAC employees were found guilty of insider trading, Cohen was never among those charged. The concerned public is right to ask: Who, if not the feds or the courts seeking a RICO win, leaked confidential SAC information to the press that lent so nicely to a racketeering case?
Instances such as these can make today’s journalists seem like little more than source-protecting political anglers, rather than truth-seeking investigators. One of the main problems is that journalists are lending sources too much liberty when it comes to promising anonymity—a viewpoint held by many, according to Fred Brown of the Society of Professional Journalists. Brown noted in an ethics case study that “more and more mainstream media outlets are adopting strict rules about confidential sources; more and more are trying to discourage it. And some are saying also that reporters should warn sources that, depending on the situation, there may come a time when it’s necessary to reconsider the promise, or to renegotiate it.”