A few points:

1. He's readily admitting that he intends to profit from the research he is doing. That transaprency is unique.

2. He's removing the potential for conflict of interest.

3. Many people believe there is a need for this and that is probably all that matters.

Here's my half-joking take on it: I think Mark had a huge amount of fun (and likely made a fair amount of change, although that is less important for him) baiting and attacking Patrick Byrne of Overstock.com, and so this is his way of finding other targets to go after -- like skeet shooting.

John,

Such transparency may be unique, but it's not journalism. The objective of journalism is to make money while serving the reader, not to make money while serving oneself. It is the reason that most newspapers prohibit their biz reporters from investing in the companies they cover.
As for conflict, he is only increasing it. Writers will be asked to find fraud, let Cuban short those stocks and then report it. What if they learn positive info about a company Cuban has shorted. Will there be pressure to hold off on publishing? I don't know, but it is certainly grounds for conflict.

I would agree with and expand on Dan's comment:

it's not journalism... as we know it today.

But it could be one example of how new, specialized services displace mainstream suppliers of news by providing more timely, more valuable and more compelling information.

It also looks frought with legal issues. Risk of market manipulation, etc.

Mike
www.OnDisruption.com

Paul, though we don't have all the details yet, I see great potential value here. If nothing else, you'll have some CEO's re-considering their actions in order to avoid becoming front-page news on Stocksleuth and fodder for Cuban.

This is exactly what the web is supposed to do.

Best,
George

Dan,

As a reader it doesn't matter to me if it fits into the traditional definition of journalism. I really just want transparency and I'm not getting it from the current model.

To your other point: Who is worried about a company hiding positive news? I thought that is what they paid the analysts to do?

I think there's also a gloss of "Get people to work for free" - that's a hot area. If you can convince insiders to send in tips for the joy and happiness of it, that's quite interesting. It's unclear how well it'll work though.

I'm glad to see the discussion about Sharesleuth.com on this forum.

I'd like to note that my primary aims for the site are to expose fraud and corporate wrongdoing, build an audience through unique, compelling stories and generate multimedia content for other outlets, such as Mark Cuban's HDNet.

Our stories will include links to documents, photographs and other evidence we turn up in our reporting, which to my mind constitutes greater transparency that most newspapers and Internet news sites currently offer.

I'll pursue stories based on their potential public impact and journalistic merit. In my more than two decades as a business journalist, I've never owned shares in individual companies, and I intend to continue that policy while running Sharesleuth.com.

I agree that journalism's ideal role is to serve the public interest, without fear or favor, or concern for private gain. But what happens when newspapers and other traditional journalism outlets abdicate their historical watchdog role and largely ignore financial fraud, corporate malfeasance and other vital issues?

Who's going to finance an alternative outlet for those investigative reports, which tend to be costly and time consuming? Subscribers? Non-profit foundations? Wealthy benefactors? Armies of individual donors?

Please share your thoughts.

Hi Chris,

Best of luck with your new venture. I'm rooting for you.

I did have one question about your comment. Why would you avoid taking positions in the companies you are investigating? Are the reports incorrect that have reported the Cuban intends to profit from trading in companies you report on? Why confuse the issue with a mixed message that says the journalist doesn't own positions, but Cuban will?

Jon,

Some of the media reports gave the impression that Mark Cuban hired me to dig up dirt on companies so that he could profit by shorting their stocks.

Actually, I pitched the idea of a fraud site to Cuban. He agreed to finance the venture, partly on the condition that he could trade on the information we uncover. But his ambitions for Sharesleuth.com are much bigger than that, and given his vision and track record, I decided that I could get comfortable with the trading, which will be legal and fully disclosed.

I'm not sure how that trading will work, but I do know that a fair number of the stocks we will mention in our reports will be impossible to short, too risky to short or not worth shorting.

I'm going to avoid taking positions in stocks because I don't want to give our inevitable detractors any additional ammunition; because it would be a distraction from my reporting; and because I don't see any need to change the system that's served me well for years.

So, you - relatively small amount of investment capital, I assume (no offense) won't be trading on the info. But Cuban - *huge* amounts of investment capital - will, correct?

Umm, I don't exactly find that very reassuring. Basically, the money you can make on the trades isn't worth the cloud on your reputation. But Cuban can make a lot more money on it, and doesn't have a journalistic reputation to protect for himself.

OK, not every lead or every story is going to be a trade. Got it. Trades aren't intended as the main profit center, got it (they're too unpredictable?). But still, it does seem that it's envisioned as a lucractive sideline, a nice little bonus.

It is really so much less of a conflict that you're not trading the stocks, if the guy who funds the project, and pays you, is trading the stocks? (and this seems like a classic case where disclosure is not a remedy for the conflict, here it seems almost an excuse).

Chris:

Please tell us more about:

1. Your background;

2. And any stories you have worked on, broke, or read (written by others) that are examples of what you aspire to for ShareSleuth?

Mike
www.OnDisruption.com

Here's a link to a series of articles that should give you a sense of stories that will appear on Sharesleuth.com

www.stltoday.com/stockfraud

Good stuff, thanks Chris.

I remember reading some of those boiler-room stories online a year back or so, about the fake Birchtree operation etc. It is fascinating stuff.

Mike

Jon- you asked Chris if he would be taking positions in the companies on which he reported AFTER he said he would continue his policy of never owning shares of individual stocks and continuing that policy while at Sharesleuth?