Veteran business journalist Thom Calandra resigned as chief commentator for online financial news publisher MarketWatch.com Inc. Thursday, prodded by an informal regulatory inquiry into stock trades dating back to late 2002.
Calandra submitted his resignation after missing a Wednesday deadline to submit his trading records to MarketWatch, which began its own internal investigation after learning of the Securities and Exchange Commission’s probe, said Larry Kramer, the San Francisco-based company’s chief executive officer.
MarketWatch, which isn’t a part of the SEC inquiry, had planned to turn the records over to the securities regulators.
“I’m upset about it,” Kramer said of Calandra’s decision to withhold his records. “I can’t possibly imagine what this is all about. (Thom) is in the midst of his own legal strategy now.”
Calandra decided it was best to leave MarketWatch because he is “under enormous stress,” said Dana Welch, his San Francisco attorney. The SEC notified Calandra of the informal inquiry last month, seeking information on his stock investments beginning in October 2002. Welch said the SEC hasn’t provided further details about the nature of its inquiry.
Helane Morrison, the SEC’s district administrator in San Francisco, declined to comment Thursday on the Calandra inquiry.
The inquiry may cast a spotlight on another seamy side of scandal-ridden corporate America by focusing more attention on the conflicts of interest that occasionally emerge in business journalism.
Many reporters and columnists who cover companies with publicly traded stocks can influence markets with the stories they write and even learn of material information before it’s generally known. To minimize conflicts, much of the major media impose rules prohibiting reporters and columnists from directly owning stocks in companies that they regularly write about.
MarketWatch’s policies includes this restriction. In the instances that MarketWatch reporters are assigned to write about a company in which they own stock, they can’t trade their holdings for the first 48 hours after the story is published.
Calandra was treated slightly differently because he was a commentator who had been writing a newsletter for the past nine months. MarketWatch required him to disclose his financial interests at the end of his columns — something that he seemed to do consistently, Kramer said.
“He has always had great integrity,” said Kramer, who first hired Calandra as a business columnist at the San Francisco Examiner during the 1980s. “He’s a reporter’s reporter. What he wrote wasn’t just opinion; it was intensively reported. If you had followed his advice in the newsletter, you would have made a lot of money.”
Calandra was among MarketWatch’s original employees, becoming the Web site’s editor-in-chief in 1997 and later was promoted to executive vice president of news. Before joining MarketWatch, Calandra had worked as a European financial columnist for Bloomberg News and was the financial editor of USA Today’s online edition.
Calandra stepped down as MarketWatch’s top news executive in 2000 to work on FT MartketWatch in Europe before returning as a columnist in 2002, Kramer said.
MarketWatch paid Calandra $154,168 in 1999, the last time the company disclosed his compensation. At that time, Calandra also held 50,000 MarketWatch stock options with an exercise price of $4 per share.
Like many Internet businesses, MarketWatch’s stock plunged in the dot-com crash, but has been regaining value in the past year. MarketWatch’s shares fell $1.03 Thursday to close at $9.90 on the Nasdaq Stock Market.