Jerome Armstrong, the blogger who gave us MyDD and is a co-author of a recent book on “people power” with Markos Moulitsas of the Daily Kos, has agreed to pay nearly thirty thousand dollars to the Security and Exchange Commission over allegations “that Armstrong touted the stock of a software company, without disclosing that he was being paid to do so.”
Now, as we all know, sleaze and corruption are not unique to either side of the political spectrum. But Armstrong, Kos & their netroot cronies have made a big deal out of clean government (and they should). So this kind of allegation speaks even more deeply to their ethics, as it it would for anyone in that position.
Moreover, this behavior, if true, besmirches blogging in general, harming all of us who take this enterprise seriously as a criticism of the activities of mainstream media. Armstrong has been fined nearly thirty grand, while not admitting guilt. Here is the language from the litigation release:
The Final Judgment permanently enjoins Armstrong from future violations of Section 17(b) of the Securities of 1933. The Final Judgment further orders Armstrong to pay disgorgement in the amount of $5,832, prejudgment interest of $3,235, and a civil penalty of $20,000. Armstrong consented to the entry of the Final Judgment without admitting or denying the allegations of the Commission’s Complaint, except as to jurisdiction.
Hmm…. interesting. I know I wouldn’t so quickly give up that much money – and allow the subsequent besmirching of my reputation – if I hadn’t done something very wrong.
I’ll give Armstrong the benefit of the doubt for now. But he owes us all a complete and thorough explanation of how this came to be. Otherwise, he might as well quit blogging. He and his integrity are toast.
All those followers of Kos should be especially interested in this. I hope they don’t respond defensively, because if they do, the grounds for communication between intelligent Americans will be even worse than it is. How will we be able to take their pronouncements seriously?
UPDATE: Mickey Kaus has more, including details of the allegation. Kaus also calls for Armstrong to comment. I would add to that. Kos himself should say something. Otherwise some bright people are going to start asking all those candidates who showed up at the YearlyKos whether they’re square with this kind of stock manipulation. You can call that guilt by association, but Kos demands purity of just about everyone. You reap what you sow. As of now, the Netroots are rotting.
MORE: For those unfamiliar with the ins and outs of SEC regulations (who me?), David Horwich has written an interesting explanation of this situation for Pajamas.
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17 Comments
1. mikem:“All those followers of Kos should be especially interested in this.”
True, within their own ranks. But this has already passed as a ho-hum glitch as far as the MSM is concerned. Imagine top Republicans attending a grassroots conservative blogger conference whose co-founder has “pled guilty” to selling his opinion.
We would never hear the end of it.
I think bloggers have done a wonderful job, and expended a great deal of energy, in changing how we get news and opinion. But the fact is that the liberal MSM can just ignore a scandal and only the most outrageous will surface into general public knowledge.
Anybody ever find out what Kerry’s military discharge was before the Carter Amnesty upgrade? You know…Kerry, the guy who ran for Commander in Chief?
Aug 9, 2007 - 5:09 am 2. Sun-Tzu:Well, that would depend on how much Jerome Armstrong is worth, wouldn’t it?
$30K is a lot to you, and certainly to me, but perhaps it’s a drop in the bucket of Mr. Armstrong.
Being liberal and being rich are hardly at odds (just ask Mr. Soros).
Aug 9, 2007 - 6:39 am 3. BumperStickerist:This looks to be the ‘other shoe’ from the initial finding from last year. Tom Maguire had a wrap up – basically, Armstrong is precluded from defending himself and, iirc, if his friends rush to his defense, Armstrong gets screwed by the SEC.
Maguire’s post from last year:
http://justoneminute.typepad.com/main/2006/06/the_apprearance.html
Aug 9, 2007 - 6:47 am 4. Lem:For an inside look at how Jerome Arm(stock)strong may have arrived at such poor judgment all you have to do is look at the Yearly Kos / Jet Blue incident.
Someone at Jet donated 10 airline travel tickets to Yearly Kos conventioneers and apparently Kos started using the donation a political endorsement. Whereupon the CEO of Jet Blue sent a letter distancing the company from the political website and all the entanglement it could/would confer.
Here is Armstrong characterization of the letter at his website
“I can’t imagine a worse way to handle this than Jet Blue’s CEO backing out of the Yearly Kos event with a letter that characterizes Daily Kos as being a “hateful” website:
http://tinyurl.com/39z6cm (scroll down to Jet Blue on drugs)
“This joker clearly doesn’t understand he just pissed off millions of people. If I were running YearlyKos, I would promote their “sponsorship” even more, and say FU, sue us.”
“Anyway… no such thing as bad publicity.”
I wonder if he believes the FCC to be just more publicity.
Aug 9, 2007 - 6:59 am 5. Roger:No sale, bumperstickerist. Armstrong has a lot of ‘xplainin’ to do:
“The Commission’s Complaint, filed on April 14, 2003, alleged that beginning on March 6, 2000, Armstrong touted the stock of BluePoint Linux Software Corporation (”BluePoint”) by posting unsubstantiated, favorable buy recommendations on the Raging Bull internet site. Armstrong posted over eighty such recommendations during the first three weeks that the stock of BluePoint was publicly traded.”
And while we’re at it, Sun-Tzu, I will admit that in certain situations I too would swallow a thirty grand fine, but not – as I’m sure the real Sun-Tzu would acknowledge – in one where my public credibility was permanently besmirched. That’s the point, isn’t it?
Aug 9, 2007 - 7:09 am 6. Swen:You take their pronouncements seriously? Really?
Aug 9, 2007 - 7:12 am 7. Jeffersonian:Being liberal and being rich are hardly at odds (just ask Mr. Soros).
Mr. Soros isn’t exactly a poster boy for financial integrity either, having been convicted in France for insider trading and fine, as I recall, a couple million dollars or more.
Aug 9, 2007 - 7:14 am 8. Sun-Tzu:But, Roger, he is not admitting guilt. And therein, I think, is the key.
I suspect that Armstrong will, if pressed, say that this was a “cheap” way to avoid litigation and pressure, especially from what he will undoubtedly portry as a politically motivated, Bush-inspired investigation.
That he may well be like his counterpart George Soros, either in terms of wealth or in terms of integrity, will be left unsaid.
Aug 9, 2007 - 8:48 am 9. Lem:Armstrong bet the glass house.
There is no way the FCC has enough manpower to keep track of this kind of stuff. Somebody must have tipped them off.
If web journalists are bloggers what are web whistle blowers?
Aug 9, 2007 - 8:53 am 10. DirtCrashr:Silicon Valley, a hotbed of Democrats and Liberal politics, has regular financial scandals like the recent indictments on back-dated stock options and other irregularities ALL the time. The FCC does indeed keep a close watch, but seldom is the political affiliation of the business officers involved noted, likely because it’s a very Blue region and their affiliation is a simple, natural assumption…
Aug 9, 2007 - 9:35 am 11. Lem:Does this mean Armstrong switched from one of the two Americas
Aug 9, 2007 - 10:34 am 12. Lem:Chevron, Armstrong, Enron – how deep does it go
Aug 9, 2007 - 10:46 am 13. Lem:Ok, I’m going to lay it all out.
Armstrong’s wife went secretly to Nigeria on behalf of the CIA to gather pre-election intelligence. She found NO democrat could be linked to the purchase of uranium before the election. The White House lashed out and fired the DA’s that knew and now Chaney and Gonzales are leaking his wife secret identity.
Armstrong’s wife is a foreign secret blogger and is being outed by Chaney in retaliation for loosing the House and Senate.
The CIA wont even acknowledge when she blogged overseas, or that he even blogged at all. That’s why we have not heard about her, until Novak’s column told us about the domestic wiretap.
Apparently Tim Russert and other Washington insiders knew that she was a blogger but now deny neither ever reading her nor voting for her blog, ever.
Democrats are now calling for a special prosecutor.
Next stop
Aug 9, 2007 - 12:37 pm 14. obdilhnduh:Now, as we all know, sleaze and corruption are not unique to either side of the political spectrum. But Armstrong, Kos & their netroot cronies have made a big deal out of clean government (and they should). So this kind of allegation speaks even more deeply to their ethics, as it it would for anyone in that position.
THANK YOU for posting this. I can’t tell you how often this sort of thing has bothered me. I’m a Republican, and as sleazy and corrupt as they come. Insider trading isn’t the half of it. BUT I DON’T MAKE A BIG DEAL OUT OF CLEAN GOVERNMENT, unlike those self-righteous netroot loonies, and I’m sick and tired of people making a big deal out of allegations of my sleaze and corruption. Look, sleaze happens, and if it weren’t me it would be someone else. But at least I’m not a hypocrite about it. Sure, I talk about family values and stuff, but that’s just the price of admission and hardly anybody takes it seriously. I’m planning my second divorce and have a couple of good prospects for wife number three on the side, but what does that have to do with family values? And what do family values have to do with government corruption? In the GOP we don’t have any trouble keeping those ideas entirely distinct. As if opposing gay marriage would mean that I can’t line my pockets with a little taxpayer money! Absurd.
Thank you again for exposing the hypocrisy of the netroot loons.
Aug 9, 2007 - 2:36 pm 15. David:Now isn’t this an old scandal that has finally come to its endgame? If I am right the actual sleaze happened over a year ago.
Aug 9, 2007 - 5:13 pm 16. TomTom:The netroots are devoid of intellectual integrity. How can the demonstration of lack of moral integrity surprise? Armstrong is only the tip of the iceberg.
Aug 9, 2007 - 10:06 pm 17. Bostonian:The netroots are a very low life form, a kin to worms.
obdilhnduh,
Believe it or not, but it’s easy to tell that you’re a drive-by progressive.
I don’t know why you felt the need to lie about who you are.
Aug 10, 2007 - 4:38 pm