Money Magazine Puts Dorfman on Temporary Leave After Investigation Report
NEW YORK (AP) _ Money magazine put columnist Dan Dorfman on indefinite leave Friday after a report that federal authorities are investigating the stock market handicapper’s relationship to a stock promoter.
But the cable network CNBC continued to run Dorfman’s daily market commentaries, saying it has no reason to believe he violated its ethical standards or any laws.
Business Week magazine, citing unidentified sources, reported Thursday that Dorfman and Donald Kessler are under investigation for insider trading, wire and mail fraud and other violations of securities law.
The magazine said Kessler, of West Babylon, N.Y., is a regular source of tips for Dorfman. It said that while it turned up no evidence that Kessler compensates Dorfman, their relationship is at the heart of the inquiry by the U.S. attorney in New York City.
Dorfman missed his usual live midday report Friday on CNBC because he couldn’t use the Money offices where he normally does the three-minute TV spots, but he appeared at midafternoon from the network’s New York studio, dismissing the report of investigations as ``rubbish.′
``I can assure every single viewer out there that I have nothing to hide. I have done nothing wrong and I have nothing to be ashamed of. You have my word on that,″ he said on the air. A day earlier, he said he has not traded stocks for more than five years.
Dorfman did not respond to a request for comment relayed through CNBC. The U.S. attorney’s office declined comment. Calls to Kessler’s home were not answered. The Securities and Exchange Commission declined comment.
Dorfman, 63, is a veteran financial reporter who has written for The Wall Street Journal, New York magazine and Esquire and is reported to earn about $900,000 a year.
His TV reports are delivered in shirt sleeves at a rapid-fire pace, and his comments on a company’s financial outlook or rumored deals can cause wide swings in stock prices.
His ``success and market impact is something that has been looked at closely. Certainly there is a noticeable and observable market impact,″ said a top regulatory official who spoke on condition of anonymity.
Earlier this month, the Chicago Board Options Exchange asked regulators to approve a brief suspension of computerized options trading when the market erupts after reports by TV analysts like Dorfman.
Money spokeswoman Patti Straus said the decision for Dorfman to go on leave was by mutual agreement and he will continue to get paid.
``I continue to believe that Dan Dorfman has not violated any laws,″ said Frank Lalli, Money’s managing editor. ``Nonetheless, I have agreed to a temporary leave of absence for him, effective immediately, so that he can address issues raised by the Business Week article.″
Lalli said he asked Time Inc.’s general counsel investigate. Time Inc. is the publishing division of Time Warner Inc. that owns Money magazine.
Dorfman has been writing a column for the monthly magazine since January, and previously wrote a column for USA Today.
CNBC said it believes Dorfman has observed the ``strict ethical standards″ it imposes on its reporters but would scrutinize the allegations.