Daily Kos Hid Business Partner's SEC Lawsuit

This story has been updated:

• Blogger Jerome Armstrong Settles Stock-Touting Suit with SEC

In April 2003, the Securities and Exchange Commission filed suit against Jerome Armstrong, the business partner of Daily Kos founder Markos Moulitsas Zuniga, for touting a Linux company called BluePoint when it first went public:

On March 6, 2000 and after, Jerome Armstrong ("Armstrong") promoted BluePoint on the Raging Bull internet site, which carried hundreds of posts about BluePoint. ...

Armstrong posted over eighty times on the BluePoint message board located on the Raging Bull website in the first three weeks. He praised BluePoint's investment value and encouraged traders who were having trouble getting their orders filled to keep trying. Armstrong never stated in his posts on the Internet that he was being compensated for making the postings. However, Goelo and Markow compensated Armstrong by transferring stock in three separate companies to Armstrong at below market prices during the relevant time period. ...

Armstrong made at least $20,000 from selling the shares of the three securities he received from Markow and Goelo.

The New York Post reported that Armstrong settled the case in December 2003 without admitting guilt and paid no fine. The paper claims to have found numerous online posts from 1999 to 2003 where he supported stocks that are "virtually or entirely worthless" today.

After the story broke, Moultisas encouraged some prominent liberal bloggers to ignore the story on a private mailing list post that was reprinted by New Republic blogger Jason Zengerle:

... Jerome's case, if it could be aired out, is a non-story (he was a poor grad student at the time so he settled because he had no money). Jerome can't talk about it now since the case is not fully closed. But once it is, he'll go on the offensive. That should be a couple of months off. ...

My request to you guys is that you ignore this for now. It would make my life easier if we can confine the story. Then, once Jerome can speak and defend himself, then I'll go on the offensive (which is when I would file any lawsuits) and anyone can pile on. If any of us blog on this right now, we fuel the story. Let's starve it of oxygen. And without the "he said, she said" element to the story, you know political journalists are paralyzed into inaction.

Zengerle suggests in a followup that the members of the Liberal Blog Advertising Network have a financial motivation not to publicize this scandal, since the network's run by Armstrong and Moulitsas with MyDD founder Chris Bowers. Zengerle links to my own experience being ousted from the network last November, which appears to have resulted in a dramatic decline in ad sales on the Drudge Retort.

I hope this looks worse than it is, but on its face, Armstrong behaved reprehensibly and Moultisas won't own up to it. Investors lost millions on dubious Internet stocks like BluePoint during the dot-com boom, and Armstrong allowed himself to become one of the famous blogging wunderkinds of the Howard Dean campaign while he was under active SEC investigation.

Did either of them consider how it would have looked, while Dean was the early favorite for the Democratic presidential nomination, if this SEC case came to light in the press? I think the people who associate themselves with a candidate have a responsibility not to engage in any conduct that might hurt the campaign, and a victory-minded activist like Moultisas had to know the risk they was taking. Were Dean or campaign manager Joe Trippi told about this investigation in 2003?

Instead of getting in front of this story by acknowledging a mistake, Moulitsas showed total ignorance of how the blogosphere works by pretending it would go away. Forced to respond, he then used the bully pulpit of Daily Kos to attack the New Republic without saying a word about Armstrong's SEC problems or their decision not to disclose the suit to the Kos readership for three years:

It is now beyond clear that the dying New Republic is mortally wounded and cornered, desperate for relevance. It has lost half its circulation since the blogs arrived on the scene and they no longer (thank heavens!) have a monopoly on progressive punditry. We have hit their bottom line, we are hitting their patron saint hard (Joe Lieberman) and this is how they respond. By going after the entire movement.

My personal view is colored by the fact that I wouldn't trust Bowers to tell the time. But I think the 85 bloggers in the Liberal Blog Advertising Network and popular Kos diarists need to take a hard look at these guys and how closely they want to be associated with them.

Politics has a tendency to attract people who put their own interests above party or principle when the money starts rolling in, as Tom DeLay and Jack Abramoff have ably demonstrated. I'd hate to see well-respected liberal bloggers like Joshua Marshall and Atrios burn too much capital in defense of Moulitsas.

Politics · 2006/06/22 · 32 COMMENTS · Link

Jason Douglas Joins RSS Advisory Board

Jason Douglas, the project lead on the RSS Platform at Yahoo and the cocreator of Channel Definition Format, has joined the RSS Advisory Board.

The board now has members from Google, Microsoft and Yahoo. If we can find a member from Apple's RSS team, we'll be in an even better position to help the big companies and enterpreneurial companies like FeedBurner and Six Apart work together to promote RSS interop and resolve some incompatibilities between different software that supports syndication.

Yahoo · Xml · Rss · Microsoft · Google · 2006/06/21 · 1 COMMENT · Link

That's the Reason I'm a Mavericks Fan

Sigh.

Dallas · Sports · 2006/06/21 · 9 COMMENTS · Link

Jacksonville's Year-Old Blogging Community (Est. 1998)

Today's Florida Times-Union has a front-page feature on the Jacksonville blogging community. I've been following local weblogs for seven years, so I was curious to see how many of our long-time bloggers were profiled.

Answer: None.

The story treats Joey Marchy's Urban Jacksonville as if it was the area's first blog:

Approaching its first anniversary, this is possibly the oldest ongoing blog in Jacksonville.

The piece missed all of the well-established Jacksonville bloggers who've been publishing for many years.

Joe Dougherty, an outspoken Jacksonville conservative who worked for years at a federal defense agency, began Attaboy in January 2003, where he puts an acerbic personal spin on current events and topics like the Jacksonville Jaguars. Quoted by Howard Kurtz in the Washington Post, Daugherty's takes on the 2004 presidential race never failed to irritate the hell out of me, and I mean that in the nicest way possible.

Dave Rogers, a retired Navy commander in Ponte Vedra Beach, started his Groundhog Day blog in 1999. A Mac devotee who made a first-day pilgrimage to the St. Johns Town Center Apple Store, Rogers offers a thoughtful mix of technology, philosophy and personal ruminations.

Todd Smith, who began SharkBitten in St. Augustine in 2003, take an off-the-beaten-path look at Americana music, an intriguing corner of the music world that gets no play on mainstream radio, and journals his newly formed band Doc Wheat.

Velociworld, launched by the pseudonymous Velociman in the same year, gives obscene and funny takes on the world as it looks from Fruit Cove. His endorsement of St. Johns Sheriff David Shoar in 2005 gives you a taste of what the site offers:

I met the Sheriff when he was campaigning last summer. Great guy. Stopped by the house, we chewed the fat for 45 minutes or so, I greased him a contribution. The incumbent wasn't running again, and this guy had a great resume.

Of course, we talked like many people in southern or rural areas talk. You make eye contact when you address each other, then you look down, at the ground, and spit in the grass, and rub it absent-mindedly with the toe of your shoe. As if to say, I enjoy your company, but not that much. I ain't gay, trucklehead! Talk, spit, rub. Had many a conversation doing that.

Local bloggers also include Kevin and Melissa Story, Jacksonville residents (until recently) who blogged his military enlistment, their marraige, the birth of their daughter and his recent deployment to the Middle East; OceanGuy's Somewhere on A1A; Jacksonville ER doc William Ernoehazy Jr.'s De Doc's Doings; Microsoft developer Andrew Connell's blog; and Jeff Miller's Catholic-themed Curt Jester. All of which have been around considerably longer than a year.

There's some ego at stake here, since my own eight-year-old Workbench was omitted in spite of creating an international incident with the Vatican last year and I'm the author of two books on blogging. But I hoped the local daily would eventually find out that a vibrant blogging community had sprung up here, and I'd like to see writers like Dougherty, Rogers and Smith get some recognition.

Shortly after I moved to Jacksonville in 1997, I began working from home and lost the opportunity to learn my way around the area from coworkers, so I sought out and began reading the local bloggers for their take on the area.

Seeing the Times-Union miss this community -- while giving props to precocious "we are the new media" newbies with sites launched as recently as April -- is the kind of agita-inducing media moment that drives a person to start his own blog.

Jacksonville · Florida · 2006/06/20 · 39 COMMENTS · Link

Your Illegal Alien is My Undocumented Immigrant

I'm not a journalist, but I play one on the Drudge Retort. Because I have the good fortune to live in an age where any idiot can break the news, I've been writing headlines and making story selections for the past couple years for an audience that's hitting 80,000 daily pageviews, helping me rationalize why I dumped my comp sci major in college, earned a bachelor of arts in journalism from the University of North Texas and then became a programmer and computer book author anyway. (Just when I thought that I was out they pull me back in.)

Some Retort readers object to a headline I gave an incredible Houston Chronicle story this weekend on immigrants so desperate to get here they cross the Arizona desert:

More than 200 migrants died in Arizona's desert borderlands in 2005. More than 100 have been found dead so far this year, Hoover said. And the peak killing season -- the scorching summer months when temperatures hit 110 and higher -- has only just begun.

Even with the humanitarians' supplies, the migrants' water almost always runs out. And without water in this desert, a person gets into very bad trouble, very quickly.

Sweat dries and saliva disappears. Moisture-deprived blood thickens in the veins and runs to the brain, trying to protect it. Dizziness, dementia, debilitating cramps. Water-deprived organs wither, cook inside the body, collapse.

They claim that the Retort headline, Arizona's Desert Kills Hundreds of Immigrants, has a word missing:

we are so politically correct that "illegal" while being a totally correct description is considered slanderous. It is a good point that the papers won't even call them illegals, call a duck a duck.

I left out the word because it seemed pretty honking obvious that legal immigrants aren't risking the most miserable death imaginable to get here. The Chronicle made the same decision.

Over the past 90 days, I've had to make this editorial judgment on the following stories:

• Conservative Catholic Senator Backs Immigrants
• 350,000 Rally for Immigrants in Dallas
• GOP Backs Off Immigrant Felony Plan
• Immigration Splits Catholics, GOP
• 'Day Without an Immigrant' Begins
• Grandma Fights Illegal Immigration
• Catch-and-Release Policy Lured Illegal Immigrants
• Immigrants Wary of Guest Worker Program
• Bush Wants Immigrants to 'Have Command' of English
• 1982 Ruling Opened Schools to Immigrants' Children
• Sweep Nets 2,100 Illegal Immigrants
• Arizona's Desert Kills Hundreds of Immigrants

Avoiding the terms "illegal alien" and "undocumented immigrant" is a no-brainer, since both are loaded phrases that clearly take sides. But the use of "illegal immigrants" all the time also feels like spin -- an effort to ensure that Americans differentiate between these law-breaking law breakers who break our laws and the millions of law-abiding immigrants who arrived by legal means (word to my great-grandmother).

One problem with their premise, as I see it, is that the line between legal and illegal immigration in this country is often as slim and capricious as wet foot/dry foot, a policy that gives ocean-crossing Cubans a swift path to citizenship if they touch foot on a Florida beach and deports them if they linger offshore for a little bodysurfing.

Last year, 15 Cubans reached land on an abandoned bridge piling in the Florida Keys, but were sent back when the island was kicked out of the United States.

... the American government concluded that because the piling holding the section of the bridge in which they disembarked was no longer connected to the mainland at either end, they had wet feet. As a result, they were all repatriated.

Looking over the Retort headlines, there's two that are short one word: "Immigrants Wary of Guest Worker Program" and "1982 Ruling Opened Schools to Immigrants' Children." Both apply only to undoc-, er, illegal immigrants and should have made that clear.

But as a general rule, I think it's more fair for headline writers to look for reasons to omit "illegal" than to find ways to keep it in.

Politics · Florida · 2006/06/19 · 29 COMMENTS · Link

Hey, Kids! Comics!

During a recent road trip the kids and I stormed two geek stores: Lone Star Comics in Dallas and Cosmic Cat Comics in Tallahassee. This is a foolish thing to do, because I have poor impulse control and my sons have a serious Yu-Gi-Oh jones.

The clerk at Lone Star was exceptionally friendly, digging up free comics for the kids and teaching them how to slam Pogs, which are undergoing an attempted revival.

We did $80 damage at Lone Star on cards, comics, manga and a $13 box that contained three pieces of laminated cardboard and two plastic Slammers.

The clerk at Cosmic Cat couldn't have been less friendly if he was channeling Jack Black in High Fidelity.

My son Eli believes that stores that don't stock Yu-Gi-Oh cards are secretly holding out on him, so he interrogates clerks like Mike Wallace working somebody over on 60 Minutes. His favorite technique is to ask a series of similar questions to see if the story changes. Some clerks actually begin to sweat under this fusillade, which always reminds me of his mother.

In a store with no other customers that's part of a run-down shopping center hurting for business, the clerk copped so much attitude that we left without spending a cent.

Thank you, Cosmic Cat Comics!

Florida · Dallas · Comics · 2006/06/16 · 4 COMMENTS · Link

Robert Scoble, Naked Conversations and Exposed PCs

Robert Scoble's departure from Microsoft is getting major-news treatment from the mainstream media this morning:

Mr. Scoble's blog, called Scobleizer, is widely seen as helping to humanise Microsoft and shift its stance from arrogant and aloof to one that is more inclusive and accepting of criticism. It also commented on broader changes in the net world and how they affected the company.

Scoble began his blog around the time he left UserLand Software and deserves credit for using an employee blog launched in obscurity to route around Microsoft's PR firewall and elevate himself into one of the company's best-known names. But now that the Scobleizer has become the Defenestrator, I wonder how much impact his blog really had on Redmond.

Though he's been touted as a direct channel between the user/developer community and Microsoft, Scoble was heavy on ain't-it-cool and light on criticism. Considering my recent experience with a compromised PC, I was curious how much he's said about the company's biggest problem: the long-running inability to make Windows secure, no matter how many times they launch new initiatives to address the issue.

The answer: very little.

Shortly before New Year's Day, Russian crackers began taking over fully patched Windows systems by exploiting a huge security hole in Windows MetaFile (WMF) graphics. All it took to become compromised was to display a graphic, which could occur automatically when a web page was opened, e-mail attachment was indexed or thumbnail images were prepared in a folder. After an exploit for this hole was widely publicized, Microsoft took more than a week to release a patch, even though outside security experts thought it was serious enough to pull all-nighters over the holidays on unofficial fixes:

To the best of my knowledge, over the past 5 years, this rag-tag group of volunteers hasn't asked for your trust: we've earned it. Now we're going to expend some of that hard-earned trust:

This is a bad situation that will only get worse. The very best response that our collective wisdom can create is contained in this advice -- unregister shimgvw.dll and use the unofficial patch.

This was a disaster on multiple levels, beginning with Microsoft's reckless decision to permit executable code in a graphics file format. That's a security nightmare, as the company should have learned six years ago when it permitted executable code in e-mail.

Looking over Scoble's naked conversation during that crisis, he did what software companies always do when they've left users exposed: Pretend it was an act of God, release a patch and cover your ass. If he thought it was a bad idea to put code in graphics or let days pass without a patch, Scoble didn't test his company's acceptance of criticism. His final word on the matter was to quote his brother:

Microsoft is more responsive than people want to give them credit for.

Windows Xp · Security · 2006/06/12 · 17 COMMENTS · Link

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