Decision ‘08

More On The Jerome Armstrong Stock-Shilling Bombshell

Mickey Kaus notes that Chris Suellentrop, who blogs at the NY Times, broke the story before the NY Post:

Armstrong and Moulitsas…worked as consultants to Howard Dean’s presidential campaign, and Dean’s former head of Internet outreach, Zephyr Teachout, sparked a blog tizzy last year when she wrote on her (now defunct) personal blog that the Dean campaign paid the two men in an effort “to buy their airtime.” Teachout wrote:

“On Dean’s campaign, we paid Markos and Jerome Armstrong as consultants, largely in order to ensure that they said positive things about Dean. We paid them over twice as much as we paid two staffers of similar backgrounds, and they had several other clients. … While they ended up also providing useful advice, the initial reason for our outreach was explicitly to buy their airtime. To be very clear, they never committed to supporting Dean for the payment — but it was very clearly, internally, our goal.”

Moulitsas dismissed Teachout’s posting as a “non-story,” and he noted that he posted a disclaimer on Daily Kos stating that he worked for Dean for the duration of the contract. Armstrong, for that matter, quit blogging while he worked for Dean. But their disclosures were somewhat haphazard — posted on separate pages like this one — and after the campaign ended, they didn’t always disclose their past financial relationship with Dean, leading some people to compare the blog boomlet they helped create for Dean to the work of online bulletin-board posters who touted dodgy Internet stocks during the boom market without disclosing that they were being paid for their words.

Which, interestingly, is precisely what the Securities and Exchange Commission, in court documents filed last August, alleges that Jerome Armstrong did in 2000. (The original S.E.C. complaint is here.) In a subsequent filing, the S.E.C. alleges that “there is sufficient evidence to infer that the defendants secretly agreed to pay Armstrong for his touting efforts” on the financial Web site Raging Bull.

Without admitting or denying anything, Armstrong has agreed to a permanent injunction that forbids him from touting stocks in the future. The S.E.C. remains in litigation with him over the subject of potential monetary penalties.

(hat tip to Ryan Sager at the RCP Blog)…

UPDATE 10:31 a.m.: More from the always-interesting MinuteMan, who graciously links to yours truly and expounds a bit on the consent decree. Just for the record, the ‘neither admitting or denying guilt’ is standard boilerplate for SEC consent decrees - it certainly doesn’t imply innocence and, in fact, brings a fairly heavy, though not absolute, assumption of guilt (otherwise, why settle? Oh, to avoid litigation costs, I suppose - but let’s face it - 90% of people who enter into these agreements (and I’m being charitable) in fact did engage in the wrongdoing alleged)…

UPDATE 2 10:51 a.m.: Pajamas has much, much more…

2 Responses to “More On The Jerome Armstrong Stock-Shilling Bombshell”

1 PoliticalCritic Says:
June 19th, 2006 at 3:07 pm
You can’t trust anyone these days, eh? Even some bloggers are slick criminals too. It looks like Armstrong is just another used car salesman looking to make a fast buck.
2 Jerome Armstrong Says:
March 27th, 2008 at 7:06 am
[…] Really. […]