Media linksDan Gillmor: A Bubble Tale to Make You Angry
New York Times: InfoSpace Papers Document Collapse
Responses from readers
Comments from readers were overwhelmingly positive. Here is a selection:
My congratulations to the Seattle Times for a magnificent job of investigative reporting. The series this week on InfoSpace and its founder, Naveen Jain, is simply the best piece of business investigatory journalism that I have seen in 30 years of reading the Seattle-area business press. Most remarkable was the persistence of The Seattle Times in pursuing the story, both in terms of time and money.
The failure of public institutions to protect the public from financial manipulation provides a lesson in stock market investing: The stock market is still the Wild West when it comes to public protection, a point we should well ponder before transferring more of our Social Cecurity monies into private market accounts.
Yes, I too was a hapless investor in Infospace and contributed to the current opulent lifestyle of Mr. Jain. There is for me a particular satisfaction is seeing the inside story finally told.
— Bill Erxleben, Newcastle
Dot-Con Job was an excellent series. Your tenacious and thorough reporters and lawyers did a great job of dragging out into the open a story that should never have been allowed to hide in the first place. Your story came out about the same time Martha Stewart was released from jail. So I can’t help but wonder: Is the greed of Jain, Horowitz, Alben, Halstead, et al any less offensive, their actions any less egregious, their indifference to innocent shareholders any less harmful than what landed Stewart in jail?
— Gregg Paisley, Sumner
Great series. I can see why the various players fought the release of the court documents. What I find amazing is that not a single soul ended up in jail, despite what was obviously stock manipulation, fraud and insider trading. Indeed, every principal player cashed in on what they knew at the time were ill-gotten gains and came away in great shape financially. Our jails are filled with people who have caused much less damage.
— James S. Cameron, Seattle
I can’t tell you how sick I feel about what I’ve just read. My husband and I worked 24/7 for 15 years running a coffee house/bakery (Honey Bear Bakery). We never had time off; we saved and saved until we had a nest egg. Then we found a friendly young man to be our stock broker. We invested in Microsoft in 1996, and when that did well, our broker suggested we take a little more risk and invest in some of the other dot-com stocks. After all, he said, it was a “Gold Rush.” Because of trusting him, we put everything we had into those stocks.
I remember clearly Mr. Jain and his appearance on CNN. He really buoyed us up, not only about the future of InfoSpace but the whole dot-com industry. How could that lull and drop mean anything long term with predictions like he and Merrill Lynch were giving out?
I’m sure I don’t need to go on — yes, we lost everything. No, we don’t (and never did) get to keep our mansions. We worked hard, and now we are too old to do that again. So we go into old age with nothing to back us up.
I am really furious that these people are not accountable for their lies fed by their greed. They have hurt so many people — so many lives are forever changed by their greed-driven actions. What is wrong with this picture, that they get off without a word of apology, living in their mansions, smiling their slimy smiles? It just makes me really mad and so sad for myself and all the other hardworking people who are now made to suffer because of their lies. We trusted them!
— Rissa Warner, Skagit Valley
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I have one additional question, which I think other members of the public share: Could an InfoSpace-like fraud happen today? Have there been any regulatory changes that would make the same deceptive practices more difficult for individuals tempted to defraud investors today?
— Lisa Williams, Watertown, Mass.
I am not an easy fellow to impress and I do not write to newspapers, but you folks have done a good job of knockin’ my socks off. My sincere compliments to every person on your team who labored long and hard on this sensational piece of investigative reporting. This is Pulitzer-grade stuff.
You folks dug deep and took a long, challenging and (I’m sure) arduous route to expose the ugly belly of the beast. If criminal indictments don’t follow at some point, there is no justice.
And to think we get this kind of world-class reporting in the midst of the many financial and other challenges the paper has faced of late from Hearst, the economy, the labor strike and God knows what else, well it reaffirms one’s hope in the craft of journalism and in local, hands-on ownership of newspapers.
— C. Rogers, Monroe
I too drank the “Kool-Aid” that Naveen Jain was serving. I was a first-time investor back in 2000 and was looking to ride the dot-com craze. In our office we had about 10-15 people heavily invested in InfoSpace, and a co-worker, whose investing savvy I highly respected, suggested I take a second mortgage to invest in INSP. I threw $40,000 at it and it quickly went to less than $1,000. I kept thinking, “It will come back, it will come back … it’s got to!” I had nightmares and to this day every time I think about it I get sick to my stomach. I wish there would have been more-severe penalties handed out.
Thank you so much for bringing light to what happened to me and many others. Now I don’t feel so stupid and like I was the only one who got taken! Thankfully I am still young and this taught me a very valuable lesson about money. Your series has helped bring closure to this investment fiasco. Thank you!
— Jon Schorsch, Seattle
Bravo! I applaud your excellent journalism; your exhaustive research and fact checking were outstanding. I’m amazed just how many criminal activities took place. Where was our attorney general when all this took place?
I just wish we could strip the key players of their lasting wealth and return it to some of the investors who lost their fortunes.
— Karl Kurrle, Everett
I am wondering if you realize the impact of your most recent article Dot-Con Job on the current Infospace company? It seems to me that the article should have been focused on the individuals involved (i.e. Naveen Jain) and not InfoSpace the company. With that said, the headline you chose for Sunday’s newspaper was in terrible form. It gave readers the impression that Infospace is in trouble and ruffled a lot of feathers on a dead issue.
Why not report on Jain’s current business? The fact that he got away with the scam? I do not see why InfoSpace should have to suffer five years later for his wrongdoing. I think that your choice in timing, headline and content are a prime example of poor reporting skills and a question of your paper’s integrity.
— Kimberly Searle, Seattle
Thank you for this great piece of investigative journalism. The detail and insight provided help us as investors understand the greed and corruption involved at the top levels of similar scandals like Enron, Tyco, Symbol, Worldcom and countless others. It’s gut-wrenching to see the lengths these executives will go to lie, cheat, steal and not care about the consequences or the result to the employees and everyday shareholder. This piece solidified my opinion that executives need to be accountable for the decisions made during their watch, and if that means going to jail for a long time, so be it. Until then, the lack of integrity permeating big business and the investment community will only continue to get worse. Doesn’t anyone believe in “doing the right thing” anymore?
— Kevin Regehr, Federal Way
Thank you for the informative articles on InfoSpace. I was completely disappointed in the SEC in regards to their decision toward InfoSpace, whose policies were flagrantly fraudulent. For an organization that is supposed to protect investors, the SEC certainly did not do their job. I cannot help but wonder about all of the people who lost their retirement savings over such corrupt practices. Thank you for bringing this story to light.
— Mikel Carver, Bellevue
I read the article regarding InfoSpace and Judge Armstrong’s rulings. I have worked with Judge Armstrong on the Washington Pattern Jury Instruction Committtee for over a decade. I have been a trial lawyer for 30 years — 20 years as a defense lawyer and 10 years as a plaintifff’s lawyer. I have litigated a number of cases before Judge Armstrong.
If Judge Armstrong made a ruling to keep something confidential, you can rest assured there was a just, good, and legal reason for it. Her integrity is known by members of the bar to be unimpeachable.
— Joel Cunningham, Seattle
Our corporate executives in the U.S. have taken looting the till to heights never imagined, and poor dumb saps like me get hammered in the process. I had to quit reading the Wall Street Journal because the nonstop scandals from the ’90s were just too depressing to read. I have invested every month for all of my adult life. I have been an avid student of it, too. Yet as I approach age 50 I am at a loss for where to invest now. How can I trust anybody in corporate America?
— Scott Norris, Spanaway
I belive that Naveen Jain and his former associates will get their appropriate punishent in one way or another. They know that people got screwed, and I hope the guilt eats them alive. Somehow, I predict a few of them will die penniless and alone.
— Stephen Cugier, Seattle
Congratulations to reporters Heath and Pian Chan for delivering the InfoSpace (Naveen Jain) story. Isn’t it ironic that Martha Stewart spent time in prison while this flock of thieves continues on in business? Keep up the great work; it’s why we buy newspapers.
— Al Chandler, Sedro Woolley
It sickens me that so many lost so much as a result of Mr. Jain’s and his former colleagues’ misleading and illegal activities. And it frustrates me that the SEC, U.S. Attorney’s Office or any other enforcement agency has not pursued Mr. Jain, his former colleagues, auditors and Wall Street cheerleaders. The biggest crime here is that Mr. Jain and his former colleagues still enjoy the fruits of their fraud and are free to rip off other investors.
If such blatant and documented Securities Act violations are ignored and unpunished by those who are responsible for enforcing those laws, what chance do investors have?
— Kevin Rogers, Sammamish