Ethical Failure at Breakingviews Tarnishes Thomson Reuters

If violating journalistic ethics is a crime, than Reuters Breakingviews committed a felony.

Breakingviews is a commentary website, whose work is used by The New York Times (NYT) and other leading newspapers. Yet on more than 50 occasions, Breakingviews writers failed to disclose that they owned shares in the companies they wrote about.

For any journalist who covers business and finance, that's a huge no-no. For readers, the lapse may eviscerate the site's credibility, which took years to establish. In one case, British writer Neil Collins acquired shares of BP (BP) both before and after writing about the oil company, according to the Times. Collins has now resigned, the newspaper says. A spokeswoman for Thomson Reuters (TRI), the parent of Reuters Breakingviews, could not be reached.

A Perfect Match Goes Awry

Until now, the marriage between the opinionated Breakingviews and the straight news operation of Reuters seemed like a match made in heaven. The U.K. media conglomerate acquired the website in 2009 for a reported $20.7 million to bolster its opinion-writing capabilities. At the time, Breakingviews, which also runs in the Times five days week, had grand ambitions.

"We want to be able to conquer the world in the financial commentary space, and this allows us to do that," co-founder Rob Cox told paidcontent.org after the deal was announced. "We want to be the most influential voice in financial commentary. Not everyone needs to see what we do."

Cox's ambitions now lie in ruins. David Schlesinger, Reuters editor-in-chief, is quoted in a memo obtained by the Times saying there was no evidence that any journalist abused their position for financial gain. That's ludicrous. Breakingviews columnists were trading shares to make money. Clearly, their motives were not journalistic.

The Times, for its part, is clearly annoyed with its content partner over the violation by Breakingviews writers of journalism norms despite Reuters's own internal policies that explicity forbid those writers' actions. Other organizations are probably fuming as well.

"We are looking into it," says Times spokeswoman Diane McNulty in an email. "The Times takes any sort of financial conflict very seriously... An initial review identified three Breakingviews articles published in The Times in the last year on subjects in which the writer had a financial interest. We will append an appropriate disclaimer on those stories. Editors of The Times are working with Reuters Breakingviews on a full accounting of material in The Times. "

The Downside of Media Downsizing

As news budgets continue to shrink, the scandal at Reuters Breakingviews underscores how dependent media organizations have become on outside contributors who may not share their ethical standards. Without such contributors, the Times and other organizations would cease to function. But ties should be cut if they prove to be more trouble then they are worth.

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Reuters editors and Rob Cox have some explaining to do. Why were Reuters's ethics guidelines ignored? Was it because Breakingviews was allowed to keep its editorial independence under the terms of its buyout agreement? If so, then top managers at the site need to be replaced. Otherwise these words have no meaning: "Reuters journalists must not buy or sell, either directly or through nominees or agents, securities about which they have written recently or about which they intend to write in the near future. To avoid loopholes, no time period is specified."

Reuters, the Times says, may adopt a new policy that would require writers to disclose their securities holdings at the bottom of articles. Trouble is, it's a little late for that.

Editor's note: This article was corrected on Oct. 21 to remove wording that said Reuters allowed Breakingviews writers to violate journalism norms.