Generally, threats and lies are terrible tactics to use to kill a story. They only encourage aggressive reporters.
One of the worst people to threaten is Bess Levin of DealBreaker. To see why, check out this exchange Levin had with the COO of David Ganek’s Level Global, the hedge fund that announced today that it was liquidating its investments.
Levin had been told by her sources that the fund was contemplating a liquidation and that investors were demanding back $750 million. She called up Level Global to get their take on it.
COO: No decision has been made at all. All options *are* always on the table for every hedge fund.
BL: Hmm, I’m not necessarily sure that’s true.
COO: Yes, it is. At any given time any hedge fund is reviewing all their options.
BL: So if I called up any random hedge fund, who was not raided by the FBI had not received a three quarters of a billion in redemptions and asked “how’s business?” you’re saying they would tell me “Well we’re either going to keep going or shut the place down; all options are on the table?”
BL: Well, okay, agree to disagree. Anyway, if I do the story, just to check, do you want me to quote you as the COO or a spokesperson? Or would you like to say you declined to comment?
COO: [Pause] Wait, what? You’re doing a story?
Note to hedge fund executives: when a reporter calls you up, they are doing a story. They are calling you because sources that they trust have told them something that they believe to be true. At this stage, quibbling is a bad idea. It’s far better to actually talk to them about what’s happening. For instance, in this case the COO might have tried to spin Bess into doing a story about how the SEC’s insider trading probe was unfairly making business difficult for Level Global, even though the firm is not a target of the probe.
Instead, the COO flips his lid.
COO: [Tone get quite a bit more hostile at this point] Maybe I wasn’t being direct enough with you before—DO NOT DO A STORY. It is purely based on speculation- WRONG speculation—and it is NOT TRUE.
BL: Well I’m sorry but I have been speaking with your investors and other people who know the firm, and they’re telling me otherwise.
COO: [Voice you might use when speaking to a naughty child or bad dog] Our investors, I don’t know what they’re getting that from or why they’re telling you that- IT’S NOT TRUE and you CAN-NOT write that.
BL: You yourself have told me “all options are on the table”—meaning one of the options is closing. So how is it not true that you’re contemplating closing? I’m using your own words. And it’s not clear that a hedge fund would pose a “liquidation” scenario on a call with investors unless it wasn’t a possibility.
At this stage, the COO should just say: “I don’t have a comment about this. We don’t respond to rumor and speculation.”
Instead, he decides to personally attack Levin’s integrity. And attempts to get her “boss” on the phone. Unfortunately for him, Bess is the editor in chief of DealBreaker—there is no higher editorial authority there.
COO: Now you listen to me—I tried to talk to you like a human being. You have no integrity.
BL: Actually I think I have a lot of integrity, which is why I called you to try and get the entire story, rather than just running it.
COO: [Screaming at this point] If you run this story you will have no integrity. You are putting 65 people’s livelihoods at risk. SIXTY-FIVE PEOPLE. You know what? I want to speak to your boss.
BL: You’re speaking to her.
COO: What do you mean, you have no boss?
BL: I have a boss, but he’s on the business side—editorial is at my discretion.
To be fair to the COO, this line frustrates everyone. I used to use it all the time when I was editor-in-chief of DealBreaker.
Things keep getting uglier:
COO: Well you tell that boss that if you run this I’m going to take legal action and you need to be dealt with.
BL: Alright I’ll tell him that but just so you know, I don’t actually appreciate being spoken to like a 5 year-old.
COO: I don’t care—you’re acting like a five year-old. A five year-old who needs a time out.
BL: I’ll pass that on to my parents. Is there anything else you’d like to tell me?
COO: No, there’s not.
BL: Okay, have a nice rest of your day.
Then, Friday, the fund sent its investors a letter announcing the liquidation. So Bess rightly serves up the entire conversation.
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