Henry Blodget knows a thing or two about securities violations. During the dot-com boom he rose to the the position of number one Internet analyst at Merrill Lynch. Bu after the bubble burst, he was indicted by Elliot Spitzer for securities fraud, when emails emerged that showed him bad mouthing stocks in private that he was pumping up in public. Mr. Blodget agreed to pay $4 million in total and was banned from the securities business for life.
Today Mr. Blodget, in his reincarnation as a tech blogger at Business Insider, pointed out what he saw as a suspicious series of events. Groupon, which has filed for an IPO, has been taking a lot of heat from both the press and the SEC over its unique accounting methods. Because of the SEC’s “quiet period”, which prohibits companies who have filed for IPO from promoting themselves, Groupon cannot defend itself publicly.
But Blodget argues that, “The clever method Groupon is using to try to get around the SEC’s quiet period rule is writing a detailed public communication in the form of a CEO “letter to employees” that Groupon has then distributed publicly with the help of a trusted media outlet.” Read More