Category Archives: CNBC Schering-Plough puff piece August 20 2008

CNBC Runs a Favorable Investment Opinion Piece on Schering-Plough — Quoting A Fifth-Third Fund "Portfolio Manager" — but fails to disclose. . . .

I am not certain that these two are affiliates, but it certainly seems likely. . . .

Earlier today, a Fifth Third Disciplined Investment Fund “Portfolio Manager” named Scott Richter said he “likes” Schering-Plough’s management, in this CNBC piece. Okay. Take a deep breath, now. That’s right — he is basing his favorable commentary on the strength of Schering-Plough’s “management“. R-i-i-i-i-i-ght.

Obviously, that struck me as a very unusual thing to say, given what we all now know. So I set out to do some digging.

When CNBC first ran this pro-Schering piece, it indicated that “disclosure information was not available for Richter, or for his company. . . .” [Emphasis supplied.]

Not so. See the SEC website. Richter was the person quoted, on behalf of the entity — the Fifth Third Fund (presumably, some investment vehicle-affiliiate of the Fifth-Third banking entities). As a threshold matter — why would CNBC run the piece, then? Forget the SEC rules requiring such disclosures (of “portfolio managers” making public comments), for a minute — isn’t that a Journalism 101 question: “What is your stake, if any, in the company you are touting?”

In any event, we find this, over at the SEC — look at the following alphabetical listing — of holdings by Fith Third Asset Management, presumably an affiliate of that firm’s Disciplined Investment Fund:

SCHERING-PLOUGH

Quarter Ended June 30, 2008

$29,315,000 Value

1,488,826 Shares

Sole Investing Decision Authority;
Sole Voting Authority on all.

~~~~~~~~~~~~~~~~~~~~

Quarter Ended March 31, 2008

$1,190,000 Value

82,551 Shares

Sole Investing Decision Authority;
Sole Voting Authority on all.

Fascinating. Fifth Third entities acquired just over 1.1 million shares between March 31 and June 30, 2008 — in the most-recent quarter. Moreover, the March 31, 2008 shares carry an average value of $14.41 per share — and the June 30, 2008 shares show an average per share value of $19.69. Do you think Fifth Third is motivated to see Schering stay above $20 per share? I do. And that, my friends, is material information.

[DELETION — 09.16.08]

It would seem that Fifth-Third might have over $29 million reasons to want to see this stock rise. . . . but citing “management strength” might be the least convincing one of all.

[CORRECTED: 09.16.08 9 AM:

Now — John Puskar, in a comment to the back up site, on wordpress — informs me that I was wrong about which Scott Richter this involves. My most sincere apologies. The story is accurate; I have the wrong Scott. A different Scott Richter was the Fifth Third analyst, so I’ve removed the matter that used to appear below, and put it in a comment — the text is there to preserve the record, just to be clear. Again, my apologies. — Condor]

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