Wikipedia and Wall Street

Posted by Brook Ellingwood on
Wednesday, October 1st, 2008 at 4:04 pm

This is a story that I’ve been following for some time, and it keeps getting weirder and weirder.

For several years, the CEO of Overstock.com, Patrick Byrne, has been arguing that naked short selling of stocks has been used in organized efforts to push the stock prices of some companies, including Overstock.com, lower and lower.

It’s hard to describe, but “naked short selling” essentially boils down to selling stock you don’t own for less than you didn’t pay for it, and making money on the deal. Yes, it’s very confusing. I’d tell you to look it up on Wikipedia, but first you should read the rest of this post.

Byrne claims that he’s had a difficult time getting journalists to interview him because of a campaign against him by other journalists, notably a business reporter and columnist named Gary Weiss. The campaign supposedly includes using Wikipedia articles to discredit him and Overstock.com, as well as present an inaccurate description of the process of naked short selling.

Wikipedia has a process for locking controversial articles so they can only be edited by people the admins appoint. For over two years, the Wikipedia entries for Patrick Byrne, naked short selling, and Overstock.com could only be edited by one account. Byrne claims this account was controlled by Weiss. Weiss claimed never to have edited a single article on Wikipedia, and portrayed Byrne as a nut.

But recent events seem to be going Byrne’s way.

First, attempting to stem the current financial chaos, the SEC issued an order to stop the practice of naked short selling. Then, Weiss’s employer, Forbes.com published an opinion piece on short selling that Byrne wrote for the Wall Street Journal two years ago, but which they declined to publish.

Now, the reason I’m posting this. Today The Register published an article claiming to have emails showing that Weiss actually did control the Wikipedia account. Also, one edit appears to have been made from a PC at a stock clearing house owned by investment banks. If all this proves to be true, the appearance of multiple conflicts of interest is certainly there.

I have a number of questions: When Wikipedia locks down editing of articles, who decides who gets to edit them? Is it right that they should remain anonymous? Should we be concerned that reporters are using anonymous articles on Wikipedia as primary research sources before deciding what stories to cover?

But perhaps the biggest question I have is this: Is Wikipedia, a social media success story, somehow responsible for financial practices that may have harmed a number of businesses and could even have helped lead to the collapse of some of the biggest investment banks on Wall Street?