Bloodhound On The Wall Street Beat

Investigative reporting is one of the most difficult forms of journalism. It requires relentless digging for information, constant checking of facts, good judgment, and infinite patience when leads turn into dead ends. Sometimes it even means standing up to threats. But when done properly, the work often results in the exposure of wrongdoing.

Over the years, BUSINESS WEEK has compiled a distinguished record of investigative journalism--resulting in the ouster of inept or corrupt CEOs, the exposure of shoddy business practices, or the discovery of malfeasance by government agencies. Last December, Senior Writer Gary Weiss wrote a long account of organized crime on Wall Street (Dec. 16, 1996). It was the first detailed look at how the Mob had infiltrated certain parts of the stock market. There were denials all around, of course, but just last month the U.S. Attorney in New York announced the indictment of several people for Mob-linked fraud on Wall Street. Gary, we're proud to say, got there first.

This week, Gary is back with another detailed look at the seamy underside of Wall Street. This time, he spent six months focusing on the world of "chop stocks"--small-cap equities that are manipulated to enrich promoters and defraud thousands of small investors. Some of the players in our story were named in the recent federal indictments.

So please turn to page 112. I can't promise you pleasant reading, but you'll find a chilling story that gives new meaning to the phrase caveat emptor. And thanks, Gary, for showing the way.

Weiss gave us the first detailed look at Mob-linked fraud in the stock market. Indictments have followed