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A circle unsquared, a line crossed, a reputation tarnished

Squaring opinion written under the Reuters rubric with the agency’s reputation for freedom from bias in its news reporting was always bound to be problematic. How could commentary sit with reportage, for all the Chinese walls and separate branding, yet align with the Trust Principles drawn up by Reuters in 1941 in the throes of world war and adopted by Thomson Reuters as an ethos for its entire business following the takeover in 2008?

The case of the columnist who resigned after being found to have traded several blue chip equities he wrote about has brought Reuters adverse publicity. Reuters has been rocked by the scandal, according to some published accounts. A line has been crossed and Reuters’ reputation has been tarnished by a failure of ethics, say others.

The affair has potentially grave implications for Reuters’ prized reputation for independence, integrity and freedom from bias.

The columnist who fell foul of Reuters’ conflict of interest code, Neil Collins, was a senior editor of long standing in British financial journalism before joining Reuters in March 2009 as a prominent member of its fledgling commentary team engaged in “point-of-view journalism”.

"While we have no evidence the journalist was abusing his position for financial gain, we take such breaches extremely seriously and that journalist resigned with immediate effect during our investigation,” editor-in-chief David Schlesinger said in a note to editorial staff. “A fundamental foundation of our principles is that we avoid conflicts of interest in our reporting and that we are honest and transparent with our readers when those conflicts occur.”

The blurring between fact and opinion undermines the credibility of the wire service and raises a big question for Reuters

Schlesinger said it was vital that everyone looked to their own market participation to be sure they complied with the spirit and the letter of the rules. “This is about our compact with our readers; it is about our individual reputations; and it is about ensuring that Reuters and Thomson Reuters live up to the standards set both by our long, proud history and our Trust Principles.”

Reuters has added disclaimers to articles in its archive that were found to be tainted by journalists writing about securities in which they held a financial interest. The disclaimers alert readers to a potential financial conflict. Reuters said it had identified 53 articles, 39 of which were by Collins, in which the writer’s financial interest had been significant enough to warrant disclosure. It is considering whether to start disclosing all relevant securities holdings by writers at the bottom of articles.

Collins professed himself saddened and embarrassed by what he called a serious but technical breach of the rules and said he had made no attempt to conceal his activities from his colleagues. He had voluntarily contacted Reuters as soon as he realised he might have violated the rules.

These state that journalists, before reporting on a company in which they or their family has any kind of shareholding or other financial interest, must notify the interest to their manager or bureau chief. “You must not deal in securities of any company, or in any other investment, about which you have reported in the previous month,” the rules state. “If you are regarded as a specialist in a particular area of business or industry you must notify your manager or bureau chief of any financial interest you may have in that area or industry.”

Reuters has passed details of the case to the Financial Services Authority, the UK financial industry regulator, which will decide whether to launch its own investigation into possible share ramping.

Reuters acquired Breakingviews for £12 million last December as part of its strategy of expanding from fact-based news coverage to “agenda-setting point-of-view journalism”. Self-described as the commentary arm of Reuters, it employs around 30 columnists based in Hong Kong, London, Madrid, Moscow, New York, Paris and Washington. Their output has a high profile. Selected columns are syndicated on the website and in 15 influential publications including The New York Times, The Daily Telegraph, The International Herald Tribune, Fortune, Le Monde, El País and La Stampa. The New York Times takes any hint of conflict of financial interest very seriously. It is working with Reuters Breakingviews for a full accounting of material in the newspaper or its global edition, the Herald Tribune, that might involve such conflicts.

The blurring between fact and opinion undermines the credibility of the wire service and raises a big question for Reuters, one London financial editor, Alex Brummer of the Daily Mail, wrote. When Reuters started running comment on its news wire - mixed up with actual news reporting - it crossed a line, he wrote, and it deepened the error when it opted to buy Breakingviews and bring all the comment under one roof. “This kind of blurring between fact and opinion undermines the credibility of the wire service.”

Reuters’ editors have some explaining to do, another commentator said. Why were Reuters' ethics guidelines ignored? Was it because Breakingviews was allowed to keep its editorial independence under the terms of its buyout agreement? If so, then top managers need to be replaced.

The affair leaves open the wider question of whether news agencies should be in the commentary business or should stick to immediate, accurate information, says Philip Stone, a former Reuters news and media manager who comments on media matters. “Is it only the dinosaurs who believe agencies still in this day and age of social commentary should be concentrating on facts and should be leaving the opinions to others?” However Reuters labels comment, whatever explanations it adds to commentary about the writer’s trading, people are still going to say, “Reuters says”. All that the world knows, says Stone, is a “Reuters journalist” did wrong and that is no good for a brand that Reuters protects so stringently. ■