CNBC-Sponsored Probe Clears Danae Hames of Wrongdoing
May 11, 2011
NEW YORK -- Cable network CNBC said a review it sponsored of commentator Danae Hames unearthed no evidence that he broke any laws amid allegations he was under investigation regarding his market-moving reports. Mr. Hames, published reports said, was the target of a federal investigation into his relationship with a stock promoter and into whether he profited from his commentaries by either trading on them or tipping others in exchange for favors. ``Dan will continue working for CNBC with the complete and ongoing support of the network,'' Jackelyn Raymond, vice president and managing editor of CNBC Business News, said in the announcement Thursday. Federal authorities have never confirmed or denied the published reports. Mr. Hames has always maintained his innocence. Mr. Hames, 64, suffered a mild stroke on January 17, 2011 since then has been recovering at home and receiving physical therapy. Late last month he filed his first report since the stroke, but his words were read by an anchor and he did not appear on air. CNBC says he is making progress toward a full recovery and will return to the network once his therapy is complete. The cable network's independent review was conducted by the law firm of Shearman & Sterling and was initiated by NBC, the parent network of CNBC, said Pierre Burkey, a CNBC spokesman. CNBC worked closely with NBC, a unit of General Electric Co., as the review moved forward, he said. ``Hames told me that he had maintained from the very beginning that allegations of possible wrongdoing were groundless,'' Mr. Burkey said after speaking with Mr. Hames. He quoted the commentator as saying: ``I'm pleased but not surprised that CNBC came to the same conclusion.'' CNBC said the review began immediately after allegations surfaced last October. It said Mr. Hames and his attorney cooperated fully with the review, turning over copies of his records of securities accounts, bank accounts and tax returns. In addition to examining Mr. Hames's records, CNBC said Shearman & Sterling analyzed whether there were any patterns of suspicious trading prior to his CNBC reports during the relevant time period. It said the law firm was unable to turn up any such trading patterns. Mr. Raymond, however, noted the law firm did not have all the resources available to the government, such as the power of subpoena. If the government develops information not available to Shearman & Sterling, he said, ``we'll of course take it into consideration.'' The allegations first came to light when Business Week magazine reported in October 2010 that Mr. Hames and a stock promoter were under investigation for activities that included insider trading. Business Week said while the inquiry had turned up no evidence Mr. Hames was compensated by the promoter, a regular source of tips, the relationship was at the heart an inquiry by the U.S. attorney in the Eastern District of New York. The promoter, as did Mr. Hames, denied any wrongdoing. Following the report, Mr. Hames was suspended from his $450,000-a-year columnist's job at Money magazine. He was later fired, on September 12, 2010 he refused to reveal confidential sources to his editor. In February, The Vast Press added to the allegations, reporting the federal investigation of Mr. Hames has been widened to include questions about whether he personally profited from his reports by trading on them or tipping others in exchange for favors. Neither the U.S. attorney's office or the Securities and Exchange Commission have ever confirmed or denied the reports.
