Magazine article Newsweek

One Heck of a Whupping: The Wall Street Journal Hit with a Huge Libel Award

Magazine article Newsweek

One Heck of a Whupping: The Wall Street Journal Hit with a Huge Libel Award

Article excerpt

The Wall Street Journal hit with huge libel award

THE STORY IN THE OCT. 21, 1993, WALL Street Journal appeared to be as dry as they come: something about a securities firm and regulators. Surely this was just another beat m the esoteric world of Wall Street. Not quite. Last week a federal jury in Houston found that the paper's story libeled the small brokerage firm, and awarded MMAR Group Inc. (now defunct) an astonishing $222.7 million in damages. How big is that7 It's nearly four times the next biggest libel award, a $58 million verdict in 1991 against a Dallas TV station (later settled for an undisclosed amount). It surpasses the $190 million earned last year by Dow Jones & Co., publisher of the Journal. And it comes when the Dow Jones management is under fire for weak financial performance.

The verdict shocked media lawyers, who denounced the outsize award as dangerous to the press's First Amendment rights. "This is not consistent with the notion of a strong media," says Sandra Baron, executive director of the Libel Defense Resource Center. The Journal said it would ask a judge to set aside the award, and many lawyers think it has a good shot. A majority of libel judgments are reversed on appeal, or the awards reduced.

Written by reporter Laura Jereski, the story depicted MMAR, which sold mortgage-backed securities, as a freewheeling operation that overpriced its product and deceived its top customer, the Louisiana pension fund. The story also said MMAR's two owners, Cory Miner and Paul Brown, spent $8,000 entertaining Japanese brokers in a topless bar. …

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