LITTLE FISH EAT BIG FISH. Bloggers were in a tizzy all weekend over a New York Times report by Opinionator Chris Suellentrop on Friday unearthing the fact that Mark Warner PAC Internet strategist Jerome Armstrong was charged with being a stock tout in the late 1990s, hyping a worthless company in which he held stock without disclosing the conflict of interest, leading to an Securities and Exchange Commission investigation that alleged that �there is sufficient evidence to infer that the defendants secretly agreed to pay Armstrong for his touting efforts�; a permanent injunction against Amstrong touting stocks; and ongoing litigation over potential penalties. Suellentrop then called "the links between online stock speculation and online politics...delicious." The New York Post picked up the story on Sunday, running with the much harder-hitting -- it's a tabloid --"SHILL TO HACK: CELEBRATED LIB STRATEGIST HAS SHADY MARKET PAST."
Since Friday, speculation has raged in blogosphere backchannels that this has to be some kind of intra-primary take-down effort, with blogger uber-villain Hillary Rodham Clinton's team having pitched the story as some kind of oppo hit designed to screw the netroots as payback for how their leaders have spurned her.
This is absurd. I called Suellentrop, who is a friend, for insight. He just laughed when I mentioned the HRC speculation. He'd gotten the story from an e-mail tipster who did not ask that his identity be held secret. "I strongly believe that the all-caps e-mail I received about this is not from the HRC campaign," he told me. Chris and I talked, and then he and his source talked, and the upshot was that his source is happy to go on the record about being his source.
The man's name is Floyd Schneider. According to records maintained at FEC.gov, he has never donated to a political candidate. But he was the subject of a 2900-word BusinessWeek story in 2002 called "The Revenge of the Investor" that described him as a "citizen investor" who "turned the powerful information resources of the Internet against interconnected networks of promoters who use the Net to peddle stocks." He's quoted in The New York Post's story, and has apparently had a beef with Armstrong since the late 1990s:
Floyd Schneider, a New Jersey mortgage broker and investigator of penny-stock scams, said he was a repeated target of Armstrong's attacks because he criticized the finances and business models of firms Armstrong supported.
"[Armstrong] was among the nastiest and ugliest stock touts from that era," said Schneider. "The stocks he touted were dogs and rigged, so it makes sense that he had a deal with promoters."
The funny thing about this little micro-scandal is that it mirrors the exact same dynamic as the micro-controversy over the outing of Daily Kos front-page diarist Armando. The original culprit in that story was a fellow Kossak calling himself "jiggy flunknut" whom Armando had gone after full-bore after the Kossak posted a poorly-sourced item about the alleged upcoming indictment of Karl Rove; jiggy flunknut's item then became the basis for a larger media story in National Review Online. That's the thing about the 'sphere: The people most likely to want to take bloggers down are not campaign hacks, who have bigger fish to fry, but all the little people who feel dissed or screwed by the big boys along the way.
UPDATE: Boy, this Schneider fellow seems to get around. According to this St. Louis Post Dispatch story: "Since 1998, he has posted more than 30,000 messages on Internet stock boards, raising questions about companies and digging into the backgrounds of their officers, directors and consultants. He has been sued by three of his targets and racked up nearly $60,000 in legal bills." He's also a known quantity to The New York Post business reporter who wrote the Sunday story, in that he's been in his stories before, and apparently helped Infoseek founder Steven Kirsh "bust up global money-laundering operations." At least one of the lawsuits against him charged him with making false and defamatory statements; he was a target of an early "cyber-smear" lawsuit, as well, though that case was ultimately dismissed. Pseudonyms -- those again! -- he's used in the past include "The Truthseeker" and "Flodyie."