***So AXA Private Equity Head Dominique Senequier called for a code of ethics in private equity, following uproar over obscene profits made by managers of Barclay’s private equity . My response to this is mixed. On one hand, I’m a journalist and therefore hold myself to a code of ethics. On the other hand, I’m sure voluntary codes with no concrete roles and entities to enforce them are ever that effective, especially in business. I certainly do not feel a voluntary code would do much good. The fact that a few firms are drawing one up now as a way to “head off the potential devising of legislation to regulate their activities” serves as further proof that PE doesn’t always have the most honest of intentions.
***Everyone’s talking about the SEC commentary on short sellers spreading false rumors. I’m pretty fascinated by this whole conversation even though I don’t pay much attention to short sellers. From an M&A point of view, I was immediately reminded of Clarins—the company that got so tired of defending M&A rumors that the owners just up and took it private. If that’s not an argument against the spreading of false rumors then I don’t know what is. Still, many journalists and traders make a living on rumor mongering. Is there such a thing as a responsible rumor? And if the rumor exists, is it wrong to repeat it even if it’s clearly labeled “rumor”?