Calibre Asset Services and Money Managers have complained about the accuracy and lack of fairness of the start of a page 1 article, its headline, and a pointer, published in The Southland Times on February 8. Calibre is the trustee of the First Step trusts, a series of trusts promoted by finance advisory company, Money Managers.
The article, headlined “Investors taking class action”, begins: “A Wellington barrister is preparing to sue Money Managers on behalf of investors over the liquidation of a group of funds that left 7000 investors owed $457 million”. It finishes with the pointer to a story about a different financial firm, reading: “Fraud inquiry possible, Page 3”.
The article is a syndicated one, written as also published in The Dominion Post, but the headline and pointer were created by and for The Southland Times.
The complaints are not upheld.

The Complaints
The first complaint is that the headline “Investors taking class action” does not accurately and fairly convey the substance of the article. Because the article goes on to say that any proceeding is being “considered” and “possible”, the headline is misleading as to content. The distinction between “taking” and “being considered” is a serious one, the first implying sufficient substance to concerns as to warrant court proceedings. Further, the reporting of financial matters requires special care, particularly where there is a potential to destabilise market conditions and shareholder interests.
The second complaint is that the pointer is inaccurate, misleading and unfair because it conveys the meaning there may be a fraud inquiry into the same matter that is the subject of the page 1 article. In fact, the second article has nothing to do with the first. The effect is exacerbated by the fact the words are in bold print and separated from the main article.
The third complaint is that the article’s first paragraph implies that, after the realisation of the assets of the funds, the investors were $457 million out of pocket. In fact the $457 million was the balance in the investment trusts at closure and this bears no relationship to any losses investors might ultimately sustain. The true position was that by the end of February, $203.5 million would have been returned to investors. Of the $457 million, the original capital invested was $330 million, with the balance being accrued interest.

The Newspaper’s Response
The paper responds that the articles do not imply that proceedings are imminent. Rather, as the article expressly says, the barrister referred to as taking action is “working with” a number of law firms, has declined to give causes of action, or comment on when court papers will be filed. It adds: “The only proper implication to take from these and other comments is that [the barrister] is still considering the timing, nature and structure of any possible proceedings.”
It does not agree that the linking by pointer of two articles would have given the readers the impression of a fraud inquiry into Money Managers. There was no suggestion in the Money Manager article of a fraud. “We therefore believe that your client’s accusations and concerns are over-stated and do not merit a correction”.
There was no implication in the article that investors had lost or would lose $457 million. Rather it was stated that, on liquidation, the group of funds left 7000 investors owed $457 million, a statement verified by a Calibre report to investors on November 30, 2007. It could not be construed that investors would lose that amount. Further, detail of the amounts already paid out to investors ($186.5 million) and the amounts written in to the accounts ($108 million) were inconsistent with an implication of a loss of $457 million.

Further Correspondence
Southland Times editor Fred Tulett reiterates that the affected investors were clearly taking an action, that the pointer would be understood by readers as an alert to another article related to the collapse of a number of finance companies. The other complaint had been sufficiently answered.
Calibre and Money Managers reiterate that the headline conveys the meaning that action is being taken, that the pointer implies fraud in relation to the first article, and that the article content did not meet standards of accuracy required of a current financial climate.

Headline. The accuracy of the headline claim that investors are taking an action, hinges on a semantic understanding of the meaning of the words conveyed in the article’s first paragraph: “A Wellington barrister is preparing to sue…” The words following do not provide a definitive answer. But the words “preparing to sue”, in conjunction with comment declining to answer whether Calibre would be included in the action, give credence to an understanding that an action is underway.
Calibre and Money Managers give a raft of previous upheld Press Council decisions to support their case, but each example is a clear case of misrepresentation or error. This is not the situation with the article complained of.
Pointer. The words “Fraud inquiry possible” arguably conveys a certain ambiguity. It is possible a reader might have expected a continuation of the Money Managers’ story. With a story on such a serious issue, extra care should have been taken by the newspaper to avoid ambiguity. Some members considered upholding this aspect of the complaint but on balance determined not to do so.
The newspaper practice of providing pointers to other stories on a theme, is a well-entrenched one. It is even more likely that interested readers would have read on for their enlightenment and been quickly disabused of any confusion.
The first paragraph: Calibre and Money Managers’ argument that the paragraph implies that investors were $457 million out of pocket lies in a similar category. While it is possible a reader might initially have made that leap, reading on would have quickly cleared the matter up.
Calibre and Money Managers rightfully argue for particular care by journalists in reporting complex finance matters, clearly with reference to a current situation of company failures and investor uncertainty. Newspaper reporting of such complexities brings its own difficulties in simplifying for readers. But it has to be noted in this case that the intro is not inaccurate, and the reporting in no way can be categorised as sensationalist.

The Press Council acknowledges the need for stringent accuracy in reporting financial matters in the current climate. But it is asking too much to expect a newspaper to identify and remove every possible ambiguity contained in phrases and clauses read in isolation. The intelligence of readers should not be so readily discounted.
For the reasons above, the complaint is not upheld.

Press Council members considering this complaint were Barry Paterson (Chairman), Aroha Beck, Ruth Buddicom, Kate Coughlan, John Gardner, Penny Harding, Keith Lees, Denis McLean, Alan Samson and Lynn Scott.
Clive Lind took no part in the consideration of this complaint.


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