ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, January 4, 1996 TAG: 9601040040
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Bloomberg Business News
THE INVESTMENT GURU'S recent troubles began with a Business Week magazine article in October that said federal prosecutors were investigating Dorfman's ties to a stock promoter. He remains a fixture on CNBC.
Time Warner Inc.'s Money Magazine said Wednesday it has fired its widely followed columnist Dan Dorfman because he refused to reveal his sources to his editors.
Money's managing editor Frank Lalli said he couldn't evaluate the quality of the information in Dorfman's Money columns without knowing the sources, and was compelled to fire him.
``Since Dorfman is unwilling to tell me, Money's managing editor, who his sources are, I can not evaluate the quality of the information in his Money columns. Therefore, his continued employment here is impossible,'' said Frank Lalli.
The firing of one of the country's best known and highest paid financial columnists comes after Money launched an investigation into his journalistic practices that resulted in Dorfman being put on paid leave on Oct. 27.
The probe was set off by a Business Week magazine article in October that said federal prosecutors were investigating Dorfman's ties to a stock promoter.
Dorfman, whose predictions often caused stock prices to fluctuate wildly, is now left with just one outlet for his views, on cable network CNBC. He previously was a columnist for USA Today.
CNBC said it is standing by Dorfman, who earns close to $400,000 a year from the cable network, according to a person close to the company. Dorfman's total annual income previously was estimated at $900,000.
``We still have no reason to believe Dan Dorfman violated any law or failed to adhere to the policies of the company,'' said Brian Lewis, a spokesman for the General Electric Co. unit. ``CNBC has no reason to follow Money Magazine's approach in demanding Mr. Dorfman to disclose the identity of all his sources.''
CNBC said it has asked Dorfman for a particular source on several occasions and Dorfman has supplied the name.
The Business Week article that triggered Dorfman to take a leave of absence said he was being probed by the U.S. attorney for the Eastern District of New York for his relationship with stock promoter Donald Kessler.
The magazine said investigators were looking into whether Kessler or Dorfman profited from the television commentator's daily stock reports, which are watched by more than 750,000 people every day and often are credited with setting off huge rises or drops in stocks profiled on the show.
Business Week said Kessler would charge clients for introductions or meetings with Dorfman, which could lead to a favorable mention for the client's company on Dorfman's show.
Time Warner's outside lawyers hired private investigator James Mintz Group to assist in the probe, according to a person close to the situation.
Dorfman's predictions have had mixed results.
On April 28, 1995, he said Westinghouse Electric Corp. may bid $80 a share for CBS Inc. in six months. In August, Westinghouse bid $81 a share for CBS.
On the other hand, on Feb. 2 he said the Bank of Montreal might bid as high as $60 for Kemper Corp. Kemper was sold to investors led by Zurich Insurance Group for $49.50 in cash and preferred stock.
In January 1995, Coca-Cola Co. became so incensed after Dorfman said the soft drink company would attempt a hostile takeover of Quaker Oats Co., that it issued a statement saying, ``Dan Dorfman does not have a clue.''
LENGTH: Medium: 70 lines ILLUSTRATION: PHOTO: Dan Dorfman in 1993 (left) and a year later.by CNBAP