Bloomberg has a news article about Harvard Business School asking a professor to make additional disclosures at the end of piece the professor wrote based in part on research about a publicly traded company that the professor, Benjamin Edelman, did for a paying client. The revised disclosure reads as follows:
This article draws in part on research I prepared for a client that sought to know more about Blinkx's historic and current practices. At my request, the client agreed to let me include portions of that research in this publicly-available posting. My work for that client comprised yielded a portion of the research presented in this article, though I also conducted significant additional research and drew on prior work dating back to 2004. My agreement with the client did not oblige me to circulate my findings as an article or in any other way; to my knowledge, the client's primary interest was in learning more about Blinkx 's business, not in assuring that I tell others. By agreement with the client, I am not permitted to reveal its name, but I can indicate that the client is two US investment firms and that I performed the research during December 2013 to January 2014. The client tells me that it did not change its position on Blinkx after reading my article. (Disclosure updated and expanded on February 4-5, 2014.)
I emailed Professor Edelman to ask some follow-up questions. Re the confidentiality of client's name, I asked, "Does that just mean you can't reveal its name to the public? Or does it also bar you from revealing the client's name internally at Harvard, or, for example, in response to a court order or government subpoena?"
He replied, "My agreement with the client disallows me from revealing its name. Surely a court order or subpoena would trump a private contract. In my experience this is entirely standard – I've seen scores of contracts with the same broad approach."
I asked more about his client's position in Blinkxs: "Was the client short Blinkx to begin with and did it remain so after your article appeared (seems to me the likeliest scenario)? Does the client have a long position in Blinkx? Or did it have no position? Or do you/they refuse to say?" He replied:
As of the time I did the work and published the article, I didn't know the client's position and didn't even know if the client had a position. That's their business, not mine. I didn't need to know that to do the work. Your suggestion of "the likeliest scenario" seems to me to make some important assumptions about the nature of the client's interest. Consider an investor that is evaluating an investment or acquisition opportunity. Wouldn't that investor also be interested in my evaluation of the same questions? So I'm not sure this is as clear-cut as you suggest. I receive lots of requests from lots of people with varying interests – advertisers wanting to evaluate sites and services on which to advertise, networks wanting to evaluate sites and partners, investors with myriad interests. My standard practice is to do the work to the best of my ability and respect clients' confidentiality as to the reason why they're asking.
Finally, in response to another question from me, he said his earnings from this client are "small relative to his HBS compensation."