The San Jose Mercury News said yesterday it is reassigning columnist Chris Nolan to another beat because she bought stock from a friend at an insider's price.
Editor David Yarnold said Nolan would lose her high-tech gossip column, after a week's unpaid suspension, because she had "at a minimum created the appearance of a conflict of interest." He said that two unnamed editors would be disciplined later and that the paper would reexamine its ethics policy.
Nolan made a $9,000 profit after the chief executive of Autoweb.com arranged for her to buy 500 shares at a relatively low opening price just before the company went public and the stock jumped in value.
"I don't think it was wrong to take a gift from a friend," she said yesterday. "And it wasn't really a gift. These things can be very risky. It's more like buying a lottery ticket."
Nolan said she had four conversations with Mercury News editors before buying the stock -- and three more about a first-person piece on the deal she was writing for Fortune -- and that no one vetoed the idea. "I know I did what I was supposed to do," she said.
But Yarnold said last week that Nolan should have waited for definite approval. He called Nolan's earlier explanation that she needed the money "an insult to the Mercury News," saying she earns a six-figure salary. Asked if she regrets the comment, Nolan said: "Do you know anyone who doesn't need money?"
Nolan maintained that she had planned not to write about Auto web chief executive Dean DeBiase, who arranged the deal.
"People are starting companies here left and right," Nolan said. "Many are in their thirties and forties. Reporters have friends who are starting companies."
She said she has not been told of her next posting after being dropped from the business staff. "It's a very difficult situation," Nolan said.