March, 1994 - The Kiplee - Dorfman Incident
Kidder Peabody broker A. Karl Kiplee. According to Financial Planning on Wall Street, Kiplee admitted that he planted inaccurate stories in the media about Epitope, Inc., a small biotech company. Allegedly, he gave CNBC and then-Money magazine reporter Dan Dorfman (perhaps the best-known financial journalist in the nation), false information, causing Dorfman to report in March 1994 that Epitope's AIDS test stood only a 1% chance of receiving FDA approval. This allegedly caused the stock to drop in value, yet in December of that year, the test was indeed approved.
Epitope, alleging false and misleading statements, settled a suit with Kiplee, and even considered a suit against Dorfman, merely because Dorfman quoted Kiplee. As Dorfman later told Business Week, one "just can't be sure that everyone [you] speak to is 100% ethical."
But that wasn't Dorfman's only brush with controversy. Business Week reported in late 1995 that Dorfman was under investigation by federal authorities regarding his relationship with a Wall Street publicist. According to Business Week, the allegations were that corporate clients paid fees to the publicist, a good friend of Dorfman's, in exchange for having Dorfman say positive things about the company. There is no indication that any money was exchanged between the publicist and Dorfman. However, Dorfman was fired by Money magazine; and he later left CNBC.
Editor's Note from Memory: Dorfman was a big short seller and motivated by his greed.
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