The U.S. Securities and Exchange Commission has charged two individuals - accountant Gary Herwitz and former SIRIUS executive Tracey Stanyer - with insider trading ahead of news in 2004 that Howard Stern was moving to SIRIUS Satellite Radio.

The SEC stated in court that Herwitz allegedly bought SIRI stock on Sept 30th 2004, after learning in confidence from a colleague at Mahoney Cohen that Stern had received an offer from Sirius and that the parties were negotiating. The SEC also alleged that Tracey Stanyer bought SIRI stock on October 5th 2004, after learning in confidence from a senior Sirius executive that Sirius had signed an agreement with Stern.

Herwitz, a CPA and former president of the accounting firm Mahoney Cohen & Co., agreed to pay $52,000, while former SIRIUS Vice President, DaimlerChrysler Alliance Stanyer agreed to pay $35,000.

The judgment against Stanyer also bars him from acting as an officer or director of a public company.

[Reuters]

[Google Cache of Stanyer's bio page on SIRIUS]

I really just don't know what to make of this. First the Alexa debauchery and now this from Bridge Ratings:

“It would appear now that Sirius satellite radio will not exceed our projections first published in September. After interviewing Stern listeners who actually subscribed to Sirius in October, we are projecting an improving subscriber base of over 800,000 in the fourth quarter, but this number is lower than previously expected. Though pacing is strong for both satellite companies, this quarter will see Sirius surpass XM in quarterly subscriber count!”

Originally, Bridge stated one-million new SIRIUS subscribers in Q4, but it's not the revised projections that's odd, it's the competitive statement. The SIRIUS subscriber predictions are no surprise, with SIRIUS themselves stating a similar number (3+ Million by EOY, up from 2,173,920 subscribers).

What's odd is that Bridge is essentially saying that XM will have under 800,000 subscribers in Q4. Yet XM has reaffirmed continuously that they will break 6 million subscribers (up from 5,034,642 subscribers). What gives? How can a survey of Stern listeners determine the subscriber count for a competing satellite radio service? Where's the data for that? Also, why the survey in cities other than New York (where the Stern following is the greatest)?

It just doesn't add up. 

[Bridge Ratings via R&R]

Some interesting stuff out from Citigroup today as analyst Eileen Furukawa said in a report to clients (Linkage: PDF, 500k) that "satellite radio is one of the few growth stories in media."

"In our view, satellite radio is one of the few areas within the media sector that offers attractive secular growth," Furukawa said. "The industry has already experienced robust growth from 4.4 million subscribers at the end of 2004 to our estimate of 9 million by the end of 2005."

Interesting thing to note is that they compared XMSR to AOL back-in-the-day when they were first launching. If you use AOL's peak valuation multiple when it was first ramping up subscribers, XMSR would be valued at $270. Good lord man! (Linkage: XMSR Image - 150k)

[MSN Money] 

(Note: my Acrobat keeps blowing up on me whenever I try to open the PDF, so please let me know if it doesn't work or something.)