NEW YORK — Time Inc.'s outside lawyers have hired a private investigator to look into the business practices of financial columnist Dan Dorfman, a source familiar with the situation said.
Dorfman has been on paid leave from Time's Money magazine since Oct. 27, after BusinessWeek magazine reported that federal prosecutors were investigating his ties to a New York stock promoter.
Time's outside attorneys are investigating the issues raised by the article and have retained the James Mintz Group, a private investigation firm, to assist in the inquiry, the source said.
Executives at Time, a unit of Time Warner Inc., declined to comment, as did James Mintz. Martin Gold, a partner at the New York law firm Gold Farrell & Marks, declined to comment on the status of the investigation.
"The only thing that I'll tell you is that we are the outside counsel to Time Inc., who are conducting the investigation," Gold said. He said Time is "a longtime client" of his firm, which specializes in corporate investigations and litigation.
Dorfman, who continues to work as an on-air commentator for CNBC, said he was unaware that Time's attorneys had hired an investigator. He declined to comment further.
Dorfman has been the focus of two stories in BusinessWeek, a publication of McGraw-Hill Cos., that raised questions about his relationship with people who provide news tips for his reports. A BusinessWeek story published in October said Dorfman was being investigated by the U.S. attorney's office for the Eastern District of New York for his relationship with stock promoter Donald Kessler.
Last week, BusinessWeek published a second story that described Dorfman's use of stock picker Doug Kass as a frequent source.
"There is no evidence that Dorfman has done anything illegal in his dealings with Kass" and Kass' employer, the magazine said last week. "But his judgment can be questioned for relying so heavily on a source such as Kass with a lackluster investment record and a history of regulatory actions."
After the first article, Money Editor Frank Lalli said he asked Time's general counsel to investigate. "I continue to believe that Dan Dorfman has not violated any laws," Lalli said at the time.
Dorfman is among the best-known and highest-paid U.S. financial journalists. His daily reports on CNBC often trigger rises and drops in the stocks that are discussed.
Bloomberg, parent company of Bloomberg Business News, competes with Time Warner, McGraw-Hill and CNBC in providing news and information.