Journal held Murdoch story, report says

NEW YORK (CNNMoney.com) -- Wall Street Journal editors knew media mogul Rupert Murdoch had made a bid to buy Journal parent Dow Jones but held the story until getting scooped by CNBC, according to a report published Tuesday.

The decision by Editor Paul E. Steiger could play into the Securities and Exchange Commission's investigation into whether several hundred thousand Dow Jones (Charts) options were traded using insider information the day before news of the bid became public, The New York Times reported. The New York state attorney general also is involved in the probe.

Securities investigators became suspicious due to a spike in options trading the day before the announcement, which itself led to a 50 percent surge in Dow Jones stock. Investigations are routine when options trading shows sharp increases in front of mergers, the Times noted.

Dow Jones spokesman Howard Hoffman told CNN that the SEC and state authorities have subpoenaed the company and that it was cooperating with authorities.

However, Hoffman would not say if the SEC and NY AG were investigating suspicious options trading of Dow Jones stock ahead of news of News Corp's bid for the company last week.

A spokeswoman for the Securities and Exchange Commission would not comment on the matter.

Steiger learned of Murdoch's $5 billion bid through an e-mail Murdoch had sent him labeled "personal and confidential," according to sources quoted by the Times.

Steiger felt bound by the confidential nature of the communication and chose not to report it publicly, a Journal spokesman told the Times. The spokesman said Steiger made the decision not to publish himself, without interference from others in Journal management.

The report said talk of the offer extended beyond the Journal newsroom. Financial news channel CNBC reported the offer May 1 and the Journal posted an online version shortly thereafter.

Today's news comes amid news of even more media consolidation, Dow Jones' competitor in business news, Reuters (Charts), is itself in merger discussions with financial data provider Thomson Corp (Charts)., which has offered $17.7 billion for the wire service.