Bambi Francisco (pictured), who covered Silicon Valley for Marketwatch.com, has resigned following allegations of a conflict of interest. As first reported by the Wall Street Journal, the issue is that Francisco, on the side, is one of the founders of a company called Vator.tv, which helps start-up companies make pitches to venture capitalists for funds via video. Francisco’s boss, David Callaway, gave her permission to work on the project on the grounds that she avoid any conflicts of interest. But the spam hit the fan when she wrote a MarketWatch story about Peter Theil, a PayPal cofounder, who happens to be her partner at Vator.tv. Francisco is open about what happened, writing about it in her final dispatch from MarketWatch. She writes:

So I have decided to run Vator.tv full-time, and I believe in the company. With much regret, I’m leaving MarketWatch, my employer for eight years, as a full-time columnist and correspondent, though I hope to maintain ties. I’m going to try my hand as an entrepreneur. I think I’m making the right decision. If I didn’t make this decision, I would always regret not trying.

Her MarketWatch colleague, Jon Friedman, says Francisco’s story is a cautionary tale. Friedman writes:

Her story underscores the point — yes, again — that journalists can get into trouble when we mistakenly come to think we’re players in our sources’ worlds. Sometimes, we can identify too strongly with them as we glimpse their lives of affluence and power. We can delude ourselves into concluding that we, too, deserve to be wealthy beyond any reasonable expectations. “Hey, if they can do it, so can I.”

The Wall Street Journal, which first reported Francisco’s conflict, is owned by Dow Jones, which also owns MarketWatch.