Are Regulators Coming to Their Senses?
Last week I gave a talk to several dozen attorneys in the regulatory and enforcement staff of the New York Stock Exchange. It was a very flattering invitation when you consider that I am not exactly favorable toward the NYSE, to say the least, in my book.
The topic of my talk was the anti-naked shorting campaign.
I can't say what questions I was asked, but my message was pretty much what I said in the book. That is, that a small group of crackpots and conspiracy theorists, serving the interests of stock promoters and unprofitable companies like Overstock.com, are monopolizing and diverting regulatory attention. It's time for regulators to stop kowtowing to these people and start investigating.
I hope they were listening.
Word emerged today that at least some regulators may be getting the message. The Securities and Exchange Commission has issued a subpoena to Overstock.com. It's not clear exactly what the SEC is probing, but Overstock CEO Patrick Byrne issued a press release saying that he "celebrates" the subpoena -- which I read as "laments," translating Byrne-speak into the English language.
A tipping point? I hope so.
UPDATE: Here's what the SEC wants from Overstock, which was appended to Byrne's spin-a-gram:
"The subpoena requests a broad range of documents, including, all documents relating to the Company's accounting policies, targets, projections, estimates, recent restatement, new technology systems and their implementation, and communications with and regarding analysts. In addition, the subpoena requests all information relating to the filing of its complaint against Gradient Analytics, Inc., communications regarding shareholders who did not receive the Company's proxy statement in April 2006, communications with shareholders, and communications regarding short selling, naked short selling, purchases and sales of Company stock, obtaining paper certificates, and stock loan or borrow of Company shares. The Company intends to review the subpoena and respond in due course." (emphasis added)
Hopefully the SEC is probing Byrne's aggressive effort to shift blame to short-sellers for his company's misfortunes, and in particular his tactics and promotion of the anonymously run "sanitycheck" website.
P.S. As my talk before the NYSE enforcement staff indicates, I'm more than happy to chat with any group, anywhere, about the subjects explored in the book. Just drop me a line.
Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.