The U.S. Chamber of Commerce Has Some Explaining to Do

A reader brings to my attention a May 2007 press release from the naked shorting poster child Universal Express. The release says that Universal Express CEO Richard Altomare has been appointed to three committees of the United States Chamber of Commerce.

Yup, that's the same Universal Express that has been found by a federal court to be a multiple securities law violator, in cases stretching back to 2004. Its received some publicity in recent days for its tussle with New York Times columnist Floyd Norris.

In a recent court filing requesting that a receiver be appointed to manage the company, the SEC said:

As has been found by Court, Universal Express has since 2001 existed primarily as a vehicle to flood unregistered stock into the public market at values fraudulently inflated by the dissemination of false and misleading statements by Universal Express, Altomare and [general counsel Chris] Gunderson. Recent public statements by the company and Altomare demonstrate that this conduct is continuing unabated. Altomare’s public statements demonstrate that, absent the imposition of a receivership, additional illegal conduct that is harmful to public investors will occur.

According to the Universal Express press release, "Altomare was invited to serve as a member of Homeland Security Policy and Task Force, the Regulatory Affairs committee and the Transportation and Logistics Committee."

The Chamber has a history of opposing investor and consumer interests, and is essentially a mouthpiece for big business interests in Washington. In keeping with that record, it has supported efforts by inept corporate chieftains to shift blame to "naked short selling." Altomare, of course, has been flapping his big mouth about that non-issue for years, making him a leading troubadour of the Baloney Brigade of penny stock merchants and crackpots.

But even for the Chamber, appointing an Altomare to three committees is over the top.

I'd say the Chamber has some explaining to do.

UPDATE: The SEC on Friday asked a federal court judge in New York to find Altomare, general counsel Chris Gunderson, and Universal Express in civil contempt to prevent further violations of the securities laws. If the SEC gambit is successful, the two will wind up in a place where baloney sandwiches are common fare -- jail.

Read the blood-curdling details in the court documents linked here.

Universal Express responded, as it always does, by issuing a press release. Apparently the SEC sent the company a subpoena demanding that it prove its naked shorting jibberish. The nerve!

". . . . This continuing attempt at abuse of power against our Company and many other 'whistleblowers' on 'naked shorting' is ironic coming from an agency that has permitted trillions of unregistered and counterfeit shares to be issued in the names of smaller public companies, putting over 6,000 of such companies out of business and destroying the investments and jobs of hundreds of thousands of Americans," continued Mr. Altomare.

"The SEC simply misunderstands the facts about our shares, which have been properly issued and clearly recorded in our published reports; while the SEC has illegally permitted marketmakers, broker-dealers and hedge funds to secretly issue trillions of counterfeit shares in companies' names in violation of the Counterfeiting Statutes of the United States. They have committed and continue to allow trillions of crimes to occur daily."

The Baloney Brigade marches on.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Whither Barron's in the News Corp. Empire?

One essential element has not been mentioned in the tussle between Dow Jones and Rupert Murdoch is the fate of the prestigious, market-moving, influential Barron's financial weekly.

That absence stood out like a sore thumb in the "agreement in principle" between Dow Jones and News Corp., anticipating the all but inevitable takeover.

The text was posted here last night.

Note that this agreement is narrowly constructed to cover just the Wall Street Journal and the Dow Jones news wires. Barron's is not mentioned, and has been ignored in the public back-and-forth over editorial integrity.

Under this agreement, the editor of Barron's can be replaced immediately, and this publication could immediately be used as a showpiece for News Corp. staffers and editorials. Its staffers, if not covered by the existing CNBC deal, could be immediately utilized by the new Fox business news channel.

Or at least, that's what I would do if I were Rupert Murdoch. I'd put one of my own people in charge of Barron's ASAP.

I wonder if this omission is a reflection of the lack of importance given to Barron's by both sides.

Or is it a reflection of what has been widely known for some time -- that the management of Dow Jones is grievously incompetent?

If so, we in the media who are watching this deal are not any better. Apparently nobody has given the fate of Barron's any thought. Remember that this is not a stock-touting newsletter. It is a respectable, highly reputed investment journal with a reputation for hard-hitting investigative reporting. (Full disclosure: I used to work there in the early eighties.)

In the media coverage of the Murdoch takeover, Barron's usually gets mentioned only in an offhand fashion as part of the Dow Jones organization. It has otherwise been overlooked, and nobody has noticed that it is not covered by the management-employment guarantees and editorial-independence strictures that have been discussed.

Dean Starkman of CJR Daily's Audit section says that the News Corp. "can't cover" the U.S. business story, and details why in an article yesterday. If there is any validity to that point of view, it certainly applies to Barron's as much as it does the Wall Street Journal. Yet the media has ignored this whole aspect of the takeover as much as the Dow Jones board.

Dean says the media has done a "terrific job" covering this story, but I am not so sure.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Should Newspapers Police Content From Corporate America?

That issue has arisen because of a full-page ad in the New York Times, filled with distortions, fantasies and at least one outright lie, from Universal Express. This basket case of a company, a subject of multiple SEC court actions, was responding to an article by chief financial correspondent Floyd Norris.

In a comment in his blog this afternoon, Floyd reports as follows:

Stephan Jespersen, the Times’ director of advertising acceptability, offers the following reaction to the complaints over the ad:

“It is the policy of the New York Times to accept advertising that disagrees with our reporting, whether it be on international affairs, business news, or our own editorials. Universal Express has done exactly that, as well as comment on their own court case. We do this because we believe that this ad and many like it are part and parcel of a free press. To limit a company’s right to free expression to voice their opinions would, in our opinion, cut off an important vehicle of free speech.

“The policy of the New York Times when it comes to accepting ads that promote specific stocks, however, is a little different. We require that all stock offerings in advertisements be registered with the Securities and Exchange Commission or the Attorney General of New York State. If a stock is registered with the SEC for example, the SEC then becomes the organization to police the stock, and its promoters, not The New York Times.”

I'm afraid I must take issue with Mr. Jesperson. The New York Times owes it to its readers to not allow its pages to be forums for corporate lies and blame-shifting. Note the furor that erupted over Pinnacle Development Partners over its ad campaign, as reported by the Wall Street Journal blog last October:

Today, financial-fraud watchers are asking why Newsweek, the WSJ, and others accepted ads from Pinnacle, which raised money through “an extensive national advertising campaign” promoting its investment returns in some 40 publications, according to the SEC.

No, the Times does not have a legal obligation to remove ads from companies seeking to tout their share price or spin fairy tales. But it has a moral obligation that needs to be taken seriously.

Also there is an irony in Mr. Jesperson's comment about stocks needing to be registered with the SEC, because Universal Express has been selling unregistered stock on a massive scale, according to the SEC. Altomare has been barred by court order from serving as an officer of any public company, including Universal Express.

I don't mean to single out the Times. The same principle applies to the major financial magazines who ran ads from a Chinese penny stock company, as Kiplinger.com reported some weeks ago. Newspapers and magazines shouldn't bury their heads in the sand, and take a "not my job" attitude when sleazy corporations buy their way into their pages.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Another Naked Shorting Poster Child Bites the Dust

This one is CyberKey Solutions, and its CEO was indicted by a federal grand jury today on charges of lying to the SEC in its probe of a pump and dump scheme involving the company.

The SEC litigation release on the indictment can be found here.

As recently as last October, CyberKey was pointing to "fails to deliver" in its stock as an excuse for the company's lagging share price. You gotta love this little sermon in the press release from Buyins.net, a stock-touting firm that is trying to cash in on the naked shorting loons:

"Short selling, especially 'naked' short selling, is a drain on the investment community and robs millions of dollars from investors. It also significantly reduces the ability of small cap companies to raise capital for their operations. By identifying the fact that there is a short position, we hope to address the issue and see a more accurate share price," stated Jim Plant, CEO of CyberKey Solutions, Inc.

Now, here's another perspective on this righteous victim of "naked shorting," from the SEC announcement today:

The two-count indictment charges Plant with orchestrating a fraud scheme in which he personally made in excess of one million dollars selling Cyberkey shares at inflated prices while lying to the public about Cyberkey's business prospects and management.

According to the indictment, Plant was responsible for disseminating, in an effort artificially to inflate the price of Cyberkey's shares, numerous false and misleading press releases between December 8, 2005 and March 15, 2007. These press releases contained materially false and misleading statements concerning 1) a fictitious $24.5 million purchase order that CyberKey supposedly received from DHS, when as Plant knew, that DHS purchase order did not exist; 2) revenues and profits that CyberKey had supposedly realized from the fictitious DHS purchase order, when as Plant knew, CyberKey did not receive, and did not expect to receive. . .

Etc. etc. You get the idea. Perhaps, if bail is denied and he has to report to prison, Jim can buy some nice memory foam from another phony "naked shorting victim," Overstock.com, to keep him comfy?

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

The Indian Mangoes Arrive

Yummy!

The first Indian mangoes of the season -- which also happen to be the first Indian mangoes ever imported, thanks to a new India-U.S. trade pact -- have arrived. And boy, are they yummy.

You can buy them at ..... nah, I think I'll be selfish and not say where you can buy them. You see, they are only available in the New York area at a few stores that specialize in Indian products, and they sell out almost immediately. So sorry, but I don't want to jeopardize my supply.

Oh, and don't try finding 'em on the Internet. None are available on Ebay, and the shippers that you do find will only ship mangoes within India. See, they have to be irradiated to eliminate fruit flies, which is the reason mangoes were previously unavailable in this country.

If you ever try one (and I hope you don't, so there will be more for me), you'll know what I'm talking about. Indian mangoes are simply not comparable to the pulpy, weird-tasting imitations that are imported from Mexico.

Right now, if you can find them (and I hope you don't), they are sold by the case -- $30 bucks for twelve succulent Kesar mangoes. I've heard of prices as high as $4 a mango. Believe me, they're worth it. They're shipped in by air freight, but hopefully in the future they will be coming in by ship.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Journalists as Furniture

Talking Biz News reports today that Wall Street Journal reporters stayed out of work this morning. They're upset about slow progress in union contract talks, and of course upset by negotiations to sell the company to Rupert Murdoch.

The underlying rationale behind this move is that journalists matter to the functioning of a newspaper, and that the Journal's staff of first-class journalists is pretty nigh irreplaceable.

I therefore suggest that my colleagues at the Journal read the article by Ken Auletta in this week's New Yorker. I would suggest they read the fourth page of the online version. Auletta hearkens back to Murdoch's acquisition of a magazine where he was employed:

To try to forestall a Murdoch takeover of New York magazine thirty years ago, about forty writers and editors and art directors went on strike. I was at the magazine then, and, with delusions that I was on a diplomatic mission, led a small delegation to visit Murdoch’s outside counsel, Howard Squadron. I was certain that, once Murdoch understood that the staff would leave, he would retreat. Squadron listened politely, and replied, “You don’t understand. If you leave, Rupert will replace you like he replaces furniture.”

That sound you hear at World Financial Center is a moving van. Word is out today that the "editorial safeguards" hammered out between Dow Jones and Murdoch aren't safeguards at all.

UPDATE: The New York Times now says that the article to which I just linked, which says that Murdoch would have power to hire and fire editors, is inoperative. In a kind of non-correction correction, the Times says that power would reside in an independent board.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

A Naked Shorting 'Victim' Strikes Back

Readers of the New York Times business section today are in for a special treat -- a full-page ad from the "naked short selling victim" Universal Express, responding to an article in the Times on Friday by columnist Floyd Norris.

Here's a link to the obligatory press release -- the company's premier product -- which includes a link to the ad.

The article described how the SEC has been unable to take effective action against this miserable little company, despite years of litigation. Universal Express is also notable as a leader of the phony anti-naked-shorting stock market conspiracy cult, and was prominently featured in Wall Street Versus America.

The ad does not, of course, respond the points Floyd raised in his piece, because there really isn't much to say. Everything is in the public record. What the ad does, however, is repeat the usual Baloney Brigade swill, such as that "6,000 companies" -- which Floyd has noted would comprise the majority of publicly traded companies -- are victims of this awful if nonexistent scandal.

Similar figures were thrown around a few years ago by John O'Quinn, the class action lawyer. As I point out in WSVA, I phoned O'Quinn to see if he could substantiate them and never heard back from him. Big surprise.

The ad also makes reference to "hundreds of employees." Apparently the company has expanded greatly from the time of its last Form 10KSB/A, in which it reported 37 employees. Which reminds me of something. As one reader points out, doesn't the Times vet ads such as this for factual accuracy? Or will it print any old crap if it comes from a seemingly respectable company?

The Baloney Brigade, whether it be embodied by Richard Altomare or Patrick Byrne, is doing more than marching on. It is thumbing its nose at the SEC.

UPDATE: Floyd responds in his blog:

The ad’s connection to reality is a strained one. There is no evidence that this company is being targeted by naked short sellers, and for good reason. The company sells billions of new shares every month, in blatant defiance of securities laws. (When I wrote last week, you could get 25 shares for a penny; now the price is 50 for a penny.)

He concludes: "Speaking as a shareholder, I hope The Times got payment for the ad before it ran."

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Today's Double Dip of Irony

It's a hot day here on the East Coast, so I thought that it might be refreshing to dive into a double-dip, extra-creamy, delicious ice cream cone of irony.

It seems that Overstock.com, which employs a full-time cyberstalker as its director of communications -- who set up an anonymous astroturfing website to stalk his boss's opponents, and uses spyware to glom IP addresses -- this toilet bowl of a company is actually dedicated to Internet privacy.

That's right, folks, and we have it on the authority of that most reliable of sources, a press release from a company called Cenzic. The press release is entitled "Overstock.com Teams With Cenzic to Keep Customer Data Safe." It begins "To minimize the exposure of consumer data collected via its Web site, Overstock.com is teaming with Cenzic, the leading provider of application security assessment and risk management solutions, to optimize their Web security systems."

While I can understand why this release would say that "at Overstock.com customers are the number one priority" -- since, after all, the company loves its customers so much that it loses money on every sale -- I think that the assurances that "all Web site applications are resistant to hacker attacks and provide the highest level of data security" ring a bit hollow.


That's because the executive I mentioned earlier, the nauseating Judd Bagley, has boasted about using spyware, which he has planted in emails and in Internet postings, and even directed against his friends on an anti-Wikipedia website. He then uses the data to spin fairy tales on Overstock.com's antisocialmedia.net corporate smear site.

How can you trust a company to keep its customer data secure when its Director of Communications engages in such unethical, legally questionable tactics?

Indeed, one of the reasons that Bagley's make-work project, a Wikipedia wanna-be called "Omuse," has been a flop is that you can't contribute to it without giving the glassy-eyed person pictured above your credit card number. No wonder Omuse has, embarrassingly, become little more than an advertising vehicle for a few Overstock auction sellers. It remains languishing in "beta" despite a promise it would emerge from that state by now.

Anyway, let's put aside such questions for now, and savor the delicious, double-dip of irony this press release provides us. Yummy!

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

'Sacrificed at the Altar of Commercial Enterprise'

That's the verdict of a friend of murdered Wall Street Journal correspondent Daniel Pearl, referring to the new movie A Mighty Heart. Here's another article on the movie by the same journalist, Asra Nomani.

I didn't know Pearl or seen the movie, so I can't speak to whether the movie is faithful to his life or not. But I do know that the way the movie was made was certainly not.

I was in India when the movie was being filmed in the town of Pune, and the Indian media was filled with accounts of thuggish treatment of locals and journalists by Angelina Jolie's security men. One airline steward, who worked on a plane hired to transport Jolie and her entourage, told me about how he was roughed up by a British "security" person, employed by the actress, after he dared to use his cell phone camera to photograph the delicate princess.

Here's a Newsday article about how a photographer got similar treatment. Were he alive and covering that event -- he was New Delhi bureau chief, remember -- Pearl might have been subjected to similar treatment.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

A Pact to Guarantee Editorial Integrity?

Reuters reports that Dow Jones and News Corp. have "basically agreed" on a pact to guarantee Dow Jones's editorial integrity. If so, this means that Rupert Murdoch's takeover is pretty much a done deal.

I think any such agreements aren't worth the paper they're written on, but then again I'm cynical. Still, I wonder if there is even an attempt made to prevent the kind of layoffs that I see happening down the road. I'm sure Murdoch will try to pare down Dow Jones News Service, for instance, by requiring Wall Street Journal reporters to contribute to the wire. That would erode the intergrity of the Journal by simply giving Journal reporters a lot more work to do.

Hell, I've seen that happen at a number of news organizations without Rupert Murdoch or some other bogeyman trying to gain control. It just happens when you try to squeeze profits from the newspaper biz.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

How Not to Expand Advertising Revenues

A reader brings to my attention an intriguing article that ran on Kiplinger.com a few weeks back. The subject was a heavily promoted penny stock called Guangzhou Global Telecom.

Kiplinger writer Tom Anderson notes that "Shares of the small Chinese retailer started trading here on May 15 with an opening share price of $1.75. In little more than two weeks, Guangzhou soared 51% to close at $2.65 on May 31." The shares are now back down to less than a buck and a quarter.

Nothing unusual -- so far. But then Anderson points out:

Full-page advertisements that appeared in BusinessWeek, Forbes and Fortune make Guangzhou Global Telecom (symbol GZGT, quoted on the OTC Bulletin Board) sound like a major player in the world's most populous country. They say that Guangzhou has partnered with China Mobile, China Unicom and China Telecom, and that its "major carrier partnerships account for nearly $50 billion in revenues." Readers are encouraged to buy Guangzhou's stock because it will "fuel your portfolio for explosive growth."

Kiplinger rejected the ad, he said, "because the claims made in the ad could not be substantiated and because our inquiries raised more questions than they answered. In fact, the more we looked at this new stock, the more our eyes burned."

Anderson's article went on to raise doubt about the valuation of the company. (Not surprisingly -- this has been the trend recently -- he promptly come under attack from anti-naked-shorting nuts on Internet message boards.)

What's important here, I think, is not that a crummy little company was overhyped, but where it was overhyped. National business magazines need to exercise care, even in a poor advertising environment, to ensure that they are not used for stock promotions.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

The "$54 million Pants" Lawsuit is Dead

Delighted to see that the famous $54 million lawsuit against a Washington, D.C. dry cleaners ended in a victory for the defendants. This gained national publicity as the epitome of a junk lawsuit, and a ruling in favor of the plaintiff's would have been used by advocates of so-called "tort reform" to further cut back on legal protections for the public.

The irony is that consumers actually make inadequate use of small claims courts to enforce their rights. Lawsuits like this give the entire system a bad name, and are losers for all concerned.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Walking in the Footsteps of Giants

In an item on Friday I described how Universal Express, a leading standard-bearer of the anti-naked-shorting conspiracy cult, is fighting a hard and losing battle against those blue meanies at the SEC. Well, you will be interested to know that there is a lot more at stake than just one silly little corporate chamber pot.

The following appeared in a press release today from Universal Express CEO Richard Altomare, decrying an SEC effort to put his company in receivership:

"Segregation, women's rights, gay rights, fascism and even unpopular wars have taken intelligent and well-intended people decades to realize that the status quo may have been wrong. Naked short selling and today's SEC unchecked policies are part of that same critical thought process. When legal status quo is questioned, the individuals who question those practices must be persistent, resilient and believe the results are worth the battle. . . .


"I am sure that Rosa Parks, Susan B. Anthony and others, who questioned previously accepted 'legal' practices, were vilified, criticized and even demonized prior to the truth finally surfacing. When the cause is just, the enemy must be engaged. Naked short selling and the unchecked abuse of power of a governmental agency are such valuable causes worthy of the battle. We will help the truth to surface. . . ."

The Baloney Brigade marches on.

UPDATE: Floyd Norris of the New York Times has a good follow-up in his blog:

The number of companies affected by naked short selling keeps growing — at least in the minds of some.

Richard Altomare, who continued to serve as the chief executive and only director of Universal Express for months after a federal judge barred him from serving as an officer or director of a public company, has the latest number.

Last week, Universal’s general counsel, Chris Gunderson, told me 3,000 companies had been destroyed by naked short-selling, a number he raised to 4,000 after I asked for a list. Now Mr. Altomare says “6,000 companies were damaged or failed due to the trading problems caused by naked short selling.”

Floyd observes that "There are about 9,500 companies that file financial statements with the S.E.C., so that is roughly 60 percent of the total."

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

The Fraud was INSANE!

CNBC's "Business Nation" program has a fascinating segment Wednesday night -- a "reunion" of sorts between Eddie Antar, mastermind of the Crazy Eddie stock fraud of the 1980s, and his nemesis and cousin, former Crazy Eddie CFO Sam Antar.

Sam, of course, has gone straight and is now working with regulators and law enforcement and exposing corporate chicanery and fraud. As Sam himself often points out, it takes a crook to know a crook. Recently he has employed his genius at ferreting our corporate wrongdoing by rooting out chicanery and accounting games at the Overstock.com red-ink machine.

In the CNBC segment, Sam confronts Eddie and engages in a heated exchange. Here is a New York Post article on the segment, and an article in Marketwatch by Herb Greenberg, who hosts the segment.

One interesting detail -- fully addressed in Sam's blog -- is the notion promoted by Eddie that, despite the massive nature of the Crazy Eddie fraud, it was a boon for consumers.

Responding to Eddie's contention that "you can't have a company that runs for 22 years that was a fraud," Sam observes that it is, indeed possible -- and happened:

At crucial times to Eddie and Antar and his father Sam M. Antar, Crazy Eddie’s sales were made up and not real. In 1986, we channeled about $2 million from funds previously skimmed as a private company (before we went public) and put the money back into the company to increase sales. A few days later, Eddie Antar and his father cashed out over $30 million in stock.

We sold merchandise to trans-shippers at a little bit above cost and at times even below cost to inflate our store level sales performance. Eddie Antar, his brothers, and brother-in-law laughed all the way to the bank as they continued to sell stock at inflated stock prices.

Crazy Eddie was an empire built on deceit. The company was rotten at its core.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

A Second Supreme Court Assault on Shareholders

The media today was alive with coverage of the Supreme Court decision on class action suits, and it even warranted the front-page lead in the New York Times. This was a bad decision, the second "drop dead" to investors from the Supremes in the past few days.

The high court ruling gave a ridiculously strict interpretation to the Private Securities Liitigation Reform Act 1995. This law requires that plaintiffs to demonstrate intention to deceive or "scienter." The law requires that the plaintiffs show a "strong inference" that the defendant "acted with the required state of mind."

The Wall Street Journal observed:

In her written opinion, Justice Ginsberg defined a new, stricter test to assess the viability of shareholder suits. The trial judge must "consider the complaint in its entirety," Justice Ginsburg wrote, specifically, "whether all of the facts alleged, taken collectively, give rise to a strong inference of scienter," or the intention to deceive. The judge must also consider "plausible opposing inferences," she wrote.

The effect of this will, of course, make it a lot tougher to bring class action suits. Putting aside the fundamental problem with class actions -- which is that they benefit the lawyers a heck of a lot more than investors -- what this means is that corporations have one less restraint against bad CEOs and bad companies.

That, added to a milquetoast SEC, means that Enron and the other corporate scandals of a few years back are a declining memory. It is business as usual in Washington, in its bear hug of Corporate America.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

The SEC's Impotence at Combating Fraud

Floyd Norris has a terrific column in the New York Times today on the naked shorting poster child Universal Express, and how its serial violations of the securities laws have not been effectively chased down by the SEC. Here is a link to a non-subscription version.

This is not a new story. I wrote about Universal Express and its CEO, Richard Altomare, in my book, and even then it was starting to show its age. As Floyd points out:

The case of Universal Express, a small company that loses money even faster than it issues news releases, is not very important on its own merits. But it shows how hard it can be for the SEC to halt what it views as a fraud. The agency filed suit against Universal in 2004, but the company is still funding itself by issuing billions of unregistered shares.

It's also an example of an increasingly disturbing trend, which is how companies that commit fraud use the naked short selling bogyman to shield their actions.

That was true to a limited extent during the 1990s, but has received even more mileage because of the corrosive influence -- and deep pockets -- of Overstock.com's CEO Patrick Byrne. Byrne's ability to squeeze political mileage out of a crackpot cause has made life easier for the likes of Altomare and Universal Express.

The SEC, as Floyd points out, has been adept at throwing lawsuits at Universal Express, and yet the company is still thumbing its nose at the SEC.


Floyd also touches on Universal Express's status as "victim" of nonexistent "naked shorting." Indeed, as I pointed out in Wall Street Versus America, the company is a pioneer at use of naked shorting as a distraction. In recent years it has become a hero of loony stock market conspiracy websites, especially the "sanitycheck" website run by former used medical equipment peddler Phil Saunders.

SEC chairman Christopher Cox, unfortunately, has encouraged crooked and inept CEOs by his recent statements, previously reported by Floyd, brown-nosing anti-naked-shorting nuts. Such comments don't mollify the kooks, and they undercut SEC actions against companies that use naked shorting as an excuse. Investors in companies like Universal Express are suffering because of his irresponsible political expediency.

Floyd's blog contains this gem:

Both [Universal Express CEO Richard] Altomare and [general counsel Chris] Gunderson think I am wrong to focus on the company’s conduct, because the only important issue is naked shorting. Mr. Gunderson said that practice had “destroyed 3,000 companies,” a number he raised to 4,000 after I asked for a list. He then mentioned only a few companies, among them Overstock.com, which has vigorously complained about naked shorting but has not been destroyed.

Aha! The case of the missing 1,000 companies. Someone notify Scotland Yard!

The Baloney Brigade marches on.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Goodbye, White Knight

The possibility of a Dow Jones white knight evaporated today, as General Electric said that it was abandoning talks with Pearson PLC about putting in a bid. So it appears that Rupert Murdoch's chances have increased from 95% to something like 102%.

With the Dow Jones board telling the Bancrofts to take a hike, it now appears that Rupert Murdoch's chances... hey, I just said that.

In fact, there really isn't anything left to say.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Supreme Court Gives Investors the Shaft

The highest court in the land today gave a hardy "drop dead" to investors, tossing out lawsuits against the major Wall Street banks for pumping up tech stocks in the 1990s. Here's an AP dispatch on the bad news, and here's the opinion.

Investors had sued the banks under the antitrust laws. Justice Stephen Breyer said that the suits raise "a substantial risk of injury to the securities market." In a ruling filled with rationalizations and mumbo-jumbo, Breyer cited "a serious conflict" between applying antitrust law to the case and proper enforcement of the securities law.

Now that's interesting. Don't you think that the actions of the banks is what causes "substantial risk of injury to the securities market" -- not suits seeking restitution for fraudulent conduct by those banks?

It gets better. Breyer ruled:

We believe it fair to conclude that, where conduct at the core of the marketing of new securities is at issue; where securities regulators proceed with great care to distinguish the encouraged and permissible from the forbidden; where the threat of antitrust lawsuits, through error anddisincentive, could seriously alter underwriter conduct in undesirable ways, to allow an antitrust lawsuit would threaten serious harm to the efficient functioning of thesecurities markets.

If you wonder how Breyer wandered into the la-la land described above, note what he says in the next paragraph: "the SEC actively enforces the rules and regulations that forbid the conduct in question." Yeah, right.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Does Overstock.com Have a Board of Directors?

Warning: This item is not recommended for pregnant or nursing women, children under 18, persons with high blood pressure or heart disease, or anyone with a weak stomach:

Reading the latest atrocity by the nauseating (and I do mean nauseating) Judd Bagley, Overstock.com's Director of Communications, official spokesman and resident stalker, has gotten me wondering: does Overstock.com have a board of directors?

Not "does it have a competent board of directors?" or "does it have independent board members who care about their jobs?" -- the answer to those two questions obviously being no -- but whether there is such a thing as "corporate governance" at this chamber pot of a company.

What got me wondering about this was an act of blackmail, signed proudly by Bagley, directed at the proprietor of the O-Smear website, which has exposed this SEC-investigated company's unethical conduct.

You can read about the blackmail here, but I think the letter is worth replicating below:

From: Judd Bagley
To: scipioafricanus_iv@yahoo.com
Sent: Thursday, June 14, 2007 11:51:26 PM
Subject: just thought I'd ask...

I thought I should tell you that I've have known your real identity for a while now.

Up until last week, it appeared that you'd grown tired of o-smear and all the games (which would make "outting" you unnecessary) but lately it appears that's not the case.

I don't want to cause anybody unnecessary harm, but I'm beyond tired of the lies.

If you choose to continue as you have been, I will write about you on AntiSocialMedia.net. In doing so, my goal is not to intimidate, but to let you own your words; under those circumstances, I think the lies will take care of themselves.

Having said that, I'm also very much aware of the impact this could have on your reputation, especially where you live, and I feel obligated to offer you a way out. So, if you're ready to set things right, I'll keep your name to myself and figure we'll both be karmically better off for it.

I look forward to your response (and will be PMing this to your IV account, as well).

--
Judd Bagley

Note the dictionary definition of blackmail: "to force or coerce into a particular action, statement, etc."

This may go down in history as the first blackmail letter written in smug corporate P.R. doublespeak. ("I'm beyond tired of the lies"="I'm beyond tired of the truth." "My goal is not to intimidate"= "My goal is to intimidate you and every other critic of Overstock.com") I say that because Bagley was, of course, aware that his letter would be made public. He's proud of it, you see.

Note the similarity in wording to the threat that he made against a Wikipedia administrator in late August, shortly after going on the Overstock.com payroll in his initial title of "director of social media."

No other company in the U.S. would sanction such disgusting, unethical, and legally questionable conduct by a corporate official, made doubly odious by the fact that Bagley was hired to do the bidding of CEO Byrne, and his actions have a long history of being supported and promoted by Byrne.

Any other corporate board would discharge both Byrne and Bagley -- something obviously inconceivable for the laughingstock, lapdog, functionally nonexistent Overstock.com board.

Reading this email from a corporate thug to a private citizen also makes me wonder: Is there is such a concept as "SEC enforcement" when it comes to the misdeeds of Overstock and its CEO Patrick Byrne? Or has Byrne's ancestral wealth and political influence makes that concept moot as well?

This latest episode in the Bagley-Byrne saga is a test of Overstock.com's board of directors as well as the Enforcement Division of the SEC.

The board's independent members, I understand, have been advised of Bagley's latest actions. Ditto for the SEC.


If they do nothing in a reasonably brief period of time, then the answer to the question that I posed above will be answered. It will mean that Overstock.com, for all intents and purposes, does not have a board of directors.

As for SEC enforcement -- well, just read my book and you can understand why nothing has been done. If anything is done, I would surmise, it would only happen long after Ovestock is a wretched memory.

Also today, Sam Antar has a revealing, detailed post on how Bagley and Byrne have used anti-Semitism as a tool of corporate intimidation. It makes for fascinating reading.

Oh, I almost forgot to mention: O-Smear did not respond and Bagley carried out his threat on Overstock's antisocialmedia.net corporate smear site. By so doing, Bagley showed that he is as much a schmuck as he is a blackmailer.

Bagley's "revelation" is that O-Smear is run not by the Sith Lord but by some guy in Indiana -- a private citizen who is disgusted with corporate creeps like Judd Bagley.

To make the slimy picture complete, and thumb his nose at Joseph J. Tabacco Jr. and other independent directors, Bagley put a spyware bug in his ASM post, so as to track people distributing the item via email.

The onus is now on Tabacco and the other independent board members. By serving on the board of this company, they have a moral and, I suspect, legal obligation to register strong and public disapproval of the activities of Bagley and Byrne. If they don't, their silence would be tacit approval of Bagley's and Byrne's disgraceful behavior, and they will bear full responsibility for their neglect of duty.

Quite frankly, I wonder how reputable people like Tabacco could allow their reputations to be sullied by associating with a company such as Overstock.com.

Some reaction:

The Motley Fool's Daniel Rubin calls Bagley's blackmail adventures "the most incredible thing I've seen in my seven years of following the market. "

Says Rubin:

Is there ANY oversight of all this filth? Any at all? To see this mockery go on right out in the open, and involving an American public company is starting to genuinely challenge my faith in the integrity of the system. As I've said, this is the cruelest irony of this debacle. This pitiful, puke-inducing chapter of American business never ceases to turn the stomach - cyberstalking, anti-Semitism, Sith Lords, international mobsters, conspiracies, and enough message board animosity to fuel a space shuttle.

Rubin added in another Motley Fool post: "The question is when will all [Byrne's] railing and false accusations and seemingly blatant illegal activity result in his removal and legal action? This man has left a trail of animosity and denigration of the human spirit that is awe inspiring in it's scope."

That's the question. The answer is with Joe Tabacco and his colleagues.

More reaction:

• Sleazy McSleaze Now Even Sleazier (Dealbreaker)

• Is Overstock threatening its detractors? (AOL Finance BloggingStocks Blog)

• Judd Bagley is threatening people who speak out against the management and deception at Overstock.com? (Tracy Coenen's FraudFiles blog)

Digg this!

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

You Read it Here First

According to the New York Times today, there is a growing consensus that Tony Soprano was killed in the last scene of the last episode.

Now, I don't mean to brag, but I do believe that I was the first person to make that point, in this item.

The Times also has a nice piece on Sharesleuth and my item thereon.

One technical point: it is contrary to organized crime "best practices" (so to speak) for mob "hits" to take place in front of the family of the victim. However, since Phil Leotardo was killed in front of his wife and kids, it is conceivable Tony could have been killed in front of his family.

I don't believe, however, that the entire family would have been killed, as some have speculated. Though the Sopranos took liberties with mob reality (to say the least), I don't think such a thing would be consistent with the way the series was produced.

P.S. One thing needs to be kept in mind: This is fiction. So your guess is as good as mine.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Could a White Knight Rescue Dow Jones?

The financial wires are abuzz with word that.a white knight in the form of Pearson PLC -- publisher of the Financial Times! -- is putting together partners to bid for Dow Jones.

That has got to be the truth because it was reported in the Wall Street Journal online edition, natch.

In an article sourced to the usual anonymous suspects, the Journal said Pearson has reached out to Hearst Corp. and General Electric Co.

Personally I don't think this has much chance of being pulled off, but stranger things do happen. If Pearson et al can put together a bid even significantly less than $60, I am sure the Dow Jones board will grab it.

So I henceforth will no longer say that Rupert Murdoch "will" buy Dow Jones, until this report is knocked down. The market seems to believe it.

© 2007 Gary Weiss. All rights reserved.

-----------

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, gary-weiss.com.

Dow Jones Undercuts 'Integrity' Argument

David Pauly of Bloomberg has an excellent column on one of the less savory aspects of the Dow Jones-Rupert Murdoch struggle -- the golden parachute severance packages that have been awarded to Dow Jones managers, in the event of a takeover.

This is a far cry from the big Zilch Package that will greet rank-and-file Dow Jones employees, when (not if, when) Murdoch takes over and begins slicing away at staffing.

By doing so, Pauly writes, "Dow Jones has just shown a decided lack of integrity . . . or at least shown it was no different than any run-of-the-mill company."

I don't believe that this undercuts the view that the Wall Street Journal needs to be treated as a public trust. But I do believe that it is a cover-your-rump action that is poorly timed, as well as insensitive to the reporters and editors who face loss of their jobs.

Says Pauly:

Dow Jones stock traded as high as $77.31 in June 2000. While all newspaper stocks have been plagued by the Internet, Dow Jones executives haven't been able to distinguish themselves. Zannino and his crew proved their mediocrity when they voted to protect themselves if the family does sell.

Excuse me. If? You must mean, when the family does sell.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Chris Cox OD's on Baloney

SEC members preparing for well-catered meeting

As I pointed out a few days ago, the SEC's meeting yesterday resembled a cheaply stocked delicatessen more than it did a regulatory agency, with half the agenda devoted to baloney -- the nonexistent "naked short selling" scandal, promoted by a handful of crackpots and corporate losers in the Baloney Brigade.

What the SEC actually did (involving a market clearing technicality of no importance called "fails to deliver") was less consequential than the irresponsible rhetoric emanating from the SEC chairman, Christopher Cox. The low point of the proceedings was this nonsensical comment by Cox: according to the New York Times, he contended that naked short selling is “a fraud that the commission is bound to prevent and to punish.”

OK, so where's all the punishment? Where are all the SEC enforcement actions? Where are all the customer complaints of genuine harm committed by genuine naked shorting of genuine, sound, non-money losing companies?

Why is naked short selling the only "fraud" that has no victims and no perpetrators, only a bunch of crackpots yammering about conspiracies?

The SEC has not commenced a single case concerning stocks being driven down by naked shorting, as has been alleged by the anti-shorting conspiracy theorists such as Overstock.com CEO Patrick Byrne and his fellow-traveling websites. Compare that to the thousands of cases involving long-side manipulation.

Yes, the SEC has filed a grand total of three suits involving naked shorting, and neither involved the "stock counterfeiting" or "massive manipulation" alleged by the Baloney Brigade.

One involved a hedge fund's complex manipulation scheme, which included shorting into PIPEs via a Canadian broker, where such trading was legal. But as you can see from the SEC complaint, that shorting was done to hedge the firm's positions, not to drive down the shares.

In the most recent case, Goldman Sachs got a rap on the knuckles for shorting in advance of an IPO without borrowing. Ditto -- hedging, albeit in violation of SEC rules. Cox called this "an important case and it reflects our interest in this area," but that's bull. "Important cases" don't warrant measly $2 million fines and "no admission or denial" settlements. "Important cases " don't involve situations where not a single investor was hurt.

Only one case involved naked shorting depressing share prices, the SEC suit against Rhino Advisors and Thomas Badian. That involved transactions involving "death spiral" convertibles, and again was a far cry from the systemic "stock counterfeiting" that naked shorting conspiracy nuts have claimed. As with Goldman, the suit was settled with a consent decree and a knuckle-rap fine of $1 million.

That's it as far as enforcement cases are concerned. The rest is regulatory wheel-spinning and pandering statements that have done nothing to satisfy the Baloney Brigade.

Either the SEC is turning a blind eye to a real life "fraud" on the market, as the Baloney Brigade claims, or Cox is behaving more as a politician than a regulator, pandering to what Seth Jayson of Motley Fool aptly calls a "squeaky wheel." Squeaky, shrill, and dishonest.

And insatiable. Since the Baloney Brigade is on a crusade against a nonexistent problem -- one that, since it does not exist, has no solution -- it will be never satisfied. Remember that the entire purpose of the Baloney Brigade is not to correct a "stock market problem," but to divert the attention of regulators and investors, and to provide excuses for inept CEOs and the brokers pushing their stocks.

Wall Street is no doubt ecstatic about the meeting yesterday. That's because the SEC eliminated the "tick test" for short-selling of securities. Since the 1930s, shares could not be shorted when prices are falling, but that's now out the window.

The "tick test" was a genuine protection against downward manipulation, and it is gone. And that's a good example of the Baloney Brigade's damaging effect on the regulatory process. By taking meaningless action against the nonexistent problem of naked short selling, the SEC had political cover to remove a safeguard against genuine manipulative short-selling.

I don't fault the media for being weary of this issue, as well as wary of falling afoul of the anti-shorting crackpots-- they've spread lies, mostly via Phil Saunders' "sanitycheck" website, about every single reporter who has written unfavorably about them. Several members of the media have told me that they avoid this issue for that reason, and I don't blame them.

However, I think the SEC's pandering to the Baloney Brigades requires more scrutiny. Media coverage of the SEC is notoriously flabby, and I think the failure to cut through the bull and fully analyze the SEC's actions in this area is a good example of that.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Dow Jones Surrender Negotiations Continue

Bancroft family members en route to buyout talks

Press reports suggest that the Bancroft family is "warming" to Rupert Murdoch's takeover offer, with the Washington Post saying "the family will tell the company's board of directors it can start negotiating a sale price" if Murdoch "can assure the family owners of Dow Jones that he will not meddle in the news coverage of the Wall Street Journal."

Translation: the surrender negotiations are picking up steam.

As part of its face-saving effort to salvage some dignity out of this capitulation, the Bancrofts are making a new proposal today to guarantee "editorial independence" at the Journal.

This is such utter nonsense. Even if they come up with a way to keep Murdoch from interfering with the day-to-day operations of the paper, he still controls the purse strings and it is absurd to believe that his wishes will not be heeded. Columbia Journalism Review made that oft-repeated and obvious point again today.

The newspaper's union, meanwhile, is telling its members something they know already, which is that their jobs are in jeopardy.

La lucha continua, but is endinga soona.

© 2007 Gary Weiss. All rights reserved.

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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, gary-weiss.com.

Sharesleuth 'Business Model' Succumbs to Reality

Mark Cuban's "business model" for Sharesleuth is now, officially, dead. At least that is how I interpret the latest item on the website, which -- for the first time -- concerns a private entity for which Cuban cannot profit by short selling, as he has previously.

When Cuban began Sharesleuth a year ago, he made a big stink about how this was a new "business model," in which he would trade ahead of the stocks criticized in the website.

But the weakness with that approach -- apart from the self-evident ethical issues -- is that it will tend to focus on stocks that can be profitably shorted. After all, if you don't write about shortable stocks, your publisher can't trade in advance on the items and the site must inevitably succumb.

As I and others pointed out at the time (see here and here), a good many bad stocks don't have shares that can be borrowed to permit a short sale.

Sharesleuth has turned out to be a bust, both journalistically and as a "business model." The site has written about a grand total of two stocks since it began last July and, as I said last week, Cuban's shorts have not been cashed out and have not been great money-makers. Indeed, it seems that Cuban was squeezed in one of his recent trades.

Is this the beginning of a new approach at Sharesleuth or just another archtypical Mark Cuban P.R. stunt -- such as the day he spent working at a Dairy Queen? Time will tell.

Hat tip: Talking Biz News and an alert reader.

© 2007 Gary Weiss. All rights reserved.

Digg this!

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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, gary-weiss.com.

Boycott Overstock.com?

Prominent securities attorney Howard Sirota is calling for a boycott of Overstock.com. He's doing so in reaction to an attack on him in Overstock's antisocialmedia.net corporate smear site, which attacked him (and me too, natch) in response to his concerns about anti-Semitic posts on the Yahoo board and the smear site. 

I certainly agree that this corporate chamber pot deserves a customer boycott because of the vile behavior of its CEO Patrick Byrne and his paid cyberstalker, the nauseating Judd Bagley. 

And Sirota has a point. In one December 2005 Motley Fool post, Byrne made bizarre comments on Israel and Jews that led blogger Jeff Matthews to doubt their authenticity because of what he gently described as "their apparent anti-Semitism." Any such doubts have since been laid to rest -- Byrne has acknowledgd that he is the author of this and other Motley Fool posts under the pseudonym "Hannibal100." 

Referring to odd references to Israel and New York Times columnist Tom Friedman, Matthews noted:

I can think of no clear reason for making the analogy to Friedman and Israel except one: the enemies cited in the post (Herb Greenberg, David Rocker and Jim Cramer) are all Jewish.

Even for the CEO of Overstock.com, hints of a Jewish conspiracy would represent a rather disturbing twist in the ongoing saga.

The Stalwart commented that "it's not a stretch to read an anti-Semitic tone into the letter. Not only does he finger all Jews in his conspiracy, but he, out of nowhere, throws in a jab at Thomas Friedman's unevenhandedness in covering Middle-East affairs." 

However warranted Sirota's call for a boycott may be -- and I believe that it is warranted -- I would argue that a wide-ranging, nationwide boycott of this company is already underway. 

As you can see from the chart below, customers have been avoiding the Overstock.com website since the end of 2005 -- which happens to be approximately when Byrne made his company name synonymous with "nuts" in his paranoid "Sith Lord" anti-short selling crusade.

   

Notice the particularly sharp dropoff this year, which coincides with the revelation in the media that antisocialmedia.net, which had previously engaged in illegal, anonymous cyberstalking, was secretly operated by the nauseating Bagley. 

Then you have the dollars-and-cents aspect of this customer boycott of the company, as seen from this spectacularly unspectacular income statement, below.

   

Note that the number is parenthesis is getting bigger. That is no good. Got to take off the parenthesis before bigger numbers are better. 

Last but not least we have the stock price, which is less than half of what it was at the end of '05:

   

As you can see, Overstock.com is already being boycotted by customers and investors of every race, color and creed. And mind you, for the most part, they're not avoiding Overstock.com because they don't like Byrne's behavior. They're boycotting the company because there are, quite simply, better places to buy stuff. 

That's the party to Overstock's downfall that Byrne has yet to insult -- the American people. Oops, wait a second. He has. 

UPDATE: Forensic accountant Tracy Coenen observes:

What really is the purpose of making anti-semitic remarks on a message board designed to discuss the stock of a public company? My guess is intimidation.

Howard refers to Judd Bagley and his Anti-Social Media website. Judd is an “executive” at Overstock.com, and he’s a little ruffled that people like Howard and Gary Weiss and Sam Antar are exposing the shenanigans going on there. Quite simply put, something is not right at Overstock, the shareholders are suffering because it, but Judd wants everyone to shut up already.

Judd’s really a nobody. He’s the mouthpiece for Patrick Byrne, the CEO of Overstock who is quite often referred to as “Wacky Patty” because of his delusional rantings and Sith Lord conspiracy theories.

So the executives at Overstock want to intimidate people to stop discussing all the unusual items on the financial statements, the discrepancies in the disclosures, the fact that the company waited nearly a year to write down inventory it knew was junk, and the fact that executives of the company pump the stock on a variety of message boards using pseudonyms not known to the average investor. (Rules? What rules?)

© 2007 Gary Weiss. All rights reserved. 

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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, gary-weiss.com.