Saturday, July 14, 2007

Extra! Extra! Patrick Byrne Changes Careers!

I have found the reason why Patrick Byrne, CEO of, behaves more like a spoiled prep school brat than a corporate executive. Turns out he's not a corporate official who must abide by the rules required of heads of public companies.

Nope, he is a "public figure" and above all a "journalist," a member in good standing of the fourth estate.

This latest fantasy can be found in a post by Byrne, one that has received little attention, on his personal blog.

John Mackey, the Whole Foods CEO, needs to pay attention as he deals with an SEC probe -- see Tracy Coenen's analysis. This journalist stuff may be nutty (hey, this is Patrick Byrne we're dealing with), but the insanity defense has worked for some.

Instead, the media has focused on the rather pedestrian list of excuses that Mackey has given for posting anonymously on Yahoo message boards. Compare that logical if misguided list with Byrne's rambling fish story, which clearly bespeak a man who believes that his ancestral wealth inoculates him against the consequences for telling even the most blatant lies.

Some excerpts from Byrne's missive:

"I tend to discount the thoughts of anyone who insists upon anonymity (unless there is a real security concern). This applies to everyone, whether they be executives or not."

This is an astounding lie, even for Byrne, because he has a record of embracing, endorsing and promoting anonymous Internet crackpots when they favor his cause.

He has promoted on CNBC (left) a wacko anonymous website run by Phil Saunders, a former used medical equipment salesman who runs the "sanitycheck" stock market conspiracy website under the pseudonym"Bob O'Brien." This anonymous, creepy website was for months endorsed on every page of the Overstock website as a link misleadingly labeled "market reform."

But above all, Byrne has personally endorsed and promoted an anonymous website run by his director of communications and spokesman, the nauseating Judd Bagley. The latter runs's corporate smear site, which began anonymously and was later outed as an Overstock enterprise by the New York Post and by Internet sleuths.

Byrne has enthusiastically endorsed those anonymous sites, which have aggressively smeared his critics and act as fan sites and PR vehicles for Byrne and Overstock.

Second, no executive (or for that matter, any employee) should ever go online to talk up her own company’s stock or try to bash a competitor’s stock price.

But as I have pointed out before, Byrne did just that at the tail end of a Motley Fool post in March 2006 (below).

His drumbeat of attacks on critics -- most conspicuously Herb Greenberg of are clearly designed to reassure his core buy-and-hold investors that they should not sell their shares.

I think that when a person decides to become a public figure he is relinquishing his ability to take part in public discourse without identifying himself, simply as a matter of etiquette, not law.

This would explain why he disregards Regulation FD by using the screen name of "Hannibal," not signing his full name, and not saying that he is CEO and chairman of the board of and its largest shareholder.

All that said, there is nothing about being a public figure compels one to surrender one’s 1st amendment rights.

Ditto. He views himself not as a corporate officer whose public statements are governed by SEC rules, but as a "public figure" who hsa "rights" under the First Amendment but no obligation under Reg. FD.

After claiming that some anonymous ID on the Yahoo boards is an Amazon employee, we get the pièce de résistance:

As a journalist, I cannot reveal my source for this information.

Oh, and that brings me to the title of this compendium of doubletalk and lies: "A thing called, "the 1st Amendment."

Translation: "SEC, Bite Me."

© 2007 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
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