Thursday, April 30, 2009

Overstock.com Stalking Victim Exposes Creepy Hedge Fund

The press has been agog recently about Paradigm Capital, a fund-of-hedge-funds run by members of Joe Biden's family, and its apparent connection with a hedge fund shut by the SEC called Ponta Negra. CJR's Audit column has the full details on this remarkable scoop by a finance blogger named John Hempton.

Among other things, Hempton was threatened by lawyers for Ponta Negra, forcing him to withdraw a post, as he detailed in a post yesterday.

So bravo, John Hempton! Right?

Wrong, according to Overstock.com's wacky CEO Patrick Byrne and his hireling, Judd Bagley.

Hempton is one of the lengthy list of "miscreants" and "crooks" and "scaramouches" and other targets of antiquarian epithets employed by Byrne.

By the way, for a long time I've been wondering where Byrne derives his strange use of insults. I searched through DSM IV until I found the source--Gomez in the Addams Family!

Hempton's nom de baloney is the "plunderer from down under," which he drew for participating in a conspiracy existing only in Bagley's mind. The man has never even written about Overstock.

The targeting of Hempton is one of the reasons I describe Overstock as a kind of petri dish for corporate crime. It's tentacles can be found well beyond the usual orbit of a third rate Internet retailer, in this case in the Byrne-sponsored blog, Bagley's Deep Capture, designed to silence the Hemptons of this world.

Ironically (but typical in Byrne's fantasies) Hempton was lumped in with other imaginary "tools of hedge funds." One reason it's ironic, aside from being false, is that Byrne himself runs a hedge fund, which controls much of Overstock's shares. But Byrne knows hedge funds are unpopular, so his critics are "tools of hedge funds."

John Hempton shrugged off Bagley's attacks, and the result can now be seen. Congratulations to him for a job well done.

Hempton is continuing his great work and, as the Audit points out, it will be interesting to see how much credit he gets in the media.

© 2009 Gary Weiss. All rights reserved.

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