Monday, June 08, 2009

A Lecture on Earnings Manipulation From an Expert: Patrick Byrne

Byrne preparing his pompadour for the TV cameras

Jeff Matthews today describes a bizarre, though unsurprising, phenomenon: how the nation's premiere corporate spinmeister and earnings-manipulator, CEO Patrick Byrne, has been all over the media lately, lecturing on the evils of corporate spin and earnings manipulation.

He also has been preening in the pages of Success magazine, when his unbroken record of losses would seem more suited for the pages of Failure magazine.

He appeared on Fox Business News to pontificate on the economy and smear short-seller Jim Chanos.

What's next? Byrne as an expert on corporate ethics? Or journalism? In one of his more recent publicity stunts, he sought membership in the Society of American Business Editors and Writers, and then feigned outrage when he was rejected on the grounds that his Deep Capture blog was a p.r. apparatus.

Beyond the sheer, noxious irony at work here, what gets me about this is how atrocious the media has been in its handling of Patrick Byrne. It's as if some people in the media haven't learned a thing from the recent financial collapse. You know, obvious stuff like "the public is tired of corporate cheerleading."

One really has to wonder what motivated the Salt Lake City Tribune, in this story, to buttonhole Byrne of all people to pontificate on corporate management of earnings releases. It's just embarassing. Good heavens, a little elementary research would have found ample material on the web on how Byrne has engineered earnings at Overstock, much of it by white collar crime-fighter Sam Antar.

For instance, Antar pointed out in some detail in his blog last year how Byrne manipulated the earnings announcement in the first quarter of 2008.

While the Trib's sloppiness is not comparable with the atrocious media coverage of Pegasus Wireless or Biovail, it's the kind of thing that erodes public confidence in the news media, particularly the business news media. The point being that we are not stenographers, and if a CEO blatantly is blatantly untruthful or dishonest, we have no obligation to serve as his megaphone.

© 2009 Gary Weiss. All rights reserved.

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