Overstock.com Reports Profits! (By Juggling the Books....)
You have to admit: my favorite corporate crime petri dish, Overstock.com, may be many things, but one thing it is not is unpredictable. When last we left our heroes, they were reporting "profits" for 2009 by juggling the books, in the process manipulating its shares upward by one-fifth.
Yesterday, the company again announced profits, this time for the first quarter of 2010 -- and again, pulled off this fete by juggling the books, and again concocting a surge in the company's shares.
We know this is happening not because of the atrocious Utah media coverage of this company, but because of white-collar crime fighter Sam Antar, whose analysis of the latest Overstock smoke-and-mirrors show is linked above.
This time, Sam finds, Overstock was able to manufacture black ink by manipulating its return figures. Additionally, he notes, the company's internal financial controls remain FUBAR, making pretty much anything it says about its financials suspicious at best.
According to the company's latest quarterly report, the long-pending SEC investigation of these very issues is continuing. The issue before our securities watchdog is one of intent. There is now no doubt that Overstock has systematically cooked its books. The company admits to that. The question is whether the SEC will swallow Overstock's malarkey that it threw its financial statements into the stew pot strictly by accident.
Hey, that makes sense. Most fraud is an accident, right? At least it is, according to the fraudsters.
That defense is even sillier than usual, because it's a matter of record that Overstock CEO Patrick Byrne was repeatedly warned of those very accounting issues by Sam Antar -- and that Byrne responded by stalking, smearing and harassing Antar.
It remains to be seen whether the SEC will let itself be sold the Brooklyn Bridge by the con men at Overstock. Stay tuned.
© 2010 Gary Weiss. All rights reserved.