Friday, January 07, 2011

A Wolf in the Chicken Coop Named Brent Baker?

President Obama has made some truly bad appointments, of which one that definitely seems to be in that category is his naming a Wall Street exec named William Daley to be his chief of staff. I muse on that and similar topics today in my Street.com column.

There are rumors floating out of Utah today that Obama may be making an even worse decision. A Salt Lake City weekly says that a character named Brent Baker is on the "short list" for U.S. Attorney in Utah. Now, just to be clear, I don't think this is a highly credible report. The source of such items tends to be the people supposedly on the "short list," so that they might actually materialize on same. I'm sure that's the case here. But let's just s'pose for a while that such a dreadful decision is in the works.

Baker is probably the worst example I can imagine of the revolving door in action. He was a lawyer for the SEC, and then immediately became deputy general counsel of an SEC investigation target, Overstock.com. I've written frequently about Overstock in this blog and elsewhere. He also has represented Universal Express and CMKM Group, both of which are stock frauds that have made, as has Overstock, naked shorting conspiracy claims.

Nothing wrong with any of that. What bothers me is that Baker seems to actually believe that rubbish. He is a card-carrying naked shorting conspiracy theorist.

As I pointed out in this blog item, Baker engaged in a creepy rant in a blog that he used to run called sectales.com. He was responding to a post of mine talking about his role at Overstock and issuer retaliation:

Guess what? Patrick and the DeepCapture folks are all correct. I saw it from within the belly of the beast and I can honestly tell you that "bent journalists" are more of a problem for our capital markets than "retailating issuers." Give me a break.
He signed this post "Fraudstopper." "SECTales" went offline right after that.

Do the feds really intend to bring in to a sensitive post somebody who talks about "bent journalists," i.e., journalists who turn the heat on crooked CEOs? That's the kind of rhetoric that's found in penny stock bulletin boards, usually used by stock promoters. Or praising Byrne and the astroturf site he created to harass critics of the company?

He also says that Bear Stearns was a victim of naked shorting and not its own sliminess. He was quoted by Matt Taibbi as follows:
Asked to rate how obvious a case of naked short-selling Bear is, on a scale of one to 10, former SEC counsel Brent Baker doesn't hesitate. "Easily a 10," he says.
Really? Precisely zero of the histories of the financial crisis, including Taibbi's Griftopia, say anything of the kind, and studies have shown that trading data shows the opposite.

In December 2007, Baker pushed the naked shorting conspiracy hoax in something called Utah CEO Magazine, co-authored with Patrick Byrne, the famously wacky CEO of Overstock.com.

I'd go on, but what's the point? This is probably a plant by the "reliable source," who I assume is very close to Brent Baker (such as the guy who looks at him in the mirror). In short, it is probably fiction. But Obama has made some terrible appointments, so not even obvious tripe like this can be easily discounted.

UPDATE: Not to worry, it was all a big publicity stunt. Baker "said he was withdrawing after the White House failed to nominate him." Good reason.

© 20101Gary Weiss. All rights reserved.

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