On Barry Minkow, Patrick Byrne and Sue-ers

My latest Street.com column deals with Barry Minkow capsizing, the latest blogger lawsuit, and the latest retchings from the serial retcher, Patrick Byrne of Overstock.com.

You can read it here.

The blogger lawsuit involves something called Deer Consumer Products and a blogger named Arthur Little, both of whom are unfamiliar to me.

In the column I point out how nice it is when crooked CEOs go straight, since so few do. What I wonder is whether Byrne will ever go straight, and if so, what will he be: a Barry Minkow who remained a crook, or a Sam Antar who has genuinely turned over a new leaf.

I have a hunch, but I'll keep it to myself.

© 2011 Gary Weiss. All rights reserved.

Medifast, Meet Barbra Streisand

Ms. Streisand, I'd like you to meet another dumb lawsuit plaintiff

In an item the other day I described how a lawyer for Shaquille O'Neal, suitably named "Roach," had sent a threatening "cease and desist" letter to blogger Tim Sykes, demanding that Tim remove all refrences to a company tied in to O'Neal called NXT Nutritionals Holdings Inc.

Doing so was dumb as hell, because all the Roach did was to amplify Tim's claim that NXT is a "pump and dump"--something known as the "Streisand Effect," after an equally dumb lawsuit the singer once filed. All the suit filed by Streisand accomplished was to disseminate a photograph she was trying to suppress.

Roach was pretty dumb, but I've found someone even dumber--a company called Medifast Inc. Repeat: Medifast Inc. (just want to be sure you noticed) that is suing Barry Minkow, his Fraud Discovery Institute, forensic accounting ace Tracy Coenen and a bunch of other people, including an anonymous person on a Yahoo! message board, for saying naughty things about the poor wittle dahling mutlilevel marketer.

Here is Tracy's post on the suit, and here is a post from Sam Antar asking Medifast why it hasn't responded to the allegations that have arisen concerning the firm.

As with NXT, I have no opinion on Medifast except that a suit like this is just plain stupid. All it is going to accomplish is to disseminate Minkow's claims to people like myself who don't follow such things and ordinarily couldn't care less.

Sam points out:

The lawsuit alleges that Barry Minkow orchestrated an illegal scheme to drive down the stock price of Medifast shares to profit from short selling. However, Minkow has a first amendment right to critique or to use your words "bash" Medifast, notwithstanding the fact that he publicly disclosed that he holds a short position in your company and is a convicted felon. Minkow's opinion and analysis is backed up by very detailed reports prepared for Fraud Discovery Institute by Mr. FitzPatrick and other data made fully available to the public for examination and scrutiny.

The Defendants will certainly assert "truth" as a defense to claims of defamation made against them in this lawsuit. That same kind of truth led a federal Judge in Utah to dismiss Usana's (NASDAQ: USNA) frivolous defamation claims against Fraud Discovery and Barry Minkow and award them legal fees covering their Court costs.

I remind you that discovery in civil litigation is a two-way street. Minkow and the other Defendants can now subpoena all of Medifast's books, records, and documents and closely scrutinize them to look for any possible improprieties and irregularities in defending themselves in this litigation. In addition, they can subpoena documents from Medifast's auditors, vendors, customers, and other business relationships. You and others will be subject to sharp questioning under oath in pre-trial depositions by the Defendant's attorneys. Now Medifast's business documents will ultimately become subject to close public examination and careful scrutiny if this case goes to trial.

Medifast, meet Barbra Streisand.

© 2010 Gary Weiss. All rights reserved.

Usana Gets SLAPPed Down

Usana Health Sciences is a -- forgive the redundancy -- sleazy Utah company in the nutritional supplement business. As sleazy Utah companies are wont to do, it reacted to criticism by suing the criticizer, Barry Minkow of the Fraud Discovery Institute.

Minkow had prepared an extensive report describing the company's frailities. Well, that certainly would not do. Usana sued, and that great defender of corporate sleaze, Judd Bagley of corporate sleaze palace Overstock.com, chimed in with a typically nauseating mud-sling attack.

So I am delighted to report that today Usana was ordered to pay $142,510 in attorney fees to Minkow under the SLAPP statutes, which punish suers who use the legal system to silence critics.

Congratulations, Barry, and keep up the good work.

© 2008 Gary Weiss. All rights reserved.

Usana Junk Lawsuit SLAPPed Down

Seems that we have a rare victory against corporations seeking to silence their critics. Tracy Coenen describes how most of a suit in Utah against ex-con fraudbuster Barry Minkow by Usana Health Sciences has been thrown out of court. All but one of Usana's claims was tossed out.

What makes this interesting is that the court cited the anti-SLAPP statutes, which are rarely enforced laws prohibiting suits just like this.

The SLAPP statutes allow the defendants to claim legal fees. It's not clear if that is going to be applicable here, but I certainly hope so.

© 2008 Gary Weiss. All rights reserved.

Death Threat Du Jour

Writing about slimy companies always puts one in the line of fire from a sizable wacko community -- deluded microcap investors who think even the crappiest companies should always go up and up and up.

Barry Minkow is learning just how criminally inclined some of these people are.

Minkow, who masterminded the ZZZZ Best fraud scheme and now exposes stock fraud, recently got a death threat as thanks for his great work exposing a crummy little Utah company (forgive the oxymoron) called Usana Health Sciences.

It appeared on the Usana message board of Yahoo, and I'll not post a link because I presume that Yahoo -- unlike its counterparts at the Investor Village message boards -- will promptly delete that threat.

Here is a redacted screen shot:



Note the publication of purported Social Security numbers -- obtainable online, but at some cost.

Obviously Barry is on to something. He's drawing blood, and that always brings out the bloodsuckers.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

The Latest Naked Shorting Poster Child

Just about every day a new corporate misfit joins the ranks of the Naked Shorting Poster Children (tm) -- the OTC horror shows, red-ink geysers, mismanaged chamber pots and other fly specks seeking excuses for dreadful share prices. Today's new entrant is a fine example of the genre.

It's none other than Usana Health Sciences, a nutritional supplements manufacturer whose exploits have been chronicled by Barry Minkow of the Fraud Discovery Institute.

Forensic accounting expert Tracy Coenen reports in her FraudFiles blog that Usana unfurled the banner of the Baloney Brigade anti-shorting nutcases in a junk lawsuit that it filed against Minkow.

Welcome aboard, Usana Health Sciences! You're in good company. Why only today, Universal Express -- the SEC-persecuted standard-bearer of the cause -- issued a really fantastic press release charging the SEC with "permitting the destruction by naked shorters of 5,000 to 7,500 small public companies over the last 10 years."

Hey, don't make fun of corporate blame-shifters like Usana and Universal Express. They've got the ear of SEC Chairman Christopher Cox, and he is proving constantly that he is just the man that the Baloney Brigade and their allies in the U.S. Chamber of Commerce want in the job.

This week he began an effort to turn back the clock on shareholders having a voice on corporate governance. (Read the Floyd Norris blog item on that.) So expect more blame-shifting CEOs, less SEC action against crooked companies, and more SEC pandering to the Baloney Brigade and its allies in big business.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.