Tracking the Deceptions of Overstock.com CEO Patrick Byrne

Overstock.com CEO Patrick Byrne is often viewed as a comical figure -- throwing tantrums, acting like a clown on national television (left), and spinning loony conspiracy theories to excuse his incompetence. But as New York Times columnist Joseph Nocera has eloquently pointed out, it's a mistake to view Byrne as a mere buffoon. He is also a menace, and his company is under investigation by the SEC.

An excellent blog post today by reformed felon Sam Antar points out the extent to which Byrne has put himself in jeopardy, just by opening his big mouth.

I am increasingly convinced that Byrne will be the only CEO in history to get himself in hot water with the Securities and Exchange Commission by posting on message boards.

Sam tracks Byrne's deceptive and contradictory remarks in the Investor Village message board, where he posts under the pseudonym "Hannibal" and only rarely signs his posts. Sam compares Byrne's slippery posts with those of Overstock.com's resident stalker Judd Bagley, who runs Overstock's antisocialmedia.net corporate smear site. He concludes that Byrne and Bagley made deceptive public statements to conceal Byrne's role in creation of the antisocialmedia smear site.

That's problematic for a host of reasons, including the fact that antisocialmeda was run anonymously for some months, until Bagley was outed as its operator by the New York Post. That gives all involved -- including Overstock -- possible exposure under the federal anticyberstalking law, a risk factor nowhere disclosed in the company's SEC filings.

As if to again demonstrate Overstock's contempt for the most elementary corporate ethics, Bagley spun a wild conspiracy theory on the antisocialmedia smear site yesterday, encompassing the Depository Trust and Clearing Corp., myself and a person named Joseph Petrofsky.

As the O-Smear blog points out, such fairy tales seek to mislead investors by accusing Overstock's real and imagined critics of being in league with DTCC, which is at the center of "stock counterfeiting" conspiracy theories.

So how does a potential investor evaluate the true state of Overstock.com? Largely by the representations of management. Is it materially significant if Overstock is being criticized as the result of some covert DTCC operation (implying critics are dishonest) or the criticism is honest?

I think it is "materially significant...and the SEC knows that I think it's materially significant...and they know where to find me.

And me as well.

Ironic, isn't it, the kind of trouble Patrick Byrne is getting himself into, just to placate a small number of "tinfoil hat" conspiracy theorists -- many of whom don't even own the stock?

UPDATE: Not only is Byrne's bloviating exposing himself to legal liability, but it is being used as ammunition by his opponents in his recent absurd junk lawsuit against Wall Street firms.

In legal papers filed recently seeking dismissal of the suit, lawyers for one of the defendants, Merrill Lynch, observed that the suit is part of a "continuing campaign by Overstock and its CEO to blame the poor performance of its stock on anything other than its own inadequacies." The brief prominently sites Overstock's "public relations assault against critics."

Later in the day, Bagley placed a misleading disclaimer on the smear site -- obviously at the behest of Overstock's lawyers -- in a desperate, belated attempt to put some daylight between his corporate smear site and Overstock.

Imagine the derision that would rightly come from Byrne and his supporters, if an employee from Rocker Partners started an anonymous smear site aimed at Byrne. Yet Byrne, in his arrogance, expects people to swallow this pap.

A good analysis of the doubletalk, which contradicts (as usual) previous statements by Byrne, can be found here.

© 2007 Gary Weiss. All rights reserved.

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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.

More Baloney Debunking

The Depository Trust and Clearing Corp. issued a statement today debunking the latest anti-shorting misinformation campaign. This one involves a crummy little penny stock called Global Links, which has been the subject of hysteria on various "stock counterfeiting" websites, and had gotten some media play.

The SEC, showing its usual yelllow streak on this issue, has cowered under its desk while the anti-shorting nuts spread drivel concerning this company. Their thesis is that this stock is the subject of an immense "naked shorting conspiracy." In fact, as the DTCC points out today, the total amount of "fails to deliver" involved $38,000 in stock, which "hardly constitutes the threat to the capital markets" that has been alleged.

The DTCC said:

The available information at this point seems to confirm what Global Links itself stated, this was "a simple error" - likely the result of information about the reverse split not having reached the marketplace- and did not involve naked short selling.

The statement noted that the complex array of stock-restructuring activity carried out by Global Links, which resulted in stocks failing to deliver, "is quite rare and unusual for mainstream securities. However, among sub-penny stocks, these activities may occur more often to try and artificially raise the stock’s price."

The naked shorting nuts will, of course, view this clear rebuttal as yet another link of a long chain of conspiracy, stretching from the boardrooms of the Fed to the Grassy Knoll.

The DTCC statement demonstrates how all this nonsense over "fails to deliver" has submerged real issues for investors. In this case it is a penny stock trying to push up its share price by a reverse split. Reverse splits are the investor issue here, not "fails to deliver" or wild naked shorting conspiracies, no matter how much smoke the naked shorting nuts keep blowing.

It's nice the DTCC has set the record straight. Time for the SEC to show some guts on this issue too.

© 2006 Gary Weiss. All rights reserved.

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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.

A Day in the Life of A Naked Shorting Cultist

If you're Patrick Byrne, the naked-shorting-obsessed CEO of Overstock.com, what's on your mind is not running your money-losing company or satisfying your super-patient shareholders (share prices down 50% since last summer; 2.4% today alone).

No, what's on your mind is.... well, you figure it out. Here's an incoherent press release issued today by Byrne, ranting at the Depository Trust and Clearing Corp.

© 2006 Gary Weiss. All rights reserved.

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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.

The Senate Hearing: A Mixed Bag

As expected, the Senate Judiciary Committee hearing today on hedge funds turned out to be a mixed bag: One part troubling description of a possible coverup at the Securities and Exchange Commission, and one part ritual short-bashing dog-and-pony show.

The troubling part was the testimony of ex-SEC lawyer Gary Aguirre. Obviously the SEC has a lot of explaining to do about its handling of an insider trading investigation involving (maybe) Morgan Stanley CEO John Mack. Those allegations are troubling, and if they're true, heads should roll.

The dog-and-pony show component featured the usual cast of characters that one finds in such things -- the whining CEO, the "outraged" lawyer, and of course, clueless senators.

Utah Republican Orrin Hatch, for example, babbled incoherently about short-sellers "registering" stock on the Berlin exchange. (That was apparently a reference to Berlin exchange listings being manipulated by naked shorters -- something that the NASD investigated and, as was discussed at a state regulatory conference, found to be "hysteria.") My hunch is that a particular Internet-retailing, Sith Lord-ranting Utahan was delighted by the spectacle of his senator making a fool of himself.

As I indicated in a previous item in this blog, congressional hearings that cater to blame-shifting, short-bashing corporate types are nothing new.

Amid all the serious allegations and short-bashing, one little snippet of testimony stood out. It came from Jonathan Boersma, Director, Standards of Practice, at something called the CFA Centre for Financial Market Integrity. The subject was an issue -- a genuine issue, unlike naked shorting -- that Congress and regulators have completely avoided: the growing, troubling field of company-paid research.

Boersma testified forthrightly that "Client-sponsored or even issuer-paid research (whereby a company with little or no research coverage hires a firm to write a report on their company) is certainly not independent."

That is certainly true. Yet, as I pointed out in Wall Street Versus America, such research is routinely touted as "independent" by its purveyors, and foisted on investors as such.

Paid research is an area that Congress might want to investigate, once it satisfies its appetite for "naked shorting" baloney. I'd say it OD'd on that today.

UPDATE: Rounding out a day that positively reeked of baloney, the Depository Trust Clearing Corp. issued a press release concerning a central focus of the anti-shorting nuts -- "fails to deliver." Seems that the widely quoted $6 billion in "fails to deliver" is actually $3 billion, because that figure includes both failure to deliver and to receive. ("Fails to Deliver" are commonly mistranslated by anti-shorting loons as equivalent to "naked shorting," which they ain't, as the DTCC has pointed out a bunch of times.)

Nice of DTCC to clarify. But what I wonder is this: what took 'em so long? To me, this is a prime example of how the Street establishment feeds the conspiracy theorists, who thrive on seemingly conflicting data as they advance their flat-earth theories.

Something as basic as double-counting -- always an issue when quantifying trading -- should have been caught by the DTCC long ago.


© 2006 Gary Weiss. All rights reserved.

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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.

News From the High Plains

In the continuing saga of Overstock, which I am following with facination the way I used to watch The Fugitive when I was a kid, even routine corporate tidings are imbued with significance. Thus the Wall Street Journal picked up what it described as an "intriguing filing" with the SEC by the Richard Kimble of this saga, CEO Patrick Byrne.

The filing said as follows:

"Effective February 17, 2006, High Plains Investments LLC pledged 1,000,314 Shares of the Issuer to a commercial bank in connection with the extension of a line of credit by the bank to High Plains Investments LLC. At the same time, Dr. Byrne pledged 494,886 Shares to the bank in connection with the same line of credit."

According to SEC filings, the Journal noted, "Mr. Byrne is a General Partner at High Plains Investments, so this is a bit of two-fer for him. The filing didn't offer an explanation for the transaction."

Well, let's see. Looks like the guy owns a partnership of some kind and it borrowed some money, using some shares as collateral but..... hey..... wait a minute.

Were those "real" shares or were they "counterfeit" shares? In case you're wondering what I mean by that, everyone on Planet Earth except for Patrick Byrne -- and a handful of other advocates of a nutty Wall Street conspiracy theory -- believe that if a share "failed to deliver" in the clearing process it ain't really a share, and they make a big fuss of asking for their cerificates just to be sure that they ain't been "failed." (Doing so also squeezes any shorts that may be out there, not coincidentally.)

It's all a lot of baloney, of course, and Byrne has been embracing this screwball conspiracy theory to distract attention from the fact that his company's stock is in the toilet.

Still, it is interesting to see the distinction omitted from the filing. That is, he didn't say, "the pledged shares were real shares and had not failed to deliver," or somesuch. Byrne seems to think the whole thing is so important that he's had a rupture with the chairman of the company, his dad, over his participation in this screwy crusade. You'd think it would be important enough to put in the filing.

I assume Byrne made that "counterfeit" vs. "real" determination. After all, if they were "counterfeit" shares.... well, doesn't that mean that the whole deal isn't kosher?

Or could it be that, in his heart of hearts, he realizes the whole thing is a lot of baloney?

Anyway, I'm looking forward to the next episode.

UPDATE: Later on March 6, Byrne gave an interview to C-Net in which he implied that his father, former GEICO CEO John Byrne, was getting a little long of tooth and maybe not totally sensible at times. "You know, when you're 74, you feel differently every day, based on what you have for breakfast that morning," he said of his father.

The elder Byrne's had warranted this smear for giving an interview saying that he may step down as chairman of the company because of his son's embarrassing conduct.

Having insulted his own father, it was no great surprise that Byrne lashed out for the umpteenth time at the financial press and "Wall Street." No, he didn't get a peek at Wall Street Versus America. He's not upset with the media failing to run tough stories on incompetent CEOs, or mad at analysts touting stocks, or peeved at the unfair arbitration system.

No, Byrne's beef is that some members of these two institutions don't like Overstock and don't like Patrick Byrne. How wrong they are. What have they been having for breakfast?

FURTHER UPDATE: He later gave an interview saying that the Depository Trust and Clearing Corp. is run by "criminals." I guess he wants publicity or something. Oops! I lost the link.

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Wall Street Versus America will be 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.

NEWS FROM THE WORLD OF BALONEY: Sorry. Fraudulent investor-protection movements are a guilty pleasure of mine, like chocolate. I just can't resist writing about them! They are funny. Dangerous too, as well as irresponsible, and a little sick. The problem is that these paranoid crackpots influence regulatory policy, and that has to stop.

I'm going to make this item a kind of ongoing diary or "open item," so that all the latest news from the loony anti-naked-shorting movement can be posted in one place. That way this blog isn't totally overwhelmed by baloney. All your baloney in one sandwich.

After all, the anti-shorting scam artists are just one of twenty-one chapters of Wall Street Versus America. They represent just one of the ways the Street has its hand in your pocket -- in this instance by making it easier to rip you off in microcaps -- but there are far more important issues discussed in the book, such as the ghastly arbitration system and fee-happy funds. My general take on this issue is summed up in this post and a few others, most of which have the word "baloney" in the title.

I'll still post major tidings as separate items, but lesser "turns of the screw" I'll post here.

So, on with the Baloney Diaries! These items are in chronological order, with the most recent at the bottom. So you can bookmark the URL for this item (http://garyweiss.blogspot.com/2006/02/news-from-world-of-baloney-sorry.html) and check back periodically:

Feb. 12: The Baloney Brigade's "Sanity Check" website (as in "check your sanity at the door") posted over the weekend what it described as an "encyclopedic analysis" of the Securities and Exchange Commission's legal brief refuting all of the naked shorting lobby's phony "stock counterfeiting" claims.

The author was gravely introduced by Phil Saunders a/k/a "Bob O'Brien," the bravely pseudonymous proprietor of the site, as "Dr. Jim DeCosta." The good doctor describes himself in SEC comment letters as "Dr. Jim DeCosta and Associates, Consultants to Victim Corporations."

"Bob," an ex-peddler of used medical equipment according to the NY Post, didn't disclose exactly what kind of PhD or whatever that this esteemed gent has, so I looked up the phone number. According to Google, this expert in naked short-selling and consultant to victim corporations is James DeCosta, DMD, of the Tualatin Family Dental Clinic in Tualatin, Oregon.

Glad the Baloney Brigade has such a sturdy "consultant" for its "victims"! I'll bet they have good teeth too.

Feb. 13: Last night, Baloney Brigadier "O'Brien" clogged Internet message boards with posts promising an "explosive" revelation. Turned out to be a rumor about somebody serving a subpoena on someone else. I won't repeat the rumor, it being obvious baloney whipped up to divert attention from the beating being endured by stocks he's been touting.

I have a better idea for "O'Brien" to lure suckers to his website: cut rate dental insurance! He seems to be staffed up for it.

Feb. 14: When the "subpoena bombshell" fell flat, "O'Brien" went back to his "sources" and came up with another "scoop" -- that the SEC was investigating Rocker Partners. He didn't disclose his "source," which makes sense because it was The Street.com, which mentioned the probe a few days ago because Rocker owns a chunk of the company (see tail end of this story). To be precise, it said, "the matter is being investigated." SEC investigations are often prompted by long-short battles, with the result usually being either nothing or sanctions on the long side. The Baloney Brigade marches on.

Feb. 15: File this under "I'm not making this up" (with apologies to the blog by that name). The bravely pseudonymous head of the anti-naked shorting coalition, a paranoid crackpot named "Bob O'Brien," wants the world to confirm unsubstantiated reports and rumors that he irresponsibly posted on his website in recent days. I'm not kidding. He issued a "challenge" to that effect today:

If I do not hear from anyone by close of business today, as I haven't heard from anyone for the last 48 hours, I, and everyone else, will assume that the above 4 statements are correct and true, and will henceforth state them as fact.

Well, I guess that makes sense. Post a lot of smears on the Internet before you have gotten your facts straight, and then -- instead of getting the thing nailed down tight and asking for comment from the affected parties -- issue a "challenge" for your victims to contradict you. And these people influence regulatory policy and have gotten the attention of state regulators? NASAA, come to your senses, for Pete's sake.

Feb. 15 (later). The "Sanity Check" blog published a rambling, patently phony story about a threat supposedly conveyed to a "journalist" who was "investigating" naked shorting by "three men in Armani suits, slicked back hair, Ferragamo shoes." You know, sort of like a bad detective novel. This totally unbelievable cock-and-bull story is supposed to excuse the anonymity of "O'Brien," the leader of this crackpot movement, who hides behind a phony name while spewing paranoid conspiracy theories and smears. The "journalist" is anonymous, natch.

OK, I'll pretend for a moment that this story is not the phony that it obviously is. What is a journalist's duty in such a situation? It takes all of thirty seconds to come up with the answer -- to call the police or the FBI! Report the threat. Hell, I would. In fact, when it's happened to me, I have. So would any real, as opposed to imaginary, journalist.

What's sad is that some good people will believe this trash, no matter what, because they need someone or something to blame for their bad investment decisions.

Feb. 16. Rejoicing across the world of baloney today, as the subpoena rumor mentioned earlier -- Depository Trust & Clearing Corp. being asked for trading records by regulators in Connecticut and Utah -- is confirmed by the New York Post. What this means is that not one but two state regulators are devoting valuable resources to investigating a nonexistent scandal. It's a sad day for investors, who are ripped off by real scamsters while the regulators chase after imaginary ones.

A good example of the real thing was discussed in the Mark Cuban blog yesterday, in an item entitled "Naked Shorting -- the Real Bad Guys." Note the reference to C. Austin "Bud" Burrell, whose little "pink sheet" company is reportedly being pushed to overseas investors by a boiler room. Unfortunately, victims of real stock swindles have yet to organize. Victims of imaginary naked-shorting conspiracies, on the other hand, are not only organized but have clout, and the waste of resources reported today proves it.

Feb. 17. The rejoicing was premature. The Depository Trust and Clearing Corp. says today that the Connecticut subpoena was served several months ago, "related to an investigation the Conn. Banking Dept. is conducting of third parties." (Whatever that means.) Still, assuming "naked shorting" is the reason for this probing, the bottom line is that two state regulators are wasting their time with the Wall Street version of the flat-earth movement.

The taxpayers of these states have ample reason to be annoyed, and to ask why their investor watchdogs are chasing after baloney when there are real investor scams to stamp out.

Feb. 19: Investors in one naked shorting "victim," a cruddy mining company, aren't lapping up the "stock counterfeiting" con game. I think this entry is significant enough it deserves an item of its own, so I moved it here.

MISSING WORD: The Securities and Exchange Commission has weighed in with an amicus brief that further demolishes the insane arguments raised by the naked shorting conspiracy nuts. You can download a copy here.

The brief was filed in one of the several ridiculous suits that have been brought against the Depository Trust and Clearing Corp., which processes trades and is considered the Darth Vader of naked shorting by the flat-earth theorists. This suit was lodged by an innocent little company whose sole problem is not bad sales or bad earnings but naked short-sellers!

The poor dears generously shared the SEC brief with the anti-shorting website called "Sanity Check" (as in "check your sanity before entering.") The brief "raises a host of troubling questions," says the bravely pseudonymous "Bob O'Brien," who runs the site and hides behind a phony name in the best boiler-room tradition.

Yes, troubling questions. One of them is, "Does anyone actually believe these con men?"

Anyway, the Baloney Brigade is upset about the brief, with one "Sanity Check" "blogger" saying the SEC violated some "ethical" rule by daring to side with the DTCC.

Oh, the missing word in the brief: baloney. Why do legal briefs have to beat around the bush? Can't they just simply say, "This is baloney"? Is that against a legal rule or something?

P.S. Yes, as a commenter pointed out, writing about the naked shorting conspiracy nuts is indeed like writing about astrology or palmisty. However, astrologers and palm-readers don't influence regulatory policy, as the naked-shorting lobby has done.

THE BALONEY CHRONICLES: A staid Wall Street institution called the Depository Trust Clearing Corp., which processes trades for securities firms, is one of the leading targets of the anti-naked-shorting fanatics. There's no valid reason to drag these people into court, but that has not kept the anti-shorters from targeting the DTCC time and time again.

The firm today issued a box score: "To date, 14 suits have been brought against DTCC or its subsidiaries involving naked short selling. Of these 14 cases, 9 were either dismissed by the courts or withdrawn by the plaintiffs. In 4 cases, suits were filed, but DTCC and its subsidiaries were never served."

"We are concerned about the continuing effort by third party groups to mischaracterize and misrepresent the facts surrounding these lawsuits and the degree of concern over this issue," said Larry Thompson, DTCC general counsel and managing director. "From what regulators have said, there is little empirical evidence that widespread abuses such as naked short selling are occurring."

Unfortunately, such rational statements fall on the deaf ears of the Baloney Brigade, which continues to press forward a nutty crusade against a nonexistent problem, diverting resources that should be used to address genuine investor issues, such as the unfair arbitration system. That is the focus of the Introduction to my forthcoming book Wall Street Versus America, which was recently posted on my website.

Genuine investor issues don't matter one bit to the cynical con men of the Baloney Brigade. This coalition of stock promoters and crackpots is concerned about one thing only -- artificially elevating the price of cruddy stocks.

THE BALONEY CONTINUES: Phil Saunders a/k/a "Bob O'Brien," the bravely anonymous leader of the Baloney Brigade, responded to today's DTCC press release with a lengthy, rambling comment that doesn't even attempt to counter anything in the DTCC press release.

As usual, the ex-used medical equipment salesman's position is that he doesn't have to prove a thing. The rest of the world, the victims of his rants, must come up with "facts" to counter his nutty allegations. He then expresses displeasure that I have not turned over my blog to him to rant at length and goes on to accuses DTCC -- as usual, without substantiation -- of "lying," and slanders an award-winning Dow Jones reporter who has not written articles to his or her (being anonymous, we have no way of knowing) satisfaction.

"Bob," I have a question for you. This you are welcome to post on, and at length. What is your name? Who finances your website? Who finances the Baloney Blitzkrieg?

UPDATE: "Bob" responded in typical fashion, by saying "I'll be happy to respond" and then, after six hundred words, not responding.

BALONEY DEBUNKED: Today the Depository Trust and Clearing Corporation, the staid Wall Street trade-processing collective that is the bogeyman for many an anti-shorting fantasy, issued a press release summing up a forum that was held recently by the North American Securities Administrators Association on the "naked shorting" red herring.

This release is important so I'm excerpting from it at length, which hopefully the DTCC won't mind. Basically the Baloney Blitzkrieg has been discredited yet again -- not that it matters even a bit, as I will be explaining.... :

"NEW YORK--(BUSINESS WIRE)--Jan. 24, 2006--Despite extensive examinations by the SEC and the markets, there has been little or no evidence of extensive "naked short selling" to date, according to comments made at a recent forum held by the North American Securities Administrators Association (NASAA).

"The forum was designed to examine how well Reg SHO, a regulation designed to modernize rules on short selling, had performed.

"James Brigagliano, assistant director of market regulation at the SEC, said, "While there may be instances of abusive short selling, 99% of all trades in dollar value settle on time without incident."

"Brigagliano said the SEC conducted examination at 45 broker/dealers and asked the markets to look into the trading of securities in which large amounts of "fails to deliver" have been registered.

"Anand Ramtahl, vice president in the New York Stock Exchange's division of member regulation, told panelists that the exchange was conducting rigorous examinations of its members to make sure they are complying with Reg SHO.

"NYSE officials noted later that when Reg SHO went into effect in January 2005, the exchange had 78 issues on the threshold list. (The threshold list contains the names of issues that have more then one-half of one percent of their shares failing to be delivered.) As of early January 2006, the number of NYSE issue on the list had dropped to 37 issues.

"Cameron Funkhouser, NASD's senior vice president of market regulations, told the forum that NASD had found no evidence of rampant naked short selling. He also noted that although a number of companies have in the past alleged their shares have been manipulated through the listing of their stocks on foreign stock exchanges, he had found no evidence of such activity.

" 'We took (these allegations) very seriously,' Funkhouser said. 'We have seen not one instance of naked short selling or any abusive short activity" through foreign exchanges.'

"According to the SEC, a short sale is "generally the sale of a stock you do not own (or that you will borrow for delivery). Short sellers believe the price of the stock will fall, or are seeking to hedge against potential price volatility in securities that they own. In a 'naked' short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard three-day settlement period. As a result, the seller fails to deliver securities to the buyer when delivery is due, which is known as a 'failure to deliver' or 'fail.'" The SEC noted that fails can occur for a number of reasons other than naked short sales, however.

"The Depository Trust & Clearing Corporation was not invited to attend the NASAA forum, but officials noted that 85% of all fails were resolved within 10 business days (i.e., before any buy-in would be allowed under current rules), and 90% resolved in 20 business days. DTCC does not regulate short selling, naked or otherwise. However, it compiles lists of fails each day and provides that data to the market regulators.
"
Additional information on naked short selling can be found on DTCC's Web site at http://www.dtcc.com/ThoughtLeadership/keyissues/naked_short_"

Something stands out in that press release -- DTCC's exclusion. The DTCC is a staid and totally blameless organization that has had its name dragged through the mud by the brainless boobs of the Baloney Brigade, and knows more about short-selling mechanics than just about any other person or institution. Why was it excluded?

As I pointed out in an exchange (see the ninth and tenth comments) with one of the leading lights of the anti-shorting movement -- a brave soul who cowers behind the pseudonym of "Bob O'Brien" while making scurrilous attacks and nutty allegations -- this is all a crying shame. Regulators are supposed to be responding to genuine investor concerns, and they do a mediocre enough job of that without having their attention diverted by non-issues. I've always admired NASAA, which has been in the forefront of protecting investor concerns, but I think they've taken this naked-shorting nonsense far too seriously.

I see that the Baloney Blitzkrieg is hard at work trying to spin this DTCC press release, using the usual combination of smoke, mirrors and baloney. The shame is that no matter how many times the sheer idiocy of their allegations is exposed, they just plow on ahead.

Why is that? Because, by definition, satisfying the Baloney Brigade is impossible. These are people -- very few, but very loud people -- who are united by a desire to find someone other than themselves to blame for either their own lousy investments or their own lousy companies. They see the shares that interest them decline. So rather than approach the subject rationally, they try to blame a scapegoat. So they find an old one: short sellers.

Even if you believe that naked shorting is the scourge that these people say it is, there is not a shred of evidence that it comes even close to the kind of problem that they claim it to be. That's a fact, and all the shrill and nutty rants in the world won't change that.

By the way, a couple of these individuals have taken me to task for "insulting" them. Not so. You can only insult a real person. Very few of these people utilize their real names in their various Internet missives. You can only insult a real person, not a fictional one and certainly not a fictional one with a fictional cause.