Wednesday, November 04, 2009

Patrick Byrne Can Run From Tough Questions, But He Can't Hide

To no great surprise, CEO Patrick Byrne turned off the microphone at his quarterly conference call yesterday, refusing to allow questions from white collar crime-fighter Sam Antar--and even breaking his promise to respond to questions that Sam had previously emailed.

As Sam points out in his blog, Byrne's numbers are useless. They can't be accurately compared with prior quarters.

You really have to wonder: Where is the SEC?

The agency now had two investigations pending against Overstock: one probing previous earnings restatements, which clearly pertain to Byrne's creation of a "cookie jar reserve" to manipulate his financial statements, and another, disclosed yesterday, regarding its 2008 Form 10 K/A and second quarter 2009 10Q.

But as the Madoff investigation proved, a determined miscreant can easily shrug off an SEC probe by simply lying. A previous investigation ended without action. Will the SEC drop the ball again this time?

© 2009 Gary Weiss. All rights reserved.

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