That’s right. I have another question for Patrick. Now I’m sure the answer (if any) will come in the form of slicing and dicing, splitting hairs, fancy footwork, and a few other catch phrases. It’s apparent that Patrick can’t just give a straightforward answer to any question, so I certainly don’t expect this to be any different. Here I go anyway…

Tonight on the Investor Village message board for Overstock.com, the following was posted:

Recent 10Q disclosure explained

Some thoughts.

First let’s lay down some simple facts. The SEC requires disclosure when a CEO is arrested. If the CEO celebrates being arrested the arrest still requires disclosure. If the CEO begs the cops to arrest him again and they do so a week later the second request also requires disclosure. If the CEO is arrested weekly each of the arrests, whether celebrated or not, requires disclosure. The SEC would probably accept a monthly disclosure of all arrests for a CEO who is arrested weekly but does not accept a blanket disclosure for arrests in the future.

For example, if Bob Smith is the CEO of Big Bust Enterprises and is arrested on a weekly basis for a variety of crimes such as felony assault, embezzlement and cooking the books it is not sufficient for Bob to announce the celebration of those arrests and not to disclose his arrest a week later for paying a hit man to knock off his critics.

With that out of the way let’s see if the recent 10Q disclosure can be explained. When the 2nd subpoena was personally received the CEO, being the important person he was, felt no obligation to share the existence of the 2nd subpoena with his Board of Directors. Clearly the purpose of the SEC asking about his retirement plan in the subpoena was related to miscreants attempting to bring down Overstock.com and render any retirement plans worthless and had nothing to do with an investigation of Overstock.com or the CEO.

Besides, the CEO had already disclosed one subpoena a week earlier and after realizing that he had already offended Emily Post, a refined woman who cringes at the mere thought of celebrating an SEC investigation, decided the proper way to make up for the uncouth celebration of the first subpoena would be to not even mention the second.

All was good in the world as the SEC careful examined the evidence provided, until the SEC pronounced that one of the CEO’s targets was without fault, Gradient/Camelback Research. This infuriated the CEO and he made mention of the 2nd subpoena to one to many persons. The word leaked to the Board of Directors via a variety of sources, including Sam Antar. The CEO was called on the carpet but he basically told the board to go F themselves, he wasn’t disclosing a 2nd time. One member of the board of directors then resigned.

The SEC then pushed the issue and the board was forced to act, under legal advice, to disclose the 2nd subpoena in the latest 10Q. Patrick as royally pissed off and remains pissed off to this day.

He refuses to admit anything improper was done and it is now a firing offense at Overstock.com to mention the 2nd subpoena.

My questions for Patrick Byrne:

• Did you conceal (or forget or fail to mention) the second subpoena from the Board of Directors for a period of time?
• Did a member of the Overstock.com Board of Directors resign around the time that the Board of Directors became aware of the second subpoena?

I eagerly await answers to these questions.