14 Nov

Why Roddy Boyd’s Ethics Failure Matters

The long-running Overstock.com fraud story probably isn’t of interest to most of my readers. But when you’ve got a company that manipulates its financials to turn losses into profits and the executives profit handsomely from manipulating the stock and the company’s lunatic CEO harasses and stalks critics, you can see why a fraud investigator might want to tune in.

The Cohodes/Overstock Donation Debacle

Earlier this week I wrote about Roddy Boyd and his Southern Investigative Reporting Foundation (SIRF), and the shenanigans surrounding his receipt of $329k of Overstock.com stock from Marc Cohodes. Marc is a short seller who lost a lawsuit brought by Overstock against his company Rocker Partners for its very public criticism of the company and its CEO, Patrick Byrne.

In 2017, Marc mysteriously made up with Byrne and became a very vocal pumper of Overstock’s stock after taking a substantial long position.

In December 2017, Cohodes offered Roddy 5,000 shares of Overstock.com stock, and Roddy took it and sold it for $329,000.  Marc was buying Roddy’s silence on Overstock, and both of them knew it, whether or not it was explicitly stated between them.

Roddy confirmed that in June 2018: Read More

12 Nov

How NOT to Do Investigative Journalism

A decade ago, I was really into blogging about companies that were perpetrating frauds on consumers and investors. Nobody paid much attention to me, but I enjoyed digging into company financials and exposing the actions of dishonest executives. It fit nicely with my fraud investigation work.

One of the companies that interested me was Overstock.com. The company was prone to cooking the books, and they were headed up by an unbalanced CEO named Patrick Byrne who was fond of conspiracy theories.

There’s only so much you can write about a company repeatedly manipulating its financials and the SEC inquiries that follow. I stopped writing about them in early 2010, until things got interesting again in 2017.

Marc Cohodes, a fairly well-known short seller who had criticized the company massively (and ended up on the losing end of a big lawsuit by Byrne), suddenly switched sides.  Cohodes went long Overstock on May 2017, hyped the company at a Grant’s Interest Rate Observer conference in October 2017, said Byrne was now his friend, and had all the negative information about him wiped from Byrne’s Deep Capture website. Sam Antar did an excellent write-up about how Byrne and Cohodes got so chummy. In fact, they were so chummy that Cohodes was trying to get others (such as Antar) to stop writing negative things about Overstock and Byrne. Read More

30 Nov

Short Seller Marc Cohodes About Face on Overstock

BFFs Marc Cohodes and Patrick Byrne

Former hedge fund manager Marc Cohodes has been a long-time critic of Overstock.com and its wacky CEO, Patrick Byrne. The criticism dates back to the days when Cohodes was at Rocker Partners, a company that was sued by Overstock along with research firm Gradient Analytics. In 2005, Cohodes was fingered by Byrne as being part of a “miscreants ball” under the direction of a “Sith Lord.” Yet after more than a decade with a negative opinion of the company and its management, Cohodes recently did an about face.

Is money fueling the change of heart?

Sam Antar, another long-time critic of Overstock, details the Cohodes/Overstock situation nicely on his blog. The crux of the issue is that Cohodes (who has been focused on short selling) took a long position in Overstock in May 2017. A month later, Cohodes met personally with Byrne. In October, Cohodes hyped the company during a presentation at a Grant’s Interest Rate Observer conference, and said that Byrne is now his friend. Read More

06 Nov

Overstock.com Report on TheStreetSweeper

TheStreetSweeper, a site investigates and reports on public companies, released a report last week on Overstock.com. The article, called “Under Surveillance,” said that the company’s stock is massively overvalued. The stock price shot up when Overstock jumped on the cryptocurrency bandwagon:

Overstock’s crypto-fueled stock surge began in August, after the online retailer began allowing shoppers to pay with bitcoin and other digital tokens.

In September, the company announced plans for an exchange to trade tokens.

In October, the CEO announced a subsidiary, tZero, intends to hold an ICO – initial coin offering – from Nov. 15 until Dec. 31. Rather than shares of stock, digital tokens would be issued in the private placement.

Read More

09 Feb

China MediaExpress: Massive Fraud or Victim of Short Sellers?

UPDATE: In March 2011, CFO Jacky Lam of China Media Express and the auditors (Deloitte) resigned. Deloitte said they could no longer rely on the representations of management, and they suggested an investigation was in order. Ping Luo, the analyst from Global Hunter who gave CCME rave reviews resigned. Maurice Greenberg’s Starr Investments sued CCME for fraudulently inducing it to invest $13.5 million. The stock was delisted from the NASDAQ in May 2011.

Deloitte raised the following issues: questionable authenticity of bank statements, supicioius bank confirmation procedures, existence of advertisers/customers, undisclosed bank accounts and bank loans, financial filings with the State Administration of Industry and Commerce differing from information provided to auditors, questionable authenticity of tax filing documents, cash payments to employees, and double counting of buses.

As I have found out all too well in the last two years, those who are critical of public companies risk retaliation. Retailing failure Overstock.com (NASDAQ:OSTK) has spent years perfecting their methods of stalking and intimidating anyone who dares to criticize their perpetual losses, their wackadoo CEO Patrick Byrne, the gross incompetence of management, and (most importantly) their fraudulent financial reporting.

I have a particular interest in multi-level marketing (MLM), and in publicly voicing my dislike of this bogus “business model,” have been subjected to retaliation from the companies themselves as well as individuals associated with the companies. The most vicious attack is by Medifast and its MLM division, Take Shape For Life (TSFL). I first became aware of Medifast via a small project for a client, but became interested in the company and how it was achieving extraordinarily good financial results. Read More

03 Jan

Overstock.com and Patrick Byrne Caught in Another Lie

liarliarOverstock.com (NASDA:OSTK) is truly the gift that keeps on giving if you are a fraud investigator. The company and its wacky and incompetent CEO Patrick Byrne have been caught in yet another lie.

The antics of Overstock, Byrne, and paid stalkers Judd Bagley and Mark Mitchell have been documented over and over. I’ve really only touched the surface of this issue. Journalist Gary Weiss and reformed criminal Sam Antar have documented all the gory details. Read More

12 Dec

Overstock.com Stalks Critics, Hacks into Facebook Accounts, and Disproves Own Conspiracy Theory

Judd Bagley Larry BergmanThe story about the Oversock.com theory that anyone who is “friends” on Facebook is part of a naked short selling conspiracy keeps getting weirder. It was bad enough that former Overstock.com employee and paid stalker (paid by OSTK CEO Patrick Byrne, nonetheless) Judd Bagley has created a database of Facebook users and their friend lists.

Bagley has gone further than anyone realized, but we should have expected this. This isn’t Bagley’s first crack at cyberstalking. He’s got a colorful history of doing so. And Patrick Byrne and Overstock are becoming rather famous for issuer retaliation… going after critics of public companies in order to hopefully scare them into silence. These activities go back to at least 2006.

Journalist Gary Weiss writes: Read More

11 Dec

Facebook “Friends” Are Co-Conspirators In Overstock.com Land

Conspiracy-TheoriesIn the world of Patrick Byrne, CEO of flailing Overstock.com (NYSE:OSTK), his paid stalkers, and his nutty followers, anything and everything is evidence of a massive conspiracy on Wall Street. Involved in this massive conspiracy are “captured” journalists who “take orders” from hedge funds and help manipulate the stockmarket.

Remember the days when Byrne was claiming that his company’s poor stock price was a direct result of naked short selling of the company stock? And when that allegation couldn’t be proven and consistent poor financial results (even poor after the accounting department did a little magic on them each quarter) seemed to be the real reason the company’s stock hasn’t done well…. then the real story became the massive conspiracy on Wall Street. Read More

24 Nov

Grant Thornton to SEC: Overstock.com Is Lying

Patrick Byrne of Overstock.comUPDATE: Overstock.com just issued a press release in which Patrick Byrne calls Grant Thornton a bunch of liars. Add them to his list of “miscreants.”

No longer can Patrick Byrne, wacky CEO of Overstock.com (NASDAQ:OSTK) claim that those pointing out his lies and materially misleading financial statements are just “miscreants,” operatives of an imaginary “Sith Lord,” or [insert any of a number of Jewish slurs that Byrne is prone to use].  Now national auditing firm Grant Thornton is calling Patrick Byrne and his clowns liars. He’s collecting quite a slew of admirers.

Yesterday, Overstock filed an 8-K with the Securities and Exchange Commission regarding their firing of Grant Thornton. Here’s what Overstock.com has to say about the accounting issue that led to the firing, and I have placed in bold the most important part: Read More

17 Nov

Overstock.com: The Circus Continues

Sam Antar has often referred to Overstock.com and CEO Patrick Byrne as the gifts that keep on giving. And he sure is right! There is never a dull moment when it comes to wacky conspiracy theories and accounting woes that never end.

Last week, Overstock (NASDAQ:OSTK) announced that it wouldn’t be filing its 10-Q for the third quarter on time. The reason? Patrick Byrne had created another clever (but completely wrong) accounting treatment for another accounting error recently discovered, and the auditors wouldn’t sign off on it. Read More