China MediaExpress: Massive Fraud or Victim of Short Sellers?

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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. Continue reading

Wondering Why Frauds at Public Companies Aren’t Being Pursued by the Feds?

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Consumers are often left wondering why the Securities and Exchange Commission doesn’t heavily pursue allegations of fraud against public companies like Overstock.com (NASDAQ:OSTK), Usana Health Sciences (NASDAQ:USNA), Herbalife (NYSE:HLF), and the like. I’ve always said the answer is simple: There are not enough resources devoted to investigating and prosecuting fraud in public companies. Executives are free to use phony accounting measures and other false information to hype the company with little fear of action by the SEC. Continue reading

Overstock.com and Naked Short Selling

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Pat Byrne, CEO of Overstock.com O.co

An article on the Industry Standard by managing editor Ian Lamont, “Overstock.com CEO: I’m not vindictive.”, explores a recent blog post made by Patrick Byrne on his site that attempts to expose corruption on Wall Street. Byrne is the completely inept CEO of Overstock.com (NASDAQ:OSTK), the man who has run it into the ground and racked up almost a quarter billion dollars in losses since 2000.

Byrne has been ranting for a while that naked short selling of stocks (an illegal act, by which a stock is sold short before actually securing/borrowing shares to short) is rampant on Wall Street and that something must be done about it. He claims that naked short selling is responsible for his company’s stock price experiencing a serious downward trend since 2005. Continue reading

Details on the Overstock.com Cyberstalking and Spyware Campaign

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Judd Bagley, cyberstalker at Overstock.comA couple of weeks ago, I commented on a post that Judd Bagley, chief Overstock.com (NASDAQ:OSTK) stalker and “Deep Capture reporter” made on the InvestorVillage message board for Overstock. He stated there: “…my first master stroke was getting a tracking cookie placed on the laptop computer of Dan Schoenherr…”

I thought it might be important to revisit the cyberstalking and spyware tactics used by Judd, with a little help from Scipio Africanus, a blogger who did much to expose dirty tactics used by supporters of Overstock.com. Continue reading

Overstock Continues to Mislead Investors With Phony EBITDA Calculation

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Patrick Byrne Naked Short SellingIn the past, I’ve discussed the improper EBITDA numbers reported by Overstock.com (NASDAQ:OSTK). It comes as no surprise that the con game continues with Overstock’s latest reported numbers.

The SEC rules are very simple. “EBITDA” refers to a specific calculation, which is “earnings before interest, taxes, depreciation, and amortization.” Overstock.com and CEO Patrick Byrne have taken liberties with this number, in violation of guidance provided by the SEC on the issue. Continue reading

The SEC Investigation of Overstock Was Because Patrick Byrne is Trying to Expose Corruption on Wall Street?

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That appears to be what Patrick Byrne is suggesting in this interview. The story keeps changing. At one point, Patrick said he and Overstock.com (NASDAQ:OSTK) weren’t really the target of the SEC investigation. Rather, the investigation was focused on others (hence the “celebration” of subpoenas). When the SEC issued a no-action letter, suddenly the investigation really was about Overstock and Patrick, and they were vindicated (according to their supporters).

Byrne blathers and I paraphrase…. Continue reading

Short Selling, Miscreants Ball, and Conspiracies… OH MY!

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On August 12, 2005, Patrick Byrne, CEO of Overstock.com (NASDAQ: OSTK) had a conference call he said was going to give information about the “August 11 lawsuit.”

The transcript is 17 glorious pages of Byrne rambling about his conspiracy theories. No questions. Just Byrne and conspiracy theories. I read it on Thursday. And I didn’t really know what to do with it. Do I try to summarize all the nonsense? Then what?

Fortunately, a poster on a stock message board has saved me the trouble. Here’s what he calls the Reader’s Digest version of the transcript. If you’re normal, you will get less than 1/4 through it and swear that this person is lying. The transcript of this public conference call sponsored by Overstock.com couldn’t possibly have happened this way. Oh yes, it could. Read the transcript for yourself! Continue reading

Patrick Byrne & Co. Up to Dirty Message Board Tricks Again

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I occasionally take a peek at stock message boards like the Investor Village Overstock.com board when I need a bit of entertainment. It’s especially interesting when the poster “Hannibal” makes statements about the financials and operations of Overstock.com and makes no disclosure that he is, in fact, Patrick Byrne the CEO of Overstock (NASDAQ:OSTK).

Patrick and his little friends have a history of using dirty tricks to try to gather information on the people who dare to say anything negative about Overstock. Paid cyberstalker Judd Bagley is known for secretly embedding code into messages he posts on message boards, with the intent of harvesting information about the IP addresses of those who read and respond to his messages. Continue reading

A Little “Deep Capture” Cover-Up in the Works?

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Gary Weiss has a most excellent post on his blog about an apparent cover-up in progress by Patrick Byrne, CEO of Overstock.com (NASDAQ:OSTK).

Here’s the deal: For a couple of years now, Patrick has been ranting and raving about conspiracies and Sith Lords and secret fax machines and other oddities related to Naked Short Selling. (Just type “sith lord” into the search box to the right to get a flavor of what I mean.) He is going to be the savior of the investing world, and DeepCapture.com is his “journalistic” endeavor related to this. Continue reading

Preserving Some Overstock.com History Again

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Patrick Byrne, Sith LordFrom time-to-time, I like to cut and paste from the ever-entertaining stock message boards about Overstock.com (NASDAQ:OSTK). I admit to being a casual observer. I don’t post on those message boards, but do read on occasion. And this exchange was too good to ignore. Plus I like to have the opportunity to read some of my favorite postings again without having to search the boards… they’re right here at my fingertips.

This message was posted last night on Investor Village. CEO Patrick Byrne likes to post on message boards as “Hannibal,” discussing Overstock issues while not disclosing his true identity. While regular readers of these boards likely know it’s Patrick, many others probably don’t. Do you think Patrick ought to provide full disclosure with each of his messages? I do.

Here’s what “Hannibal” had to say: Continue reading