Patrick Byrne, CEO of Overstock.com, has been asked numerous times why he waited nearly a year to disclose a subpoena he received from the SEC. Overstock received a subpoena on May 9, 2006, and Byrne issued a press release about it the same day. Byrne then received a subpoena personally on May 17, 2006, but waited to disclose it until this month, nearly one year later.
I discussed this issue yesterday, and I predicted:
He.s claiming that his subpoena wasn.t related to the Overstock.com SEC investigation. That will be his reason/excuse for not disclosing it in Overstock.s Prospectus and SEC filings.
Patrick Byrne may also claim that since the subpoena was to him personally, and the Prospectus and 10-K both apply to the company, then there.s no violation or lie.
Patrick has been a busy boy on the Investor Village message board for Overstock this weekend. And here is part of one of his postings, under the alias Hannibal:
A year ago I put out a press release that began with these words: .Overstock.com Chairman and CEO Patrick Byrne said, .I may be the first CEO in history to celebrate receiving an SEC subpoena…
You would think that this simple fact would make it difficult for anyone to claim that I have been unforthcoming about receiving an SEC subpoena.
Patrick Byrne: Are you now claiming that a press release on May 9 about a subpoena received on May 17 was a disclosure of that May 17 subpoena?
I’m sure I don’t have to explain how silly Patrick’s statement about the subpoena and the press release is.
Patrick then goes on in a later message to say the following:
On the other hand, if you want to insist that I was subpoenaed but did not disclose it, you have to claim, then, that when I wrote, “I may be the first CEO in history to celebrate receiving an SEC subpoena” I was not telling the truth because I had NOT been subpoenaed: to maintain this, however, you have to insist that the distinction between “being subpoenaed” and “being CEO of a company that is subpoenaed in part about things you have said and done” is really a solid, well-founded distinction.
So now, Byrne is claiming that the May 9 press release about the company’s subpoena really included his personal subpoena, even though he didn’t actually disclose that and the subpoena hadn’t even been issued yet. That might wash with some people, but not with me.
He now disclosed the personal subpoena separately, so he must believe that it has some significance and requires disclosure. Either it needs to be disclosed or it doesn’t, but Patrick seems to be saying that it didn’t need to be disclosed separately a year ago, and this year it does. Nonsense.