Last week, Overstock.com CEO Patrick Bryne celebrated an apparent victory in court. Overstock is suing Gradient Analytics and Rocker Partners over some negative reports that were issued about Overstock. Of course, the negative reports weren’t negative because Overstock is a crappy company. No, the negative reports were negative simply because there is a Sith Lord conspiracy against Overstock.
So Byrne was busy doing his happy dance over this court ruling that allowed Overstock’s lawsuit to proceed. We’ll see how happy that ends up for Overstock, though, as there will certainly be some interesting things revealed when discovery begins and depositions are taken.
Investigative journalist Gary Weiss notes:
This means that Overstock’s wack-a-doo CEO Patrick Byrne will now be subjected to the hot light of civil discovery proceedings for the first time in his life. It means that Gradient and Rocker’s legal team, headed by superlawyer David Boies, will now subject Overstock to subpoeanas for documents, and that Byrne & Co. will be grilled in lengthy, detailed, excruciating depositions.
If Byrne is aware of the Pandora’s box he has opened, it would surprise me. The man is so deluded and detached from reality that I doubt that he has the wits to contemplate the consequences of anything he does.
Such as, for instance, being hacked to pieces by David Boies under penalty of perjury.
Such as beginning a process in which every single thing that Overstock.com, Patrick Byrne, and his minions have done will be exposed to public airing. The fruits of this inquisition will be available for everyone — you, me, the media, regulators, the SEC, prosecutors — to feast upon.
Lies and spin can only count against him, as will the company’s long list of misdeeds — ranging from questionable accounting to hiring a paid stalker named Judd Bagley. The latter took time out from dressing up as a woman to stalk Wikipedia editors, and crafted a creepy press release “celebrating” this awful news.
Sam Antar painstakingly recounts the recent history leading up to this “victory” in court for Overstock.com and Wacky Patty. Here are some of the highlights:
- July 2003 – Gradient Analytics is researching Overstock and questioning financial disclosures and accounting policies
- February 2004 – Rocker Partners (a short seller) takes a short position in Overstock
- July 2004 – Rocker Partners becomes a Gradient customer
- Fall 2004 – Patrick Byrne gets upset over a FORTUNE article called “Is Overstock the Next Amazon?” and sends a derogatory email to the author, Bethany McLean
- Fall 2004 – Gradient releases another report on Overstock, which questions the independence of the company’s board members, and Byrne sends Donn Vickrey of Gradient a derogatory email
- January 2005 – Patrick Byrne gets Phil Saunders to appear on the company’s earnings conference call under the fake name “Bob O’Brien” and say that there is a conspiracy to drive down the price of Overstock’s shares
- February 2005 – SEC begins an informal investigation of Overstock.com
- August 2005 – Patrick Byrne discloses the informal SEC investigation during his “Sith Lord” conference call
- August 2005 – Overstock.com files its lawsuit against Gradient and Rocker. Three former employees of Gradient, Demetrios Anifantis, Robert Ballash, and Darryl Smith alleged wrongdoing by Gradient. Affidavits state that Gradient’s research reports were biased to benefit clients who were short selling. These allegations are the basis for Overstock’s lawsuit.
- September 2005 – Roddy Boyd of the New York Post reports that Anifantis and Ballash were fired for violations of Gradient’s corporate policies and they were not invovled in research at Gradient. This draws into question their actual knowledge of whether research reports were biased.
- October 2005 – SEC begins an investigation of Gradient Analytics, which is closed in February 2007 with no action against Gradient.
- May 2006 – The informal SEC investigation of Overstock and Patrick Byrne escalates to a formal investigation.
- May 2006 – Overstock.com receives a subpoena from the SEC. Patrick Byrne receives a personal subpoena from the SEC. Only the subpoena of the corporation is disclosed to the public.
- May 2007 – One year after receiving a person subpoena from the SEC, Patrick Byrne discloses the fact that he received it.
Check out Sam’s blog for more details on the timing of the hiring of the above employees (stooges) and their allegations against Gradient and Rocker. Quite interesting, indeed.