Wednesday, May 09, 2007

Patrick Byrne, CEO of Overstock.com, receives SEC subpoena

Patrick Byrne, CEO of Overstock.com, received a subpoena from the Securities and Exchange Commission, but it wasn't disclosed until a year later.

Overstock.com's 10–Q for the most recent quarter ended March 31, 2007, was filed today (May 9, 2007) with the Securities and Exchange Commission. It contained the following disclosure about the Securities and Exchange Commission investigation into Overstock.com:

On May 9, 2006 the Company received a notice of an investigation and subpoena from the Securities and Exchange Commission, Salt Lake City District Office. On May 17, 2006, Patrick Byrne also received a subpoena from the Securities and Exchange Commission, Salt Lake City District Office. These subpoenas requested a broad range of documents, including, among other documents, all documents relating to the Company’s accounting policies, the Company’s targets, projections or estimates related to financial performance, the Company’s recent restatement of its financial statements, the filing of its complaint against Gradient Analytics, Inc., the development and implementation of certain new technology systems and disclosures of progress and problems with those systems, communications with and regarding investment analysts, communications regarding shareholders who did not receive the Company’s proxy statement in April 2006, communications with certain shareholders, and communications regarding short selling, naked short selling, purchases and sales of Company stock, obtaining paper certificates, and stock loan or borrow of Company shares. The Company and Mr. Byrne have responded to these subpoenas and each continues to cooperate with the Securities and Exchange Commission on this matter. [emphasis added.]

However, previous disclosures by Overstock.com, including, but not limited to its:


Excluded this disclosure:

On May 17, 2006, Patrick Byrne also received a subpoena from the Securities and Exchange Commission, Salt Lake City District Office.

And this disclosure:

The Company and Mr. Byrne have responded to these subpoenas and each continues to cooperate with the Securities and Exchange Commission on this matter.

Overstock.com's first disclosure about an investigation by the Securities and Exchange Commission was on May 9, 2006.

Its 8-K, filed with the Securities and Exchange Commission reported:

On May 9, 2006 the Company issued a press release regarding its receipt of a subpoena from the Securities and Exchange Commission, Salt Lake City District Office. The subpoena requests a broad range of documents, including, among other documents, all documents relating to the Company’s accounting policies, the Company’s targets, projections or estimates related to financial performance, the Company’s recent restatement of its financial statements, the filing of its complaint against Gradient Analytics, Inc., the development and implementation of certain new technology systems and disclosures of progress and problems with those systems, communications with and regarding investment analysts, communications regarding shareholders who did not receive the Company’s proxy statement in April 2006, communications with certain shareholders, and communications regarding short selling, naked short selling, purchases and sales of Company stock, obtaining paper certificates, and stock loan or borrow of Company shares.

According to Overstock.com's recent 10 - Q, for the quarter ended March 31, 2007, (filed on May 9, 2007), Patrick Byrne received a separate subpoena, and about eight days after the company received a subpoena.

Why didn't Overstock.com issue a new 8 - K and disclose Patrick Byrne's separate subpoena?

We are left to wonder why Overstock.com waited almost a year to report that Patrick Byrne had received a separate subpoena from the Securities and Exchange Commission.

Perhaps, Patrick Byrne, CEO of Overstock.com can answer this question, too.

Written by,

Sam E. Antar (former Crazy Eddie CFO & convicted felon)


Other blogs covering Overstock.com:

Gary Weiss - The SEC Subpoena Patrick Byrne 'Forgot'

Herb Greenberg's Market Blog - SEC Subpoenas Overstock CEO Patrick Byrne

Herb Greenberg's Market Blog - Byrne Gone Wild

Notions on High and Low Finance - A Conspiracy So Vast, by Floyd Norris

O-Smear - The 1,281 Word "No Comment"

Lee Distad's Professional Opinion - CEO "forgets" to tell investors he's been subpoenaed by the SEC...for over a year!

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