Monday, June 04, 2007

Open Letter to the Audit Committee of Overstock.com: Patrick Byrne denies using private eyes

To Clay Corbus and Allison H. Abraham (Audit Committee Members)

There is a certain disclosure by Patrick Byrne, CEO of Overstock.com that requires your immediate attention.

In a previous blog post which I e-mailed to you entitled “Open Letter to the Audit Committee of Overstock.com: The Company’s Code of Business Conduct and Ethics and actions of Patrick Byrne and others," I outlined certain issues of concern to the Audit Committee about possible violations of Overstock.com’s Code of Business Conduct and Ethics by Patrick Byrne.

In another blog post which I e-mailed you entitled, “Memo to Judd Bagley: Director of Communications at Overstock.com - About Threats on AntiSocialMedia.net,” I provided you with a copy of a threat to Gary Weiss, which Judd Bagley (Director of Communications at Overstock.com) permitted to be published on antisocialmedia.net.

Recent disclosure by Patrick Byrne (CEO of Overstock.com) in a post on InvestorVillage.com

On May 28, 2007, in a post (message # 7655) on InvestorVillage.com, using the alias Hannibal, Patrick Byrne wrote the following post about private investigators:

I DON'T USE PRIVATE EYES. WE DO USE SOME SECURITY FIRMS FOR PHYSICAL SECURITY.

However, I read the "Information" filed on Michael Lair, a private investigator that Overstock.com had in fact hired. It states in part:

...additional victims...an attorney working for an internet services company involved in a high-profile litigation with hedge funds, which paid $50,000....

I read the "Judgment" filed on Michael Lair, the private investigator that Overstock.com hired. It states in part:

Target Entity: Overstock.com

Loss Amount: $50,000 (04/04/2006)

Contact Info: Jonathon Johnson
Overstock.com

6350 South 3000 East
Salt Lake City, Utah 84121

Question:

Do you believe that the answer that Patrick Byrne (CEO of Overstock.com) provided on InvestorVillage.com about using private eyes was deceptive and misleading?

Overstock.com's Code of Business Conduct and Ethics

I ask you to consider Overstock.com's Code of Business Conduct and Ethics.

Item 5 of Overstock.com’s Code of Business Conduct and Ethics states in part:

No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

Note: Bold print and italics added by me

Item 14 of Overstock.com’s Code of Business Conduct and Ethics states:

In performing his or her duties, each of the Senior Financial Officers must....provide, or cause to be provided, full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with or submits to the Securities and Exchange Commission and in other public communications made by the Company.

Note: Bold print and italics added by me

Questions:
Do you believe that Patrick Byrne violated Item 5, above, of Overstock.com’s Code of Business Conduct and Ethics?

Do you believe that Patrick Byrne violated Item 14, above, of Overstock.com’s Code of Business Conduct ad Ethics?

Additional Overstock.com Code of Business Conduct and Ethics provisions to consider

The introduction of Overstock.com’s Code of Business Conduct and Ethics states in part:

All of our employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior.

Note: Bold print and italics added by me

Overstock.com’s Code of Business Conduct and Ethics states in Item 14 that:

…each of the Senior Financial Officers must… maintain high standards of honest and ethical conduct….

Note: Bold print and italics added by me

Request for investigation of Patrick Byrne's InvestorVillage.com post

Therefore, I respectfully request that the matter of Patrick Byrne’s recent disclosure, where he denies the use of private eyes, be investigated by the Audit Committee for possible Code of Business Conduct and Ethics violations and that appropriate action be taken if required.

Respectfully,

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

PS: For additional information about possible violations of Overstock.com's Code of Business Conduct and Ethics by Patrick Byrne and Judd Bagley, I suggest that you read these recent posts on other blogs:

O-Smear: The Paris Hilton of Corporate America...

Gary Weiss: The Private Dick that Byrne 'Forgot'

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