Monday, October 22, 2007

Open Letter to Patrick Byrne, CEO of Overstock.com

Delivered via email, return receipt requested

To Patrick Byrne (CEO of Overstock.com):

I read your latest earnings conference call transcript last Friday for Overstock.com's third quarter of fiscal year 2007. It is my understanding that you now claim to be ready to answer my questions about Overstock.com's financial and other disclosures, its accounting policies, your actions, your lies, your deceptions, your distortions, your deceitful behavior, your despicable conduct, your cronies, and your continued violations of your company's Code of Business Conduct and Ethics.

I quote your comment in the third quarter fiscal year 2007 earnings conference call transcript:

Sam Antar, if you want to join us as an [inter-locketer], I have to stick around -- I have to leave in 15 minutes but I'm hoping you'll join, Sam.

I quote another comment from you:

I have 10:02 -- Sam Antar, are you on the line? Come on, Sam. Okay, I've got to get over to a talk.

Note: Bold print and italics added by me.

I was not even listening to your third quarter conference call and you knew that I was not on the call. I had planned to read the full transcript later in the day. For the previous second quarter conference call, Kevin Moon would not submit my emailed questions because I was a couple of minutes late.

During the most recent third quarter conference call, you apparently agreed to address the questions that I have asked in my blog regarding Overstock.com, your actions, and the actions of persons working in concert with you. Meanwhile, you still have not provided clear, truthful, and unambiguous answers to previous questions that I asked you in our previous email exchanges, my email requests to Kevin Moon, and other questions that I have raised in this blog. Instead, you continue to dodge and evade questions about your company, your actions, and persons working in concert with you, with deflection, smears, grandstanding, and false bravado.

On May 9, 2006, Overstock.com disclosed that the Securities and Exchange Commission started a formal investigation of the company. On May 17, 2006, you received a personal subpoena from the Securities and Exchange Commission. However, Overstock.com delayed its disclosure of your personal subpoena from the SEC for almost an entire year and disclosed it on May 9, 2007. A day later, on May 10, 2007, you reassured investors and claimed:

...that the heart of the investigation is not, I would suggest, Overstock-centric, but rather, concerns itself with a strange set of relationships among ..... Well, let me just say that the irony here is just delicious.

Note: Bold print and italics added by me.

On August 10, 2007, you admitted to being a target of an investigation by the Securities and Exchange Commission, in contrast to your previous denials.

You and other persons working in concert with you have engaged in a consistent and continuous pattern of deceptive and misleading statements about Overstock.com. You have conducted a smear campaign with surrogates who use harassment, intimidation, blackmail, threats, anti-Semitism, false accusations, and lies in an effort to silence your critics and other persons who disagree with your paranoid and delusional fantasies and agendas.

You seem to be living under the delusion that a so-called good quarter will absolve Overstock.com, you, and those persons working in concert with you, of any wrongdoing. The issue here is the investigation by the SEC of possible securities law violations by Overstock.com, you, and other persons working in concert with you. If the SEC believes that Overstock.com, you, and other persons working in concert with you have violated other civil and criminal statutes, they often refer those issues to other appropriate government agencies.

I will be in Salt Lake City on October 31, 2007 and plan on meeting with investigators from the Securities and Exchange Commission to discuss issues about Overstock.com, you, and other persons working in concert with you. Since you now claim to be ready to engage me, I invite you to answer my questions in person with me and personnel from the Securities and Exchange Commission at 12 PM local time on October 31, 2007 at their Salt Lake City offices. I will waive my rights to have counsel present and any immunity as I voluntarily discuss with the Securities and Exchange the issue of Overstock.com, you, and other persons working in concert with you.

Will you agree to attend such a meeting and answer questions while waiving your right to have counsel present and any immunity, too? Will you come to such a meeting without any counsel or advisors to guide, coach, and advise you, as I have agreed to do? Let the SEC hear your unfiltered explanations of your despicable behavior, deceitful actions, and misleading disclosures. Will you finally answer questions truthfully, clearly, unambiguously, and without deception about Overstock.com's disclosures, its accounting policies, your lies, your deceptions, your deceit, your distortions, your misleading statements, your despicable behavior, your cronies, and your continued violations of Overstock.com's Code of Business Conduct and Ethics, in person with me and investigators from the SEC, without having any person around to coach you?

If you accept my advance invitation, plan on spending the entire day at the SEC, rather than a few minutes that you claim to have allocated during your conference call. If you agree to attend such meeting and answer questions, you are invited to tape record the meeting, since I plan on tape recording my questions and your responses.

You will have your golden opportunity to respond to me in person rather than through email or by telephone conference calls. I am quite sure that the SEC would like to hear your explanations of Overstock.com's disclosures and your deceitful actions without the presence and assistance of any advisors. On May 9, 2006, when the SEC notified Overstock.com of its formal investigation of the company, you claimed to "celebrate" the SEC investigation of Overstock.com. I note that Overstock.com's recent 10-Q (page 16) claims:

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

Note: Bold print and italics added by me.

If you have done nothing wrong, really celebrate the SEC investigation, are really willing to cooperate with the SEC in its investigation, and now as you claim you are willing to answer my questions, you will answer such questions from me about Overstock.com, you, and your collaborators in front of persons at the SEC.

If you decline to attend such a meeting and answer my questions, I will assume that your continued failure to address these issues is an admission that I have raised valid points that need to be vigorously pursued by the Securities and Exchange Commission and possibly other government law enforcement agencies. Unlike your belated personal invitation to me to ask questions at your earnings conference call, I am giving you about a week to prepare to face me and personnel from the Securities and Exchange Commission. However, I request a prompt yes or no answer to my invitation by Tuesday, October 23, 2007.

Respectfully,

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

PS: Perhaps, your Director of Communications, Judd Bagley, will agree to a separate meeting with the SEC and me, too? I would be willing to stay an extra day in Salt Lake City to hear his unfiltered explanation of the issues that I have raised with the SEC. I am quite sure that the SEC wants to hear his answers to my questions, without coaching, too.

Cc:
Christopher Cox, Paul S. Atkins, Kathleen L. Casey, Annette L Nazareth (SEC Commissioners)
Ken Israel, William McKean, and Norman Korb (SEC Utah Office)
Richard Simpson (SEC Washington Office)
Joseph J. Tabacco Jr. and Clay Corbus (Overstock.com Audit Committee members)
Judd Bagley (Director of Communications at Overstock.com)

Index to my blog posts about Overstock.com

No comments: