Wednesday, November 18, 2009

Overstock.com CEO Patrick Byrne Ducks Crucial Questions About GAAP Violations During Call

This evening Overstock.com (NASDAQ: OSTK) held a conference call to discuss certain financial reporting violations covered extensively in this blog, their firing of Grant Thornton as their auditors who agreed with me on the accounting issues now being investigated by the SEC, and their unprecedented filing on an "unreviewed" Q3 2009 10-Q.

I sent emails to Overstock.com CEO Patrick Byrne (pictured to the right) and that were cc'd to other persons at the company requesting to ask questions during the call about the company's establishment of an improper "cookie jar reserve" in Q3 2008 to materially overstate it financial performance in later quarters. Instead, Byrne stonewalled me in his responses to my emails.

In any case, I dialed into the call, identified myself to the operator, and Patrick Byrne was aware of my presence on the call. When they requested questions from the participants, I dialed *1 as instructed by them. The company took questions from other participants in the call. However, my attempts to ask important questions about the issues at hand were blocked by Overstock.com. Their statement that there were "no more questions" is a flat out lie. Patrick Byrne is simply afraid to answer my questions about Overstock.com's financial reporting violations in an open forum.

I had questions--and I have the answers, too. However, I am traveling to make a speech at the University of Massachusetts tomorrow. I will be exploring issues raised in the conference call and other public statements by management in a blog post when I return. In any case one thing is certain, Overstock.com has yet to produce a single financial report since the company's inception that has not violated Generally Accepted Accounting Principles (GAAP) or other SEC disclosure rules and its management continues to make false and misleading representations to investors in violation of rule 10b-5.

Written by:

Sam E. Antar

Note: Please read my guest article in Newsweek entitled, "Bernie Madoff's Giant Ponzi Scheme."

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

I do not own Overstock.com securities short or long. My research on Overstock.com and in particular its lying CEO Patrick Byrne is a freebie for securities regulators and the public in order to help me get into heaven, though I doubt that I will ever get there anyway. I will probably end up joining corporate miscreants such as Patrick Byrne in hell. In any case, exposing corporate crooks is a lot of fun for a forcibly "retired" crook like me.

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