Below is an Open Letter to the Audit Committee of Overstock.com.
Certain items that are quoted will be repulsive to many readers. However, it is important that you bear witness to a corporate smear campaign at its ugliest.
The Director of Communication for Overstock.com, Judd Bagley runs a smear web site called antisocialmedia.net. His activities have the tacit endorsement of Patrick Byrne, the CEO of Overstock.com. In the open letter to the Audit Committee, I show certain vile and malicious actions of an executive of a public corporation with the endorsement of his boss.
The Audit Committee of Overstock.com has a simple choice: wheather they choose to be associated with such vile ugliness from their inaction in fully enforcing the company’s Code of Business Conduct and Ethics or to take swift action to prevent further vile acts by Patrick Byrne, Judd Bagley, and others acting in concert with them.
Let's see if Overstock.com’s Audit Committee has takes any action regarding Patrick Byrne and Judd Bagley.
Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism
To Allison H. Abraham, Clay Corbus, and Joseph J. Tabacco, Jr. members of the Audit Committee of Overstock.com:
Previous e-mail notified you of threat to Gary Weiss that Judd Bagley permitted to be published on antisocialmedia.net
In a previous e-mail, (prior to Joseph J. Tabacco, Jr. joining the Board of Directors), I alerted you of the fact that Judd Bagley (Director of Communications at Overstock.com) permitted the following threat to journalist Gary Weiss to remain posted on the smear web site, antisocialmedia.net:
"Gary Weiss is PATHETIC…his books suck …he is a weasel. In fact, there are quite a few people out there that are going to make an example out of him. He should be looking over his shoulders more carefully when he wants to engage in disrespectful behavior with people that will hurt him…economically, emotionally, and probably physically. Hey Gary…Louie P and Benny S. say hi…you $cumbag."
Posted 10 Sep 2006 at 8:36 am
After the Audit Committee received my e-mail, Judd Bagley is again permitting vile, malicious, and anti-Semitic comments to be published on antisocialmedia.net
After the Audit Committee received an e-mail from me notifying you of the above threat to Gary Weiss, Judd Bagley permitted a vile, malicious, and anti-Semitic comment to be published on antisocialmedia.net from Edward Manfredonia. Recently, he had deleted other comments by Mr. Manfredonia that had remained published on antisocialmedia.net for months.
Note: I have copies of such comments
Now Judd Bagley has again permitted Edward Manfredonia to post new comments on antisocialmedia.net.
The newly published comment by Edward Manfredonia (deleted after an Audit Committee member was notified earlier today) stated:
edward manfredonia wrote:
SAM ANTAR: A SPIRITUAL DESCENDANT OF THE KAPPOS IN AUSCHWITZ
Sam Antar is a liar, thief, and convicted felon. Sam “the Ant’ smears my name because I have proved that Sam “the Ant” is a hypocrite.
Sam’s beloved cousin, Crazy Eddie Antar, continues to launder money into the United States sending part of his vast, illegal fortune to his relatives. Crazy Eddie does this by means of Israeli Banks. How would I know this? Because one of Eddie Antar’s cousins told me about the money laundering. If I know about the money laundering, why has Sam “the Ant,” a self-proclaimed reformed thief not sent a letter to either the Securities and Exchange Commission or the Department of Justice?
Probably because he would have to obtain permission to inform on his cousin. And nobody in his small circle of friends wishes to expose the tip of the money laundering iceberg.
Several questions for Sam Antar.
Did Sam keep millions of dollars that were stolen from American citizens?
Did Sam short the stock of Crazy Eddie in offshore accounts?
Is Sam “the Ant” the consigliere of Gary Weiss, who has covered up murders that were perpetrated by the Russian Mob?
Does Sam “the Ant” have any connection to the Russian Mob in Brighton Beach?
Does Sam “the Ant” possess knowledge of the murders of Al Chalem and Maier Lehmann?
These are valid questions, which have not been answered.
But permit me to shed some light upon the nature of Sam “the Ant.” Sam was an almost universal thief– almost. Sam stole hundreds of millions of dollars from Muslims, Christians and Jews– and Mormons. But Sam Antar was not a sociopath. Sam Antar and his cousin Crazy Eddie did not steal from members of his Orthodox Sephardic synagogue. How do I know? Members of the synagogue told me this important fact.
So, it is readily apparent that perhaps 100 people, members of the synagogue, knew that the stock of Crazy Eddie was a fraud, yet not even one individual from the synagogue informed either the Securities and Exchange Commission or the Department of Justice. That is a fact– and facts can have no value judgment and express no opinion.
You must understand that to Sam Antar, you are not a human. But there is a difference. The Kappos in Auschwitz stole the lives of people. Sam Antar only wanted to steal your money.
And Sam the Ant will smear the name of any decent person, who exposes the lies and hypocrisy of anyone that dares to expose the basic indecency and inhumanity shared by both Sam Antar– and his spiritual mentor, Gary Weiss.
Sam “the Ant” is perhaps the biggest anti-Semite in New York City, because he smears the names of decent people to cover up his financial crimes. And by so doing gives rise to scandal.
Posted 06 Jun 2007 at 5:25 am ¶
Judd Bagley believes that Edward Manfredonia “fell off his rocker a while ago” and is “just a bit...touched.”
On December 3, 2006, in a now deleted post (message number 2571) on InvestorVillage.com, re-created on the O-Smear blog, Judd Bagley, using his anonymous alias antisocialmedia, wrote the following comment about Edward Manfredonia:
Re: Hey Gary
The guy's name is Ed Manfredonia, his website is wallstreetscandals.com, and yes, he fell off his rocker a while ago.
But while his version of reality and the objective observer's version will likely differ, I don't get the impression that he's actively being deceitful...he's just a bit...touched.
Still, if just 10% of the facts he cites are faithful to reality (and in my opinion, it's much higher than that), well let's just say it fits the larger pattern we're all seeing emerge.
In the absence of a direct quote from Gary Weiss on the topic of Ed Manfredonia, read the next best thing (the words of lamborghini751). [Emphasis added.]
Judd Bagley considers Edward Manfredonia to be a knowledgeable advisor
On April 2, 2006, after posting several vile, malicious, and anti-Semitic comments on InvestorVillage.com, Edward Manfredonia was asked by blogger, Scipio Africanus, about his contacts with Judd Bagley on InvestorVillage.com (message number 6050):
"...why are you so interested in my conversations with Judd Bagley?"
This is the Overstock board. It's the only relevance you have here. What are you hiding?
Later that day, in a post (message number 6052) on InvestorVillage.com, Judd Bagley, using his new alias De Daumier-Smith responded:
…Ed may have a quirky way of communicating in writing, but I can assure you he's one of the more knowledgeable people I know. Ed has been enormously generous in sharing his knowledge of how Planet Wall Street works (both in theory and in practice) with me.
If Ed and I spent more than five minutes talking about you or Gary or anything else from this or any other board I'd be shocked.
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.
Item 8 of Overstock.com’s Code of Business Conduct and Ethics states in part:
Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guess work, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports….
In accordance with these policies, in the event of litigation or governmental investigation please consult with the company’s General Counsel.
The flimsy wall built by Patrick Byrne between Overstock.com and antisocialmedia.net
While Judd Bagley claims on antisocialmedia.net that:
Overstock.com has specifically requested that Judd stipulate that Overstock.com disclaims responsibility for the content on this site, and that nobody other than Judd has knowledge of what he is researching or writing before it is published here.
It has been shown that Patrick Byrne has had previous knowledge of posts to be published on antisocialmedia.net by Judd Bagley. See a previous item on my blog entitled “The Deceptions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Social Media at Overstock.com)”
In addition, Patrick Byrne permits Judd Bagley is conduct his smear campaign as evidenced by Mr. Bagley’s many posts on internet message boards and blogs during normal daily business office hours.
Patrick Byrne had endorsed Judd Bagley’s activities by posting links to antisocialmedia.net on Overstock.com’s web site:
In general, I see the situation as being the confluence of four issues: 1) there is a scandal called "naked short selling"; 2) there is a corporation (the DTCC) at the heart of the scandal; 3) there is a reporter (Gary) using his offices to deny, minimize, and cover-up that scandal; 4) Gary and DTCC appear to have a professional relationship ( http://antisocialmedia.net/pmwiki/pmwiki.php?n=Main.WeissDTCC ).
Patrick Byrne has warned his critics about being smeared on antisocialmedia.net
For example, in a post (message number 2964) on InvestorVillage.com, using the alias Hannibal, Patrick Byrne wrote:
Can everyone sense these guys sweating? They seem to be getting nervous, don't they? Hence the posts full of non sequitors and picking of nits about unimportant details. They apparently hope that they can confuse the average reader, as long as that reader does not go and read the original antisocialmedia.com material exposing (with screeen shots and IP addresses) these bullies.
But the average reader may still ask, Why are they so nervous, and why now? The answer is, it is because the bullies know what is coming, they know where this antisocialmedia stuff is heading, in a way that the average reader does not. They are flailing in an attempt to derail it. [Emphasis added.]
Risk factors for fraud according the Statement of Auditing Standards 99
According to Statement of Auditing Standards 99:
This document identifies measures entities can implement to prevent, deter, and detect fraud. It discusses these measures in the context of three fundamental elements. Broadly stated, these fundamental elements are (1) create and maintain a culture of honesty and high ethics; (2) evaluate the risks of fraud and implement the processes, procedures, and controls needed to mitigate the risks and reduce the opportunities for fraud; and (3) develop an appropriate oversight process. Although the entire management team shares the responsibility for implementing and monitoring these activities, with oversight from the board of directors, the entity's chief executive officer (CEO) should initiate and support such measures. Without the CEO's active support, these measures are less likely to be effective. [Emphasis added.]
Consider the Caremark case
In Caremark, the Delaware Chancery Court stated that it would be a mistake to conclude that corporate boards can:
... satisfy their obligation to be reasonably informed concerning the corporation, without assuring themselves that information and reporting systems exist in the organization that are reasonably designed to provide to senior management and to the board itself timely, accurate information sufficient to allow management and the board, each within its scope, to reach informed judgments concerning both the corporation's compliance with law and its business performance.
Consider the continuing Securities and Exchange Commission investigation of Overstock.com and Patrick Byrne
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 contained the following disclosure:
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.
Yahoo had continually deleted Edward Manfredonia’s anti-Semitic remarks
Yahoo has continually deleted Edward Manfredonia’s comments on its Overstock.com message board. Mr. Manfredonia’s posting privileges have been cancelled several times and he has logged on under new profiles to continue posting his venom.
What actions will you take to stop Patrick Byrne's smear campaign?
Do you as Audit Committee members desire to be tainted by the actions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Communications at Overstock.com)?
I respectfully, ask you to consider your legal consequences as members of the Audit Committee of Overstock.com arising from violations of the company’s Code of Business Conduct and Ethics by Patrick Byrne and Judd Bagley.
Sam E. Antar (former Crazy Eddie CFO & convicted felon)