Does Overstock.com's Audit Committee have its head in the sand regarding Patrick Byrne?

Yesterday, Overstock.com's Audit Committee approved a waiver from the company's Code of Business Conduct and Ethics. According to Form 8-K filed with the Securities and Exchange Commission:

On August 2, 2007, the Audit Committee and Board of Directors of Overstock.com, Inc. (the "Company") waived the potential application of the Company's Code of Business Conduct and Ethics to a personal loan Patrick M. Byrne, the Chairman of the Board and Chief Executive Officer of the Company, proposes to make to Stormy Simon, the Senior Vice President, Branding and Customer Care of the Company. The proposed loan, of up to $1.5 million from Dr. Byrne's personal funds, would not involve the Company or any Company funds.

However, the Overstock.com still continues to engage in selective enforcement of its Code of Business Conduct and Ethics as it relates to many activities of Patrick Byrne (CEO) and Judd Bagley (Director of Communications).

My blog, Gary Weiss, Tracy Coenen, the O-Smear blog, and many others have detailed the vile, malicious, disgusting, and despicable behavior of Patrick Byrne and his main henchman, Judd Bagley. Patrick Byrne has led a campaign of intimidation, harassment, threats, litigation, anti-Semitism, blackmail, deceit, lies, and smears in an effort to silence his critics.

Both Patrick Byrne and Judd Bagley's actions, as detailed in this blog and elsewhere, are clear violations of Overstock.com's Code of Business Conduct and Ethics. Since Overstock.com has not granted Patrick Byrne or Judd Bagley a waiver (which must be disclosed in Form 8-K) from its Code of Business Conduct and Ethics to carry out such tactics, than the failure by the company to take such action constitutes an "implicit waiver" which must also be disclosed.
Since Overstock.com's web site, links to this convicted felon's web site to provide a download of the company's Code of Business Conduct and Ethics, you may get a copy here.

Do Overstock.com's Audit Committee members Allison H. Abraham, Clay Corbus, and Joseph J. Tabacco and its General Counsel, Jonathan Johnson, have their head in the sand like an Ostrich?

Maybe, Overstock.com's Audit Committee and General Counsel should read a recent Tenth Circuit decision concerning D & O policy rescission in the D & O Diary Blog.

Written by:

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

Other blogs covering this latest latest Overstock.com craziness:

Gary Weiss - Bulletin: Overstock.com Has a 'Code of Ethics'