Skip to main content vs. Gradient and Rocker Part 2: Countersuit by Rocker

According to Dow Jones Newswire, Copper River Partners LP (formerly Rocker Partners) has filed a countersuit against, Patrick Byrne (CEO), Jack Byrne Jr. (Patrick Byrne's father and former board member), Jason C. Lindsey (President), Allison H. Abraham (Director and Audit Committee member), and John Fisher (former Director and Audit Committee member). The article entitled, "Copper River Files Countersuit Vs Overstock, CEO, Directors," written by Carol S. Remond reports:

According to Copper River's countersuit, Overstock and Byrne, "with the active and knowing participation, approval and ratification of the company's board of directors, have made false claims that the company was profitable when it was not; false projections that it would become profitable when it could not; baseless projections of future revenues that were not obtained; false statements that the company did not require additional capital; false predictions of success of new business ventures; and misleading mischaracterizations of the operation of the company's business and of its business prospects."

This blog has detailed a pattern of deceptions, distortions, and misleading disclosures by, Patrick Byrne, and others working in concert with Byrne. Regarding some of the legal issues outlined in the Dow Jones Newswire article above, I suggest reading my blog item entitled, "Patrick Byrne, the CEO of A history of deception, deceit, and distortion - Part 1: The Early Days." In that blog item, I carefully analyzed a continuous pattern of deceitful, inconsistent, and contradictory statements made by Patrick Byrne that more often than not conflict with other disclosures made by him and

On August 11, 2005, had sued Gradient Analytics, an independent research firm, and Rocker Partners (now Copper River Partners), a short seller. alleged that Gradient's research reports were purposely biased to benefit its customers and that it withheld publication of such reports to allow their clients to accumulate short positions prior to their issuance. Three former Gradient employees (Demetrios Anifantis, Robert Ballash, and Darryl Smith) had signed sworn declarations aka affidavits alleging wrongdoing by their employer.

In my previous blog item entitled, " vs. Gradient and Rocker Part 1: Patrick Byrne and his Three Stooges," I examined credibility issues arising from conflicting, inconsistent, and contradictory allegations of the three former Gradient employees against Gradient and Copper River (formerly Rocker Partners). In another blog item entitled, "Did Patrick Byrne, CEO of, Deliver a Trojan Horse to the Securities and Exchange Commission?," I raised the question as to whether Patrick Byrne used his company's lawsuit against Gradient Analytics and Rocker Partners as a "Trojan Horse" diversion tactic to the Securities and Exchange Commission in an effort to thwart their inquiries and later investigation of and him.

A day after's lawsuit was filed against Gradient and Rocker Partners, Patrick Byrne had claimed that the SEC started an informal inquiry of in February 2005 and that its inquiry "went nowhere." Around October 2005, based on the allegations of, Patrick Byrne, and the three former Gradient employees, the Securities and Exchange Commission started investigating Gradient Analytics. However, on May 9, 2006, the Securities and Exchange Commission started a formal investigation of, in contrast to Byrne's earlier claim that the SEC informal inquiry "went nowhere." On May 17, 2006, the Securities and Exchange Commission served Patrick Byrne a personal subpoena. However, waited almost an entire year, until May 9, 2007, to disclose Patrick Byrne's personal subpoena. In February 2007, the SEC dropped its investigation of Gradient, issued them a "no action" letter, and continued its formal probe of On May 10, 2007, a day after disclosed Patrick Byrne's personal SEC subpoena, about a year late, Patrick Byrne had claimed that the SEC investigation was "not Overstock-centric" and that he was not the focus of their investigation despite the formal SEC probe and having received a personal subpoena from them. However, on August 10, 2007, Patrick Byrne finally admitted to being the "target" of a Securities and Exchange Commission investigation, in contrast to his previous denials.

For additional information about's financial disclosure issues, please read the following blog items:

Stay tuned.

Written by:

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


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