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Showing posts from May, 2008 Continues to Violate SEC Regulation G and Materially Overstate EBITDA in Q1 2008

If the Securities and Exchange Commission Division of Corporation Finance had examined’s (NASDAQ: OSTK) non-GAAP financial disclosures such as EBITDA, they would have found violations of SEC Regulation G governing non-GAAP financial measures that caused EBITDA to be materially overstated in the company’s second, third, and fourth quarter fiscal year 2007 financial reports. Instead, they focused only on’s revenue accounting practices up to fiscal year 2007 and discovered that the company had intentionally violated GAAP in reporting revenue as far back as fiscal 2000. In’s Q1 2008 earnings release and 10-Q report the company continued to improperly remove from its EBITDA calculation, certain stock-based expenses in violation of Regulation G. As a result,’s reported Q1 2008 EBITDA of $3.524 million was materially overstated by $1.339 million or about 61%. In previous blog posts (here, here, and here), I detailed’s SEC …

Warning from a Convicted Felon: Don't Be Fooled by People Who Flaunt Their Integrity

Warning from a convicted felon: White collar criminals build a wall of false integrity around them.
White collar criminals measure their effectiveness by the comfort level of their victims.
White collar criminals consider your humanity as a weakness to be exploited in the execution of their crimes.
For additional information, you can read my inteview by Susan Tompor in the Detroit Free Press (here).Written by:Sam E. Antar (former Crazy Eddie CFO and a convicted felon) and PricewaterhouseCoopers: Errors in Submissions to SEC Division of Corporation Finance

This time it’s outright incompetence and stupidity. Add ineffective Audit Committee oversight, too.After reading one of the many letters back and forth between the Securities and Exchange Commission Division of Corporation Finance and David Chidester, CFO of (NASDAQ: OSTK), I have found many errors in the company's submissions to the SEC. What's worse is that's auditors, PricewaterhouseCoopers LLP, assisted the company in providing erroneous information to the SEC in response to its inquiries about certain company non-GAAP revenue accounting practices and related disclosures.As detailed below, Patrick Byrne, CEO, has praised the "unbelievable crystal clear view of the business driven" by CFO David Chidester's "information" and Allison H. Abraham, Audit Committee Chairperson, considers PricewaterhouseCoopers LLP's work "to be consistent and of high quality." However, as you will see from the facts presented b… and Patrick Byrne: Anatomy of a Stock Market Manipulation Scheme (Part 3)

More pumping and new false statements and disclosures uncoveredMy criminal cousin Crazy Eddie Antar once told me that “people live on hope and their hopes and dreams must be fed by through our spin and lies.” Apparently, (NASDAQ: OSTK) CEO Patrick Byrne has adopted my cousin’s despicable mantra as he continues his unabated manipulative schemes to hype his company’s financial prospects, in a deliberate effort to artificially drive up the market value of its common stock.As detailed in previous blog posts (here, here, and here), Patrick Byrne’s vindictive self-described campaign to “knee the shorts in the groin….for fun and amusement” is an affront to the integrity of our financial markets and raises serious issues of securities law violations for both Byrne and, both of whom are under investigation by the Enforcement Division of the Securities and Exchange Commission. In addition, new information contained in correspondence between the SEC Division of Corpor…