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Showing posts from November, 2008

New York Democratic Party Leadership Takes Money from Same-Sex Marriage Supporters and Won't Deliver on Promises

Many politicians from both sides of the aisle emulate the same character traits as criminals. Criminals consider your humanity as a weakness to be exploited in the execution of their crimes. First, criminals try to raise your comfort level by bonding with you to gain your trust. After gaining your trust, criminals take your money based on false promises of hope. As the criminal CFO of Crazy Eddie, I sold many gullible investors on the hope of a prosperous future by using phony financial reports to raise their comfort level and trust.
Apparently, the same holds true with the New York Democratic Party leadership. They exploited the aspirations of gay rights supporters by selling them the hope of promptly moving to legalize same-sex marriage in return for campaign contributions to get party members elected. Now they are telling those same voters that swift action on same-sex marriage legislation may make them unelectable in the future. According to a New York Times article by Jeremy W. Pe…

Overstock.com: Rule 10b-5 Exposure from Disclosure Violations

In this blog post, I will detail how certain members of Overstock.com's (NASDAQ: OSTK) unprincipled management team conned investors into believing that the company's non-compliant EBITDA disclosures were in compliance with Securities and Exchange Commission Regulation G, governing non-GAAP disclosures. I believe that Overstock.com's non-compliant EBITDA disclosures that materially overstated the company's financial performance, together with other false and misleading representations by management, expose them to possible violations of anti-fraud Rule 10b-5. In my last blog post, I detailed how Overstock.com finally amended its financial reports to comply with SEC Regulation G, almost a year after it was notified by me of its violations. This blog was first in exposing how Overstock.com used a non-compliant EBITDA measure to overstate its financial performance from Q2 2007 to Q2 2008.Other bloggers, such as forensic accountant Tracy Coenen, NY Times columnist Floyd No…

Is Trimble Navigation's Stock Repurchase Program a Pump and Dump for Insiders?

In my last blog post about convicted felon turned fraud fighter Barry Minkow’s expose of corporate officers and directors misrepresenting their resumes, I closed with the following comment, “As a convicted felon, I have learned that where there is smoke there is usually fire.” In this blog post, I take a closer look at Trimble Navigation Limited (NASDAQ: TRMB).According to a Fraud Discovery Institute (Minkow’s private investigation company) background check, Executive Vice President and Executive Committee member Dennis L. Workman claimed in various SEC filings (latest 10-K here) that he obtained a Master of Science Degree in Electrical Engineering from the Massachusetts Institute of Technology (MIT) in 1969. However, a background check by FDI shows that while Dennis Workman attended MIT from September 19, 1967 to May 31, 1968, no degree was conferred.The Wall Street Journal contacted MIT and reported that:M.I.T. says Mr. Workman attended the school, studying physics for two semesters…

Barry Minkow Exposes Corporate Scoundrels Misrepresenting Their Resumes

My dear friend and mentor convicted felon turned fraud fighter Barry Minkow has a message for deceitful directors and officers of public companies: If you lie about your resume, past experience, and qualifications for your present job and such lies show up in SEC filings, he will find out about it and expose you to investors and regulators.Minkow and I believe that if you lie about your educational background, you are capable of lying about anything else, too. Investors require honesty from the fiduciaries running their companies. If Barry Minkow can find false credentials in corporate America where company gatekeepers have failed, what other more devastating internal control failures exist that we do not know of?According to an article in the Wall Street Journal article by Keith Winstein, a survey of 358 senior executives and directors at 53 publicly traded companies conducted by Barry Minkow and his private investigation firm, the Fraud Discovery Institute (FDI), found at least seve…

Advice to President-Elect Barack Obama about Combating White Collar Crime From a Convicted Felon

To President-Elect Barack Obama:While our capital markets require reform, no amount of regulation or oversight can be effective unless those persons charged with carrying it out, have the proper amount experience, knowledge, competence, and professional skepticism to successfully perform their respective jobs and responsibilities. As the cold-blooded and heartless criminal CFO of Crazy Eddie, I had no fear of oversight from outside or independent board members and our external auditors. I took advantage of their lack of requisite skills, knowledge, and experience to effectively carry out my crimes. If you want to see capitalism succeed as an engine for our future economic prosperity, I respectfully ask you to first consider the issue of competence, before looking at the issue of regulation and oversight.Window Dressing Boards of DirectorsWe need better standards of qualification for public company board members. Too often, company boards are packed with people with great resumes but s…

Overstock.com's New Disclosures Today Show Company Financial Reports Were a "Joke"

Overstock.com’s (NASDAQ: OSTK) new amended financial reports filed today, vindicates findings, first exposed in this blog, that the company violated Securities and Exchange Commission Regulation G governing non-GAAP disclosures, such as EBITDA and materially overstated its non-compliant EBITDA in financial reports dating back to Q2 2007. Even worse, Overstock.com disclosed in its 10-Q for Q3 2008, released today, that its restatement of financial reports dating back to 2003, due to accounting errors relating to revenues, customer refunds, and customer credits, may subject the company to future regulatory action from the Securities and Exchange Commission and litigation from shareholders seeking damages:On October 24, 2008, we disclosed certain accounting errors and announced our intent to restate certain of our financial statements and other information to correct these errors (see Note 3 to the consolidated financial statements contained in Part I, Item 1 “Financial Statements (Unaud…