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Showing posts from July, 2009

How to Issue Phony Financial Reports and Mislead Investors – Overstock.com and Patrick M. Byrne Style

In three previous blog posts, I detailed how Overstock.com (NASDAQ: OSTK) violated Generally Accepted Accounting Principles (GAAP) and SEC disclosure rules by improperly deferring the recognition of an accounting error to create a cookie jar reserve to inflate future profits. On October 24, 2008, Overstock.com revealed that it underbilled fulfillment partners in periods prior to Q3 2008 because of customer refund and credit errors. The company improperly chose to recognize future recoveries from underbilling its fulfillment partners on a cash basis (non-GAAP) rather than restating previously issued financial reports to correct the material accounting error (GAAP). Note: Details of my previous blog posts here, here, and here). More recently, I provided Overstock.com with a series of questions to answer about its accounting errors during its Q2 2009 earnings call (Details here). Rather than answer each of my questions, CEO Patrick Byrne went on a ranting diatribe as described by investi…

InterOil, John Thomas Financial, and Clarion Finanz: Anatomy of a Stock Market Manipulation Scheme

In this blog post, I will provide evidence of what I believe is a stock market manipulation scheme involving InterOil (NYSE: IOC), John Thomas Financial, and Clarion Finanz AG. I believe that InterOil with the assistance of Clarion Finanz concealed John Thomas Financial’s involvement in helping it raise $95 million through a private placement of convertible debt securities.

Clarion Finanz acted as a buffer between InterOil and John Thomas Financial to help InterOil hide John Thomas Financial's role in raising funds. Afterwards, InterOil filed false and misleading reports with the Securities and Exchange Commission in an effort to conceal John Thomas Financial’s role in helping the company raise $95 million in convertible debt.

Carl Caserta, who in 1991 was barred by the Securities and Exchange Commission from “association with any broker, dealer, or investment advisor” played a role in helping InterOil use John Thomas Financial to obtain funds from investors. InterOil, John Thoma…

Overstock.com Issues Unregistered Shares to 401-K Plan

Overstock.com (NASDAQ: OSTK), led by masquerading stock market reformer CEO Patrick Byrne (pictured slobbering drunk to the right), can’t seem to maintain proper internal controls for financial reporting. Just last Friday, Overstock.com disclosed that it improperly issued an extra 201,421 unregistered shares of common stock in connection with the company’s 401-K Plan. The company had to file a new registration statement with the Securities and Exchange Commission relating to those improperly issued unregistered shares. In addition, the company disclosed that it “may be subject to civil and other penalties by regulatory authorities as a result of the failure to register these transactions.” See below:Note 8 — Unregistered Shares of Overstock.com

In June 2009, the Company discovered that it inadvertently issued 201,421 more shares of the Company’s common stock in connection with the Plan than were registered on the previously filed Registration Statement on Form S-8 (File No. 333-123540)…

To Bidz.com: Thank you for the subpoena and the check, too!

Memo to Bidz.com CEO David Zinberg:

As you can see by the enclosed picture, I gladly accepted a subpoena from Bidz.com to testify in a class action lawsuit alleging consumer fraud by your company.

My research on Bidz.com (NASDAQ: BIDZ) is a freebie for securities regulators to help me try to get into heaven for past crimes at Crazy Eddie, though I doubt I can ever make up for my past evil acts. My blog posts on Bidz.com's inventory disclosures caused the Securities and Exchange Commission to investigate your company.

Therefore, I thank you for the $44 witness check as a small reward for my efforts, since no one else has paid me to research or write about your company. In fact, when a person from my former office told me that your company was trying to serve me with a subpoena and the attached witness check, I quickly took the subway downtown to accept service and your check.Kindest regards,

Sam E. AntarDisclosure:
I am a convicted felon and a former CPA. As the criminal CFO of Crazy Ed…

InterOil: How a Deceitful Company Made a Very Dumb Deal, Too

So far this blog has shown how InterOil (NYSE: IOC) filed false and misleading reports with the Securities and Exchange Commission and lied to the New York Times about its dealings with Carl Caserta who was banned by the SEC from the securities industry. As I will detail in this blog post, besides InterOil management being deceitful to investors and the press, they seem to be very dumb, too.
On June 1, 2008, InterOil sold its 43.130% interest petroleum retention lease 4 (PRL 4) for $5 million and its 28.56% interest in petroleum retention lease 5 (PRL 5) for $1.5 million to a wholly owned subsidiary of Horizon Oil Ltd. (ASX: HZN). On May 20, 2009, Horizon Oil Ltd, in turn, sold a 50% interest in PRL 4 and a 24.82% interest in PRL 5 to Thailand based P3 Global Energy Co. Ltd. (P3GE) for $55 million. Therefore, Horizon sold a slightly higher combined stake in PRL 4 and 5 to P3 Global Energy Co. Ltd for over eight times the amount it paid InterOil to acquire those interests in less than o…

Diamonds Are Not Forever For Two Key Bidz.com Insiders

Company buys back stock while two key insiders sell their shares

On July 1, 2009, Bidz.com announced that in its latest quarter ended June 30 (Q2 2009), the company repurchased 714,000 common shares at an average price of $3.50 per share for a total cost of approximately $2.5 million. The press release went on to hype the company's future prospects:
"With the price of our stock continuing to trade below what we believe to be a reasonable valuation, our Board of Directors believe that the continued aggressive repurchase of our Company's shares is an excellent use of capital," said, David Zinberg, the Company's Chairman and Chief Executive Officer. "The combination of our liquidity, profitability and our ability to successfully execute our business strategy gives us confidence that the continued repurchase of our shares will help to deliver long-term shareholder value." Meanwhile, during that same quarter David Zinberg (Bidz.com CEO) and his sister Marina…