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Showing posts from October, 2009

Patrick Byrne To Tough It Out With SEC Over GAAP Violations

Apparently, Overstock.com (NASDAQ: OSTK) is going to stubbornly tough it out and force the Securities and Exchange Commission to take enforcement action to make its financial reports comply with Generally Accepted Accounting Principles (GAAP). The SEC re-opened its investigation of Overstock.com in response to a series of investigative reports by this blog documenting continuing GAAP violations by the company and other false and misleading representations to investors by its management team, led by CEO Patrick M. Byrne.Flawed financial reports incorporated in new registration statementEarlier today, Overstock.com filed a registration statement in connection with its 2005 Equity Incentive Plan. CEO Patrick M. Byrne, CFO Steven J. Chesnut, audit committee members Allison H. Abraham, Clay Corbus, and Joseph J. Tabacco Jr. all signed off on Overstock.com's SEC filing. In addition, PricewaterhouseCoopers (PWC), Overstock.com's former auditors, consented to the company using flawed …

Overstock.com CEO Patrick Byrne Is In a Very Sour Pickle

Overstock.com CEO Patrick Byrne is in a pickle or let’s just say that he is in a sour pickle. He has to make key decisions within the next weeks, before issuing his Q3 2009 financial reports, on how to handle certain financial reporting violations uncovered by this blog and now being investigated the Securities and Exchange Commission. As a result of my forensic accounting analysis, the SEC took the highly unusual step of bravely restarting its investigation of Overstock.com’s financial reporting violations, after dropping a previous investigation in June 2008 (details here). My forensic accounting report to the Securities and Exchange CommissionIn my open letter to the SEC, I detailed how Overstock.com failed to comply with Generally Accepted Accounting Principles (GAAP) in correcting its customer refund and credit errors and improperly created a "cookie jar reserve" to materially inflate reported earnings or reduce losses in future reporting periods (details here).In Octob…

Crain's New York Business: Crazy Like a Fox - Aaron Elstein Interviews Me

The interview is available on newsstands or it can be downloaded from's Crain's New York Business with a trial subscription here. You can also read the article in Investment News (Crain's sister publication) here. Here are some quotes:"Guess who's tipping off the SEC on alleged accounting frauds? None other than the guy who cooked the books at Crazy Eddie...." "Despite his felonious past, Sam Antar has earned credibility with law enforcement officials. He’s spent much of the past decade talking to the FBI, the Justice Department, the IRS, accounting students and business groups, explaining how Crazy Eddie fooled auditors for so long.The former CPA says he feels bad about what he did and wants to help overmatched investigators as they try to root out savvy fraudsters."The article also discusses how I exposed Overstock.com's "cookie jar" reserves that violate Generally Accepted Accounting Principles (GAAP). Based on my forensic accountin…