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Showing posts from October, 2013

Is Trying to Cook The Books, Again?

I hoped that (NASDAQ: OSTK) had finally learned the error of its ways. Now it seems that the company has again resorted to accounting shenanigans to inflate its reported income.


From Q2 2007 to Q2 2008, used an improper EBITDA calculation to materially overstate its pro-forma income in violation of Securities and Exchange Commission Regulation G. From Q4 2008 to Q3 2009, the company violated Generally Accepted Accounting Principles (GAAP) and materially overstated its reported earnings. I endured malicious personal attacks, cyber-stalking, pretexting, and threats to my personal safety from’s gun-toting CEO Patrick Byrne and his paid thugs in retaliation for exposing its illegal accounting practices. In each case, I complained to the Securities and Exchange Commission. Eventually was forced to stop using those illegal accounting practices. It seems that is up to its old tricks again.

Executive summary

In the…

Is Medifast a Cry Baby or a Corporate Bully?

This is the way corporate bullying works. Last Monday, September 30, 2013, I reported that Medifast (NYSE: MED), its former CFO, and the engagement partner who supervised its audits for its former accounting firm agreed to the entry of separate Cease-and-Desist Orders by the Securities and Exchange Commission for various violations of securities laws. On Wednesday, October 2, 2013, I received a letter from its lawyers with the following barely veiled threat, “…The Company, is not adverse to taking decisive action to redress false accusations against its business.”


On September 19, 2013, Medifast (NYSE: MED) disclosed that on the previous day it consented to an entry of a Cease-and Desist Order and agreed to pay a $200,000 civil money penalty in connection with an "investigation" by the Securities and Exchange Commission into its improper financial reporting from 2006 to 2009. I reported that Medifast's press release and 8-K report made no mention that Brendan N…