Patrick Byrne: Armed, Dangerous, and Delusional

Update article: Overstock.com Hatchet Man Judd Bagley's Downward Spiral: Junkie, Confessed Criminal, Admitted Adulterer

Last Wednesday, Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne was arrested after Transportation Security Administration (TSA) officers found a loaded pistol concealed in his carry-on bag at an airport security checkpoint. He spent several hours in Salt Lake County jail before being released on bail. The company made no disclosure to investors, and news of Byrne's arrest was only disclosed on Friday in a TSA announcement.

Patrick Byrne Mug Shot

This was only the most recent of a series of bizarre incidents involving Patrick Byrne dating back to 2004, when Byrne blamed an unnamed "Sith Lord" for his company's problems, and when he made obscene and misogynistic comments to a female reporter. Rather than dismissing this as just another instance of Byrne behaving irresponsibly, the press, securities analysts, investors and other interested observers of the company should focus on the implications of this incident.

Did Overstock President Jonathan Johnson tell the truth in press statements issued shortly after the incident, and in light of Byrne's present and past behavior, is it appropriate for him to be allowed to carry a concealed firearm under Utah law? In the wake of the Newtown school massacre last month, more attention has focused on access to guns by mentally unbalanced people.

Excuses don’t add up

According to the Salt Lake Tribune, Overstock.com President Jonathan Johnson claimed that it was all a mistake:

"He has told me he regrets and apologizes for the incident," Johnson said. Byrne is a longtime concealed carry permit holder and is very careful and skilled with guns, but he was in a rush to get to the airport Wednesday night and mistakenly believed the weapon was safely in his home, not in a bag he hadn’t used in a while, Johnson said. [Emphasis added.]

Johnson’s excuse does not seem to add up. Back in February 2000, Byrne, who has a Ph. D. from Stanford University, had boasted to Fortune Magazine that he has a photographic memory:

He has a nearly photographic memory, which he is fond of demonstrating with what he calls his memory trick: If he studies a deck of cards for a couple of minutes, he can recite them back, one by one, in either direction. He can even recite the same list again six months later. [Emphasis added.]

On December 12, 2007, Patrick Byrne appeared on Utah Now and showed off his photographic memory. He asked interviewer Doug Fabrizio, "What is your birthday?" Fabrizio replied, "July 18." Within seconds, Byrne correctly told Fabrizio the exact day of the week he was born on: Saturday. Byrne further bragged, "When I was seven, I could memorize cards." [See transcript.]


The gun, a Glock 23 .40-caliber pistol, was loaded with a dozen .40-caliber rounds in the magazine. It was found in the “front pocket” of his carry-on bag. The gun is 7.28 inches in length, 4.99 inches in height, and 1.18 inches in width. It weighs 31.06 ounces (almost 2 pounds) fully loaded. It’s difficult to believe that Patrick Byrne didn’t know there was a loaded gun in the front pocket of his carry-on bag.

TSA Photo: Patrick Byrne's Gun and Ammmo seized at airport

Patrick Byrne’s ties with the right-wing extremists

Patrick Byrne is a decade's long friend of Bo Gritz. The Anti-Defamation League lists Bo Gritz as a far-right extremist with “extensive connections to both white supremacists and anti-government groups and leaders.” In 1988, former Ku Klux Klansman David Duke was the presidential candidate for the Populist Party. Bo Gritz agreed to join the ticket as the Populist Party’s vice presidential candidate, but later dropped out to run for congress.

In April 2012, Patrick Byrne appeared as a guest of Earnest Hancock’s on his Freedom’s Phoenix radio show. Three years earlier, in August 2009, TPM reported that:

Ernest Hancock, the online radio host who staged an interview with an assault rifle-wielding associate at the Obama event in Arizona yesterday — and was himself armed with a 9 millimeter pistol — was a vocal supporter and friend of right-wing anti-government militia members who were convicted of conspiracy and weapons charges in the 90s. [Emphasis added.]

Patrick Byrne's violent tantrums

Before joining Overstock.com, Patrick Byrne's well connected father helped him get as job as the CEO of Fechheimer Brothers. Fortune Magazine reported that "He once challenged union leaders to a fistfight to resolve a labor dispute." The Union of Needletrades, Industrial and Textile Employees (UNITE) sought to organize workers at a San Antonio plant. According to UNITE, "Until they began to organize, the company often did not provide toilet paper to its mostly Latina workers."

Patrick Byrne claims “photographic memory”

As I detailed above, in February 2000, Patrick Byrne bragged to Fortune Magazine that he has a “photographic memory.” In December 2007, he showed off his memory skills on Utah Now. On December 11, 2001, Overstock.com CEO Patrick Byrne appeared on Fox News claimed, “We're profitable.” On March 1, 2002, Business 2.0 Magazine reporter Owen Thomas asked, "Are you profitable? Patrick Byrne responded, "Yes, that's real GAAP profit, not Amazon-bullshit-accounting profit." On March 5, 2002, Overstock.com filed an S-1 report with the Securities and Exchange Commission in connection with its planned initial public offering. It contradicted Byrne’s claim that his company was anywhere near “profitable.” The company lost money in each and every quarter since its inception.

Did Patrick Byrne lie to Fortune Magazine when he claimed to have a photographic memory? Did Patrick Byrne and his interviewer Doug Fabrizio stage a fake a demonstration of Byrne's memory skills on Utah Now? Or did Patrick Byrne lie to Fox News or Business 2.0 when he claimed that Overstock.com was profitable when it was actually losing money? Maybe Byrne is delusional?

Byrne’s bizarre behavior escalates

Over the next several years, Overstock.com continued to lose money. Patrick Byrne's behavior grew more erratic as he lashed out at critics with vicious verbal assaults and in one case made obscene and misogynistic comments to a female reporter.

In 2004, independent research firm Camelback Research (now known as Gradient Analytics) gave Overstock.com an earnings quality grade of "F" and mentioned that a member of its board of directors served on WorldCom's board while it was embroiled in an accounting scandal. Byrne wrote an analyst from Camelback:

...you make a living toadying to bully hedge funds. In this role, you insulted Mr. Macklin, a friend, a lifelong mentor and a decent and wonderful man. You deserve to be whipped, f--cked and driven from the land. Little punctilious submissive rejoinders such as your letter cannot change this or recalibrate our relationship on other terms. You drew first blood: own it. [Emphasis added.]

In Fortune Magazine, Bethany McLean reported that:

In the fall of 2004, I wrote a FORTUNE story titled "Is Overstock the Next Amazon?" After the piece came out, Byrne sent me an e-mail saying "Fair. And balanced." Two days later he wrote another e-mail: "I actually thought it was crap.... So, why exactly did you become a reporter? Giving Goldman traders blowjobs didn't work out?" [Emphasis added.]

Byrne’s paranoid fantasies

On August 11, 2005, Patrick Byrne went into a long rambling rant about a vast criminal conspiracy involving a mastermind who he identified as the “Sith Lord” who was out to destroy his company. It was widely mocked as a paranoid fantasy. [See Transcript.]

Joe Nocera reported in the New York Times that:

...it was an hourlong monologue during which Mr. Byrne laid out a vast, overarching conspiracy, made up of dozens of Wall Street players -- including the New York attorney general, Eliot Spitzer! -- all under the thumb of a mysterious puppet master, whom Mr. Byrne labeled the Sith Lord. He titled the conspiracy ''The Miscreants' Ball,'' an obvious reference to Michael Milken's old Predators' Ball.

Although Mr. Byrne told me that his Sith Lord speech ranked among ''the 10 proudest moments of my life,'' most people, including me, thought it was loony beyond belief. Roddy Boyd of The New York Post recalled hearing about it from someone on Wall Street. ''When he described it, I thought he was embellishing,'' Mr. Boyd said. But when he listened to the replay, ''my jaw dropped -- you cannot make up what occurred on that phone call.''

In addition to his conspiracy-mongering, Mr. Byrne talked about Stinger missiles, Wayne and Garth, a mysterious Spanish phone message, stuttering and cocaine. (''I'm not a coke head,'' he said, unprompted.) [Emphasis added.]

NY Post Photo Mocking Byrne

Billionaire Mark Cuban said that "Patrick Byrne has emerged as the star of his own X-Files like drama" and added:

Never before in the history of Wall Street has a single conference call mentioned the following topics:

Miscreants, an unnamed Sith Lord he hopes the feds will bury under a prison, gay bath houses, whether he is gay, does cocaine, both or neither, and an obligatory, not that there is anything wrong with that, phone taps, phone lines misdirected to Mexico, arrested reporters, payoffs, conspiracies, crooks, egomaniacs, fools, paranoia, which newspapers are shills and for who, payoffs, money laundering, his Irish temper, false identities, threats, intimidation, and private investigators. All in 61 minutes.

Hedge fund manager Jeff Matthews told The Register that:

It was the most bizarre hour and change I have ever witnessed on the Street. [Emphasis added.]

In Fortune Magazine, Bethany McLean wrote:

Byrne's behavior has been so over the top that it would be tempting to dismiss it as a paranoid fantasy. Can you imagine the CEO of another company making a conference call like Byrne's without being sent packing by his directors? [Emphasis added.]

On August 29, 2005, Patrick Byrne, himself, did not dismiss concerns raised about his "whacko" behavior on Motley Fool:

I can COMPLETELY understand why some would look at my behavior and think it whacko: it is not as though the possibility never occurs to me before I do something weird.

Patrick Byrne's violent tantrum at the Utah State Legislature


In May 2007, Patrick Byrne went into a raging fit as the Utah legislature sought to repeal a certain law that was passed only a year earlier. Senator Bramble, the original sponsor of the legislation, now supported its repeal. New York Times columnist, Joe Nocera described Byrne's tirade:

Then, he became increasingly agitated, accusing Senator Bramble of betraying him. As his tone became more belligerent, and he began cursing, most of the others in the room, their jaws agape, simply listened to him rant. Several of them later told me they had never heard anything like it.

After the meeting, a confrontation broke out between Mr. Byrne and a securities industry lobbyist.

Chief Deputy Utah Attorney General Kirk Torgensen told me that "I saw him almost get into a fistfight... at the legislature." Byrne was seen cursing and screaming at legislators and lobbyists.

NAACP demands an apology from Byrne

In October 2007, Utah legislature was debating a referendum to provide vouchers for families sending kids to private schools. Apparently, Patrick Byrne believed that minority children who did not graduate from high school should be burned. During a debate, Patrick Byrne said:

Right now 40% of Utah minorities are not graduating high school. You may as well burn those kids. That's the end of their life in any signif... that's the end of their ability to achieve in this society. If they do not get a high school education, you just might as just throw the kids away. [Emphasis added.]

The NAACP demanded an apology, but Byrne refused.

When the state-wide voucher referendum was defeated, the Salt Lake Tribune reported that:

Voucher supporter Overstock.com chief executive Patrick Byrne - who bankrolled the voucher effort - called the referendum a "statewide IQ test" that Utahns failed. [Emphasis added.]

Many people in Utah were offended by Byrne's remarks. Chief Deputy Utah Attorney General Kirk Torgensen said:

He called us all a bunch of morons that didn’t care about kids….

Critics and their family members are stalked and threatened by Byrne’s operatives

Judd Bagley

In August 2006, Patrick Byrne hired Judd Bagley to run an anonymous blog called antisocialmedia.net. It was used a platform to smear critics of Overstock.com. In January 2007, New York Post reporter Roddy Boyd exposed Byrne and Bagley is being behind the anonymous website.

In April 2007, I was doing research on Bagley’s activities and visited his blog multiple times over a couple of days. Bagley used an anonymous alias "panamapump" to post a message on a Yahoo stock chat board detailing every time I visited the blog. He threatened me saying, “On behalf of your family and in the interest of your own employability I ask you to please never visit ASM again. I'll email you new articles when they come out.” Later, as I uncovered accounting irregularities at Overstock.com, Bagley made good on his threat.

In February 2009, I identified certain violations of Generally Accepted Accounting Principles (GAAP) by Overstock.com that allowed it to fabricate a Q4 2008 profit rather than properly report a loss in that quarter. I urged the company to restate its financial reports to correct its improper accounting practices. CEO Patrick Byrne retaliated by personally attacking me on a stock market chat board, during various earnings calls, and in the press in an effort to discredit me. Instead of properly complying with GAAP, Overstock.com continued to overstate income in Q1, Q2, and Q3 2009.

Byrne's hired thug Bagley even injected himself into my divorce proceedings, contacting my former spouse, as well as using illegal pretexting tactics to "friend" my children and relatives on Facebook using a phony account. This was clear retaliation for my pointing out the company's accounting violations.

According to journalist and author Gary Weiss who uncovered the pretexting:

Bagley created "Larry Bergman" and an unknown number of phony Facebook accounts to con people into "friending" him. That way he could circumvent Facebook security, violating their rules and, well, Lord knows how many laws he broke in this pretexting scheme.

Attorney and Big Picture blogger (over 1.5 million monthly readers) Barry Rithholtz called Judd Bagley a "possible pedarast" after learning that he and his family members were pretexted. Eventually, Facebook (NASDAQ: FB) booted Bagley for violating its rules. It deleted both his false "Larry Bergman" profile and his personal profile.

Judd Bagley claimed that Overstock's internet pretexting scheme was designed to unveil connections between hedge funds and the journalists who write about them. However, Bagley targeted only journalists and bloggers (and their friends and family members thereof) who had written about Overstock. Altogether he compiled a database containing personal information on over 7,400 people.

In September 2009, the Securities and Exchange Commission started an investigation of Overstock.com’s accounting practices. In March 2010, Overstock.com finally admitted that it violated GAAP and restated its financial reports to correct its accounting violations, as I had recommended over a year earlier.

It was the third time since 2006 that Overstock.com had to restate its financial reports to correct violations of accounting rules. Every single financial report issued by Overstock.com from 1998 to 2009 was initially wrong and had to be corrected up to three times.

It will be interesting to see whether Patrick Byrne receives equal justice in the Utah courts, or is let off in deference to his wealth and heavy campaign contributions to the Utah Republican Party.

Written by,

Sam E. Antar

Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could. If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities. More recently, I've helped the AICPA Fraud Task Force develop better methods for detecting fraud. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.

I do not own any Overstock.com securities long or short.

What is Mark Mitchell Hiding About Himself, Deep Capture, and Overstock.com?

Mark Mitchell, a washed up former journalist who is now a paid shill for Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne's private vendetta web site called "Deep Capture" is afraid to answer my questions.

For example, Tracy Coenen and I heard that Mark Mitchell was escorted from the building when he left his former employer, Columbia Journalism Review. According to Tracy Coenen’s blog:

This is also a good time to mention that the guy "from the Columbia Journalism Review" is apparently Mark Mitchell, Byrne's paid shill. According to a confidential source, Mitchell was escorted from CJR under mysterious circumstances.

Meanwhile, Patrick Byrne has taken steps to separate his Deep Capture smear web site from Overstock.com while admitting that he founded it. According to the Deep Capture web site:

Deep Capture is not part of Overstock….

However, the Deep Capture web site goes on to direct the reader to click on a link (http://www.overstock.com/?TID=deepcapture) to purchase merchandise at Overstock.com and 5% of the purchase goes to support Deep Capture.

According to Gary Weiss, Patrick Byrne has taken pains to cover up his ownership of Deep Capture. As of April 20, 2008, High Plains Investments LLC, owned by Patrick Byrne and a major shareholder of Overstock.com shares, was listed as the manager of Deep Capture LLC. By June 19, 2008, Judd Bagley, a former spokesperson for Overstock.com, and Evren Karpak, another former Overstock.com employee replaced High Plains Investments LLC as managers of Deep Capture LLC.

Judd Bagley is a nauseating cyber stalker who as an Overstock.com employee, originally set up an anonymous web site called antisocialmedia.net to stalk, intimidate, harass, smear, and blackmail critics of Patrick Byrne. In January 2007, New York Post reporter Roddy Boyd exposed Judd Bagley as the person behind the anonymous antisocialmedia.net web site. Bagley continues to run that web site and further stalk, intimidate, harass, smear, and blackmail critics of Patrick Byrne using anonymous aliases on internet message boards.

Evren Karpak is an internet message board troll hired by Patrick Byrne to work at Overstock.com after stalking, intimidating, harassing, smearing, and blackmailing Byrne's critics, like Bagley. Both Karpak and Bagley recently claim to have left Overstock.com and they are now paid shills for Patrick Byrne at Deep Capture with Mark Mitchell.

Originally, Mark Mitchell, like Judd Bagley, tried to hide his cyber stalking connection with Byrne. Gary Weiss caught Mark Mitchell pretexting (not disclosing his employment by Byrne) and lying about what Weiss said to him.

Mark Mitchell was heavily criticized for naivete and poor performance when he was a CJR editor, and violated journalism ethics by signing a letter from an anti-naked shorting organization while employed by CJR and researching an article on that subject. Mitchell has not denied that he is the "Mark Mitchell" listed as a signatory of that letter.

In a post on the Yahoo message board, I asked Mark Mitchell about him being escorted from the building. He emailed me the following:

From: Mark Mitchell [mailto:mitch0033@gmail.com]
Sent: Friday, July 25, 2008 4:58 PM
To: Sam E. Antar
Subject: Questions

Mr. Antar,

You asked me this question: "Have you ever been forcefully escorted out of any building as a result of your behavior?"

Would you care to explain how you came to ask this very specific question? Do you have information about any instance of my being subjected to force or violence? If so, what is the source of your information?

Mark Mitchell

This is obviously a sore subject for him. I responded:

From: Sam E. Antar
Sent: Friday, July 25, 2008 6:18 PM
To: Mark Mitchell
Subject: RE: Questions

To Mark Mitchell:

I'm asking the questions, not you.
Do you admit or deny it? Yes or no.

Sam E. Antar

Mark Mitchell's strange response asked me whether I have information about a mugging in which he was supposedly a victim.

Having not received any response from Mark Mitchell specifically denying that he had been escorted out of Columbia Journalism Review's office, I decided to ask him questions about Deep Capture and its relationship to Overstock.com and Patrick Byrne.

For example, Item 404, "Transactions with Related Persons, Promoters and Certain Control Persons" of Securities and Exchange Commission Regulation S-K requires disclosures of certain related party transactions and I was attempting to determine why Overstock.com has not made any disclosures relating to Deep Capture. In addition, I wanted Mark Mitchell's opinion about Judd Bagley's cyber stalking for Patrick Byrne and Overstock.com's continuing violations of SEC Regulation G. See my email below:

From: Sam E. Antar
Sent: Saturday, July 26, 2008 12:54 PM
To: mitch0033@gmail.com
Subject: Additional Questions

To Mark Mitchell:

Please answer each question separately and provide complete and unambiguous details:

• Who are the current and past owners of DeepCapture?
• Who are the current and past executives and managers of DeepCapture?
• Who are the current and past employees of DeepCapture?
• What is Overstock.com CEO Patrick Byrne's affiliation with DeepCapture?
• Does your employment for DeepCapture include posting messages on internet web sites such as Yahoo or InvestorVillage?
• What is DeepCapture's relationship with Overstock.com, High Plains Investments LLC, Haverford-Valley, L.C., and or any entity affiliated with Patrick Byrne?
• How much compensation is DeepCapture paying you?
• How is your compensation structured at DeepCapture?
• Have you ever received direct or indirect compensation from Patrick Byrne, Overstock.com, High Plains Investments LLC, Haverford-Valley, L.C., and or any entity affiliated with Patrick Byrne?
• Before your employment at DeepCapture did you ever receive any compensation or gifts from Patrick Byrne, Overstock.com, High Plains Investments LLC, Haverford-Valley, L.C., and or any entity affiliated with Patrick Byrne?
• Who hired you to work at DeepCapture?
• How often do you communicate with Overstock.com CEO Patrick Byrne?
• Please name each person who has a current or past role in setting editorial policy for DeepCapture?
• Who indemnifies you for the content of your stories on DeepCapture?
• Have you ever discussed the contents of any story published on DeepCapture with Patrick Byrne?
• Has Overstock.com CEO Patrick Byrne ever instructed you to write any story on DeepCapture?
• Have you ever posted messages on any internet chat sites, message boards, blogs, or other internet sites using an anonymous alias?
• If the answer to the above question is yes, please provide details of each and every posted message including the name of the web site?
• Please provide all aliases that you may have used on the internet?
• What is your opinion of your colleague Judd Bagley's spying on and stalking of critics?
• Do you believe that CEOs should obsess about their critics?
• Do you believe that CEOs should stalk, intimidate, harass, and/or smear their critics either directly or indirectly through proxies such as Judd Bagley?
• Do you consider yourself to be a proxy for Patrick Byrne's agendas?
• What is your opinion of Overstock.com's continued violations of Securities and Exchange Commission Regulation G?
• What is your opinion of Overstock.com's overstatements of EBITDA in violation of Securities and Exchange Commission Regulation G by improperly not reconciling EBITDA to net income and improperly removing stock-based compensation expenses from EBITDA?

Please note that any references to Patrick Byrne above is specifically intended to mean Patrick Byrne (CEO of Overstock.com) and any references to DeepCapture is intended to mean Deep Capture LLC and/or DeepCapture.com.

Regards,

Sam E. Antar

Mark Mitchell has not responded. What is he hiding?

To be continued....

Written by:

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

Update (New Email from Mark Mitchell):

From: Mark Mitchell [mailto:mitch0033@gmail.com]
Sent: Monday, July 28, 2008 11:40 PM
To: Sam E. Antar
Subject: request correction

Dear Sam,

Your blog is false. You know very well that I was not "escorted" from the Columbia Journalism Review.

Please post a correction.

Thank you,

Mark Mitchell

My public response:

To Mark Mitchell:

I was simply reporting what I heard, unlike you who reports what he has not heard. I see no reason to change the specific item you are referring to.
Respectfully,

Sam E. Antar (White Collar Fraud Blog Reporter)

Note: Read Gary Weiss's latest blog post on Mark Mitchell.

Disclosure: Not long or short Overstock.com

Additional Information: For additional up to date coverage of Overstock.com, please read Tracy Coenen.

The SEC stands by while Overstock.com continues to violate Regulation G and overstates EBITDA in latest report

Before we begin let's review some of Overstock.com's history of false and misleading disclosures

Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne likes to call himself a “humble servant” to his company's shareholders and a “market reform advocate” to the investing public, while he and his company have a documented long history of false and misleading disclosures and utterly despicable behavior such as stalking and smearing critics with its in-house black ops team. As previously detailed in this blog, from December 2000 to March 2002, Patrick Byrne had lied about Overstock.com being profitable when the company was never profitable at that time.

Overstock.com’s unprincipled management team intentionally violated GAAP in reporting revenues from at least fiscal year 2000 until the SEC Division of Corporation Finance recently forced the company to report revenues in compliance with GAAP. To make matters worse, the company misled the SEC Division of Corporation Finance about the materiality of its revenue accounting errors and therefore violated Statement of Accounting Standards No. 154 by not restating prior period financial statements to correct its revenue accounting errors. In fact, Overstock.com has had only two profitable quarters (Q4 2002 and Q4 2004) in its entire history. At least one of those quarters earnings were materially overstated as a result of Overstock.com's intentional revenue accounting errors that were uncovered by the SEC. To make matters even far worse, as detailed many times in this blog dating back to November 2007, when it comes to non-GAAP disclosures, Overstock.com has continually violated SEC Regulation G and overstated EBITDA in its financial reports filed with the SEC from Q2 2007 forward.

Apparently, Patrick Byrne and his management team feel that they can make their own accounting and SEC disclosure rules on the fly - GAAP and SEC disclosure requirements be damned. In the mean time, the SEC sits by idly while Overstock.com distorts its financial performance to investors.
Overstock.com’s continued material violations of SEC Regulation G governing non-GAAP disclosures such as EBITDA causes it to turn a negative EBITDA to a positive EBITDA
It is incomprehensible that the SEC has so far failed to take any action against Overstock.com for violations of Regulation G, despite being continually informed by this blogger, its recently terminated investigation of the company, and also taking actions against other similarly non-compliant companies to force them to correct such violations.

In Overstock.com’s latest Q2 2008 earnings report, the company improperly reported EBITDA of $1.117 million in violation of SEC Regulation G. Overstock.com’s reported non-compliant EBITDA was overstated by $1.545 million as a result of the company improperly removing from its EBITDA calculations the effects of certain stock-based compensation expenses and improperly reconciling EBITDA to operating loss rather than net loss, in violation of SEC Regulation G. Therefore, had Overstock.com properly reported EBITDA in compliance with SEC Regulation G, the company would have reported a negative EBITDA of $428,000 instead of its non-compliant positive EBITDA of $1.117 million.

The sheer size of Overstock.com’s overstatement of EBITDA is clearly a material accounting error as defined by SEC Staff Accounting Bulletin No. 99. Overstock.com’s overstatement of EBITDA in violation of SEC Regulation G flips a properly calculated negative EBITDA of $428,000 into an improperly reported positive EBITDA of $1.117 million. According the SAB No. 99, one of the main considerations in determining if an accounting error is material is, “whether the misstatement changes a loss into income or vice versa.” Here with Overstock.com, we have a clearly material violation of SEC Regulation G in the company's Form 8-K filed with the Securities and Exchange Commission. See the charts below (Click on image to enlarge):

SEC Regulation G defines EBITDA specifically as "earnings before interest, taxes, depreciation, and amortization" but Overstock.com makes up its own EBITDA and violates SEC rules

During the Q2 2008 earnings call, the following exchange took place between CEO Patrick Byrne and CFO David K. Chidester:

Patrick Byrne: Great. Slide number 10. EBITDA and this excludes stock based compensation. Do you want to mention that Dave? Do you want to – ?

David Chidester: Just – there is different ways people calculate EBITDA I think. We just want to make sure it’s clear that our calculation of EBITDA does [ph] include stock based compensation.

Patrick Byrne: Is that the convention?

David Chidester: (inaudible) It’s completely the convention in our industry and I think because it’s a new – it only came about a couple of years ago, everybody pretty much excludes it when they talk about EBITDA and talk about cash earnings.

What David Chidester said is that he thinks Overstock.com can compute EBITDA by eliminating stock-based compensation expenses from its computation and as a result of such a false claim by him, the company reported a materially overstated EBITDA in violation of SEC Regulation G. He further claims that removing stock-based compensation from EBITDA is "completely the convention in our industry." David Chidester's claims about Overstock.com's EBITDA disclosures are flat out false and as the CFO of a public company, he cannot claim ignorance to SEC Regulation G. That "everyone else is doing it" excuse was previously used by both David Chidester and Patrick Byrne as justification for the company's intentional revenue accounting errors uncovered by the SEC. However, SEC Staff Accounting Bulletin No. 99 specifically states that "Authoritative literature takes precedence over industry practice...."

In this case, Overstock.com improperly removed stock-based compensation expenses to flip a properly calculated negative EBITDA in compliance with Regulation G into an improperly reported positive EBITDA. In fact, for public companies the SEC provides specific rules for calculating EBITDA under SEC Regulation G. Overstock.com clearly cannot exclude stock-based compensation expenses from EBITDA.

According to the SEC Division of Corporation Finance Regulation G guidance provided by their "Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures" EBITDA refers specifically to “earning before interest, taxes, depreciation and amortization." See below:

Question 14: Section I of the adopting release describes EBIT as "earnings before interest and taxes" and EBITDA as "earnings before interest, taxes, depreciation and amortization." What GAAP measure is intended by the term "earnings"? May measures other than those intended by the description in the release be characterized as "EBIT" or "EBITDA"? Does the exception for EBIT and EBITDA from the prohibition in Item 10(e) (1) (ii) (A) of Regulation S-K apply to these other measures?
Answer 14: "Earnings" is intended to mean net income as presented in the statement of operations under GAAP. Measures that are calculated differently than those described as EBIT and EBITDA in the adopting release should not be characterized as "EBIT" or "EBIDTA." Instead, the titles of these measures should clearly identify the earnings measure being used and all adjustments. These measures are not exempt from the prohibition in Item 10(e) (1) (ii) (A) of Regulation S-K. [Emphasis added]

Therefore, the intended meaning of “earnings” for EBITDA under Regulation G is “net income as presented in the statement of operations under GAAP.” EBITDA can only be computed as earnings (meaning net income or loss) before interest, taxes, depreciation, and amortization and the SEC requires that “measures that are calculated differently than those described as…EBITDA in the adopting release [Regulation G] should not be characterized as EBITDA.” Net income, not operating income as used by Overstock.com, is the starting point towards computing EBITDA and stock-based compensation expenses cannot be excluded from EBITDA according to SEC Regulation G.

David Chidester’s above comments about Overstock.com's EBITDA disclosures are flat out false! On May 13, David K. Chidester, Senior Vice President – Finance sold 2,766 shares at an average price of about $27.83 per share of and pocketed gross proceeds totaling about $77,000. After Overstock.com’s Q1 2008 earnings call, the company’s stock price plunged 41.12% or $11.31 to close at just $16.31 per share. As David Chidester cashes out, Overstock.com shareholders are bearing the losses.

The SEC has taken action against other non-compliant companies violating Regulation G but has utterly failed to take action against Overstock.com for similar violations

In a previous blog post, I detailed how CGG Veritas, like Overstock.com, improperly removed stock-based compensation expense from its reported EBITDA in violation of SEC Regulation G. The SEC Division of Corporation Finance informed CGG Veritas that:

The acronym EBITDA refers specifically to earning before interest, tax, depreciation and amortization. However, your measure also adjusts earnings for stock option expense. We will not object to your using such a measure as a liquidity measure but request that you rename it to avoid investor confusion. [Emphasis added.]

As a result of the SEC’s review, CGG Veritas changed its non-compliant EBITDA measure to EBITDAS or earnings before interest, taxes, depreciation, amortization, and stock-based compensation. CGG Veritas responded to the SEC that, "we will in future filings refer to the non-GAAP measure in question as 'EBITDAS' which we will define as 'earnings before interest, tax, depreciation, amortization and share-based compensation cost' ….”

As detailed above, Overstock.com, just like CGG Veritas, improperly removed the effects of stock-based compensation expenses from its non-compliant EBITDA disclosures in violation of Regulation G. Yet the SEC has continued to fail to take action against Overstock.com to correct such non-compliant EBITDA disclosures despite being directly informed by this blogger.

In that same blog post, I detailed how CKX Inc, like Overstock.com, improperly reconciled its non-compliant EBITDA to operating income or loss rather than net income. The SEC notified CKX Inc.:

Reference is made to your presentation of the non-GAAP financial measure, EBITDA, in the table of your historical and pro forma financial information for the year ended December 31, 2004. We note that you define EBITDA as income or loss from continuing operations before interest expense, income tax expense (benefit), depreciation and amortization, and consider it to be an important supplemental measure of your operating performance which is used by management to evaluate the performance of the Company. However, it appears your definition of EBITDA does not comply with the guidance set forth in Question 14 of the “Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures.” Question 14 states that the term “earnings” is intended to mean net income as presented in the statement of operations under GAAP and further, measures that are calculated differently than those described as EBIT or EBITDA should not be characterized as “EBIT” or “EBITDA.” In this regard, please revise your calculation of EBITDA such that it is computed as net income (loss) (rather than income or loss from continuing operations) before interest expense, income tax expense (benefit), depreciation and amortization. Alternatively, if you believe your current presentation of your non-GAAP measure is appropriate, but has been characterized inappropriately as EBITDA, revise your presentation and supplementally tell us in detail how it complies with FR-65. [Emphasis added.]

The SEC told CKX Inc. that its non-compliant EBITDA must be computed by revising their "calculation of EBITDA such that it is computed as net income (loss) (rather than income or loss from continuing operations) before interest expense, income tax expense (benefit), depreciation and amortization." Any other calculation cannot be called EBITDA. However, Overstock.com, just like CKX Inc., improperly reconciled its non-compliant EBITDA to operating income or loss rather than net income or loss and the SEC has utterly failed to take action against Overstock.com to correct its non-compliant EBITDA disclosures despite being notified by this blogger.
CKX responded to the SEC:

The Registrant has revised its presentation in the Summary Historical and Pro Forma Financial Data to include operating income before depreciation and amortization ("OIBDA"). All references to EBITDA have been removed. The Registrant has revised its disclosures to reconcile OIBDA to operating income which is the most directly comparable financial measure calculated and presented in accordance with GAAP. [Emphasis added.]

Therefore, CKX renamed its non-compliant EBITDA disclosure as OIBDA or operating income or loss before depreciation and amortization and the company was able to remove losses from discontinued operations from its non-GAAP financial measure.

What is the appropriate term for Overstock.com’s non-compliant EBITDA financial measure?

Overstock.com, like CKX, improperly used operating income or loss as the starting point to compute its non-compliant EBITDA calculation. In addition, Overstock.com, like CGG Veritas, improperly removed stock-based compensation expenses from its non-compliant EBITDA calculation. Perhaps Overstock.com's non-compliant EBITDA should be renamed OIBDAS or operating income or loss before depreciation, amortization, and stock-based compensation expense. Note: Overstock.com does not have income tax expenses due to its losses. However, this blogger has directly notified Overstock.com Audit Committee member Joseph J. Tabacco Jr. of the company's non-compliant EBITDA disclosures and the company has failed, just like the SEC, to address its EBITDA reporting errors.

What’s going on at the SEC?

I am beginning to believe that our present SEC is not of the same caliber that I feared as the criminal CFO of Crazy Eddie in the 1980s. They are overwhelmed and under-resourced. Instead, they using their highly taxed resources to chase delusional conspiracy theories such as those blaming short sellers on problems related to the subprime crises effecting Fannie Mae and Freddie Mac. I suggest that you read Joe Nocera's blog post entitled, "First, Let's Kill All Short-Sellers." Perhaps that explains why companies like Overstock.com can thumb their noses at SEC rules while the SEC drops investigations of such companies.

As detailed above, Overstock.com's stock price on Friday 41.12% or $11.31 to close at just $16.31 per share after the company's misleading earnings release. Eric Savitz, in the Barron's Tech Trader Daily blog noted:

Stifel Nicolaus analyst Scott Devitt this morning cut his rating on Overstock.com (OSTK) to Sell from Hold. He notes that the company, which reported Q2 financial results this morning, trades for 21×2009 EBITA, “the highest multiple in the sector.”
Devitt says the company has had two consecutive quarters of mid-20% growth, but that it has had “fairly easy comps,” and that growth could drop into the low-to-mid teens by 2009. [Emphasis added.] 

However, Gary Weiss noted in his blog that:

Sam [Antar] has specifically warned that Overstock was distorting the "growth" numbers reported to the public. He set forth his case in exhaustive detail. But analysts and the clowns at the SEC -- who just gave Overstock's accounting a clean bill of health -- paid no attention. [Emphasis added.]

Acclaimed forensic accountant, author, and blogger Tracy Coenen asked:

I keep wondering why Pricewaterhouse Coopers doesn’t catch this material error in calculating a figure that is heavily touted in reports to investors. Rumor has it that they review the quarterly reports, but this makes me wonder. [Emphasis added.]

The tragedy of American capitalism is that most investors rely on incompetent or at the very least lazy and spineless Wall Street analysts for research and inadequately trained but similarly spineless auditors to make sure financial reports are free of material errors. This tragedy is further compounded by an overwhelmed and under-resourced SEC chasing delusional conspiracy theories touted by company managements who are unwilling to take responsibility for their misdeeds.

To be continued….

Written by:

Sam E. Antar (former Crazy Eddie and a convicted felon)

Disclosure: Not long or short Overstock.com, CGG Veritas, and CKX. Inc.

Who is Judd Bagley trying to fool about the use of anti-Semitism to attack critics of his boss, Overstock.com CEO Patrick Byrne?

As a criminal, my cousin Eddie Antar understood the value of getting other people to do his dirty work. Such persons would satisfy his criminal agenda while creating a wall between him and those persons that carried out his evil criminal deeds.

In other posts on this blog*, I have detailed how Patrick Byrne (CEO of Overstock.com) uses his Director of Communications, Judd Bagley, to carry out his personal vendettas against critics and journalists on the antisocialmedia.net smear web site administered by Bagley. I detailed how Patrick Byrne attempts to build a wall of separation between him and Judd Bagley’s activities on the antisocialmedia.net.

*Note:

Don't Mess with Overstock.com CEO Patrick Byrne

The Deceptions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Social Media at Overstock.com)

Issues related to Overstock.com's Code of Business Conduct and Ethics

Judd Bagley seems to believe he is running a no holds barred political campaign to further Patrick Byrne’s interests. It appears that Patrick Byrne does not care about his obligations to abide by Overstock.com’s Code of Business Conduct and Ethics. He refuses to reign in his henchman, Judd Bagley and endorses his actions. The Audit Committee of Overstock.com which includes Allison H. Abraham, Clay Corbus, and now Joseph J. Tabacco Jr. must make serious choices and fulfill their legal obligations as Board members.

As outlined in a my blog post entitled, “Open Letter to the Audit Committee of Overstock.com: The Company’s Code of Business Conduct and Ethics and actions of Patrick Byrne and others,” any further inaction by Overstock.com's Board of Directors may be considered a tacit approval of Patrick Byrne’s and Judd Bagley’s activities. Such a tacit approval may require disclosure as an “implicit waiver” from Overstock.com's Code of Business Conduct and Ethics. Implicit waivers to the company’s Code of Business Conduct and Ethics must be disclosed to the Securities and Exchange Commission on Form 8–K. I have put the Board of Directors of Overstock.com on notice as to possible serious breaches of Overstock.com's Code of Business Ethics.

Judd Bagley uses a proxy to carry out Patrick Byrne's smear campaign

In this blog post, I will detail how Judd Bagley uses Edward Manfredonia as a proxy to intimidate critics of Patrick Byrne with vile and malicious smears and anti-Semitism. Like Judd Bagley does Patrick Byrne's dirty work, it appears that Judd Bagley has found Edward Manfredonia to do his dirty work.

Patrick Byrne, Judd Bagley, and Edward Manfredonia share the same paranoid fantasies, delusions, and repulsive anti-Semitism. In addition, they share the same irrational hatred of investigative reporter and blogger Gary Weiss.

Judd Bagley controls what comments get posted to blog items on antisocialmedia.net

The purpose of antisocialmedia.net is to carry out a smear campaign against critics of Overstock.com's CEO, Patrick Byrne. Antisocialmedia.net is not a free flowing forum of ideas which includes all appropriate opinions pro or con to Patrick Byrne. Judd Bagley can pick and choose which person's comments to publish or delete from antisocialmedia.net to further the agenda of Patrick Byrne.

For example, on December 5, 2006, in a post (message number 2653) on InvestorVillage.com (since deleted by Investor Village, but re-created on the O-Smear blog), Judd Bagley using his old alias AntiSocialMedia wrote a response to a post (message number 2653) by Scipio Africanus:

And for a brief moment I thought you really were defending Weiss out of some sort of principle. Now I see you're just another one of the barely-unemployable paid bashers, waiting for the next gig. And that's fine, now that we know you have nothing of any value to contribute here, we can safely ignore you, which is what I strongly encourage this board's sincere readers to do.

I'm also now reminded of the reasons you were banned from commenting on antisocialmedia.net the first time, and happily reinstate that ban. As was said before, as long as you're on the payroll, you can afford to go start your own blog and ban all of us. [ Emphasis added.]

Judd Bagley permits paranoid fantasies, false accusations, physical threats, and anti-Semitic comments directed at critics of his boss, Patrick Byrne, to be posted on antisocialmedia.net

In my previous blog post entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” I notified the Audit Committee about the use of anti-Semitic comments on antisocialmedia.net.

In another blog post entitled, "Memo to Judd Bagley: Director of Communications at Overstock.com - About Threats on AntiSocialMedia.net," I showed that Judd Bagley permits malicious threats of economic harm and physical violence to be leveled at Gary Weiss.

Judd Bagley's posted a response to my criticism on antisocialmedia.net which was filled with deception, innuendo, deflection, insensitivity, and arrogance.

We have to wonder who Judd Bagley is trying to fool. We have to wonder if Patrick Byrne really believes he can fool us, too.

The enemy of my enemy is my friend

Patrick Byrne's likes to describe his so-called activities against naked shorting as a "Jihad." There is an Arabian saying, "The enemy of my enemy is my friend."

One particular target of Patrick Byrne’s vendetta against journalists and critics has been investigative reporter and blogger, Gary Weiss. Mr. Weiss has been exposing the unethical conduct, vile and malicious smears, and possible securities law violations by Patrick Byrne and Judd Bagley.

Patrick Byrne and Judd Bagley clearly consider Gary Weiss as an enemy. Patrick Byrne has called Gary Weiss, "evil." Judd Bagley once wrote, "Weiss is evil. I'll stand by that. More than evil, he's soul-less evil.” Edward Manfredonia has said that, "Weiss is evil made flesh." Judd Bagley has apparently found an enemy of Gary Weiss that he considers being a friend of his. The enemy of Gary Weiss and apparent friend of Judd Bagley is Edward Manfredonia.

Edward Manfredonia’s vile and irrational hatred of Gary Weiss and everyone he believes is some how connected to him

For Judd Bagley, Edward Manfredonia seems to be the perfect proxy to wage his war on certain critics. In many ways, Edward Manfredonia's irrational and twisted thoughts are compatible with the views of Judd Bagley' boss, Patrick Byrne.

If you read Edward Manfredonia’s web site, his posted comments on internet message boards (many now deleted), and his posted comments on other blogs you can see his vile and irrational hatred of anything to do with Gary Weiss and with many of those persons he considers connected in some remote way with Weiss.

Gary Weiss had written a Business Week article entitled, “The Amex is Starting to Feel the Heat” which was sympathetic to Edward Manfredonia. However, In Mr. Manfredonia’s twisted and irrational mind, some how Gary Weiss is an evil villain.

In 2005, Manfredonia, representing himself, filed a rambling, 51 page lawsuit against Gary Weiss, Business Week editor in chief Stephen B. Shepard, McGraw Hill chairman Harold McGraw, Robert Pritchard, McGraw Hill Vice President for Global Security and the City of New York. The suit was prompted by a criminal harassment complaint that Mr. Weiss had filed against Mr. Manfredonia, with the assistance of the McGraw Hill security.

Edward Manfredonia's lawsuit was filled with vile anti-Semitic statements. Mr. Manfredonia's law suit against Gary Weiss was later tossed out by Judge Michael D. Stallman. Since then, Edward Manfredonia has made anti-Semitic comments about Judge Stallman.

Edward Manfredonia’s writings show his irrational hatred of Jews, too. Patrick Byrne and Edward Manfredonia seem to share similar paranoid fantasies about Italian, Russian, and Israeli or Jewish criminal groups as being behind almost every door. Patrick Byrne, Judd Bagley, and Edward Manfredonia seem like they are joined at the hip.

Other blogs such as Jeff Matthews and the Stalwart have detailed Patrick Byrne's disturbing comments about Jews.

Let's examine the timeline.

Note: I did not use grammar check or spell check when quoting people.

Patrick Byrne and his conspiracy of the Jews

In a post on Motley Fool, Patrick Byrne viciously carried out his smear campaign against Herb Greenberg (CNBC, Wall Street Journal, and MarketWatch.com), Jim Cramer (TheStreet.com, CNBC), David Rocker (Rocker Partners), and Thomas Friedman (New York Times). According to Jeff Matthews, one common element is that those attacked by Byrne in this post are all Jewish.

On December 7, 2005, Patrick Byrne wrote the following post in Motley Fool:

Dear Fools,

For those of you who don't know, Herb Greenberg is a crooked reporter who formerly worked at thestreet.com, then moved to MarketWatch, where he makes a living doing hatchet jobs on whatever companies David Rocker is short.

Sometimes for variety he goes on Mad Money with Jim Cramer (founder of thestreet.com), and together they do hatchet jobs on companies David Rocker is short. (Did I mention that Rocker has been the #1 or #2 owner in thestreet.com, owning as much as 15% of thestreet.com through various on-shore and off-shore entities, such as Helmsman and Compass Holdings ...?)

Cramer and Greenberg's hatchet jobs take an unusual form. They resemble Thomas Friedman's write-ups on the Arab-Israeli conflict: "Let's see, Arabs, Israel, Arabs... Israel, Arabs........ Israel...... okay, I gotta call this one for the Israeli's." In op-ed after op-ed.

Similarly, when Greenberg adn [sic] Cramer attack me together, it generally takes the form of Cramer saying, "Byrne might be a good guy," Greenberg saying something like, "No no, he's a bad guy," "Are you sure? 'Cause I thought he might be a good guy..." "Oh no, he's definitely a bad guy." "Well...OK OK, he's a bad guy."

Oh, did I mention that Cramer founded thestreet.com, Greenberg cut his teeth there, and Rocker has been the most significant owner outside of Cramer himself?

Anyway.... Herb came to his end of year piece on worst CEO's of the year. I think he must have written a couple dozen on me in the last two years, but I did not mind, except for the creepy ones (complaining about how I don't always answer his email promptly? Geeesh: he reminded me of a scorned woman.)

And yet,after all this love, he left me out. I did not even the [sic] make the #1 spot here! I'm hurt. Of course, maybe he is getting some legal advice at the moment that explains his ducking his pat writings now....

Best,

Patrick [Emphasis added.]

Jeff Matthews, in a blog post entitled, "Weekend Reading: Conspiracy of the Jews?" commented about Patrick Byrne's tirade on Motley Fool:

...Byrne obsesses about Herb the way Nixon obsessed about Woodward and Bernstein. (For the record, Herb Greenberg is no more a “crooked reporter” than Patrick Byrne's father, legendary insurance ace Jack Byrne, was a crooked CEO.)

But it’s the apparent anti-Semitism that makes me wonder whether this is a legitimate post.

For mid-way through it, Byrne’s rant makes a bizarre and gratuitous jab at the supposed pro-Israel bias of the New York Times' excellent and highly respected Middle East reporter, Thomas L. Friedman.

I can think of no clear reason for making the analogy to Friedman and Israel except one: the enemies cited in the post (Herb Greenberg, David Rocker and Jim Cramer) are all Jewish.

Even for the CEO of Overstock.com, hints of a Jewish conspiracy would represent a rather disturbing twist in the ongoing saga. [Emphasis added.]

Note: Patrick Byrne has since confirmed the authenticity of his remarks on Motley Fool.

The Stalwart in a blog post entitled "The Paranoia of Patrick Byrne," wrote:

Now, as Jeff Matthews points out as well, it's not a stretch to read an anti-Semitic tone into the letter. Not only does he finger all Jews in his conspiracy, but he, out of nowhere, throws in a jab at Thomas Friedman's uevenhandedness in covering Middle-East affairs.

Patrick Byrne says “Every rabbit hole you go down leads to either [sic] the Italian mob, the Russian mob or the Israeli mob...."

On December 16, 2005, Patrick Byrne was interviewed on the Christian Radio Network. According to Jeff Matthews in a blog post entitled “Conspiracy of the Jews? – Part II," wrote:

In the midst of the usual paranoid-sounding diatribe against the so-called naked short-selling scandal, Byrne is encouraged to get specific about the root causes of the problem. The host asks:

“Are we dealing with the traditional old-boy network or has organized crime gotten involved?”

To this, Patrick Byrne says the following, and I quote him:

“Every rabbit hole you go down leads to either [sic] the Italian mob, the Russian mob or the Israeli mob, and nobody's ever asked about that, and I haven't pressed the issue…but every rabbit hole you go down you end up in one of those three places….

“The Israeli mob and the Russian mob are the two ones [sic] who scare me.”

In April 2006, Patrick Byrne argued with and irritated readers on an Israel message board (Israpundit). Gary Weiss commented:

Byrne went berserk, posting entire an entire off-topic article, insulting the board members and generally making a damn fool of himself. It seemed at the time, and now, to be a particularly nutty way of interacting with potential customers.

Note too that in a one-week exchange of messages, Byrne never denounced the anti-Semites among his followers, or apologize for their rhetoric. Instead he maintained they were agents of the opposition, and devoted his energies instead to attacking the people who had brought the anti-Semitism to his attention. [Emphasis added.]

Judd Bagley expresses interest in Edward Manfredonia’s irrational hatred of Gary Weiss and Jews

In a post (message number 2571 re-created on the O-Smear blog) on InvestorVillage.com, using his old anonymous alias antisocialmedia, Judd Bagley discusses his new useful ally to carry out Patrick Byrne’s vendetta against investigative journalist and blogger Gary Weiss.

The guy's name is Ed Manfredonia, his website is wallstreetscandals.com, and yes, he fell off his rocker a while ago. But while his version of reality and the objective observer's version will likely differ, I don't get the impression that he's actively being deceitful...he's just a bit...touched.

Still, if just 10% of the facts he cites are faithful to reality (and in my opinion, it's much higher than that), well let's just say it fits the larger pattern we're all seeing emerge.

In the absence of a direct quote from Gary Weiss on the topic of Ed Manfredonia, read the next best thing (the words of lamborghini751). [Emphasis added.]

Edward Manfredonia's delusional conspiracies, irrational hatred of Gary Weiss, and anti-Semitism is posted on his own web site

As stated above by Judd Bagley, he has read Edward Manfredonia's web site, wallstreetscandals.com. Mr. Bagley apparently knew that Edward Manfredonia was possibly mentally imbalanced when he wrote that Mr. Manfredonia, "he fell off his rocker a while ago" and is "just a bit...touched." Judd Bagley's actions are even more reprehensible in that he was taking advantage of a person whom he obviously suspected of being mentally ill.

By reading Edward Manfredonia's web site, wallstreetscandals.com, you see his obsessive and irrational hatred of Jews and in particular, Gary Weiss. Edward Manfredonia's paranoid fantasies apparently made him Judd Bagley's choice of hatchet man to carry out Patrick Byrne's vendetta against Gary Weiss and his efforts to smear me.

For example, on his web site wallstreetscandals.com, Edward Manfredonia has written in his web site WallStreetScandals.com:

According to Gene Weissman, who credited his father Herbie Weissman with this information, Joel Lovett had tattoos imprinted upon his body (a violation of Jewish law, which is the reason Adolf Hitler ordered Jews to be tattooed at concentration camps), so that Joel Lovett would not be identified with those wimpy Jews who died in Auschwitz. (This story of Joel Lovett and wimpy Jews was confirmed by Jonathan Frey, a former Jew, who converted to Lutheranism from Judaism and married a great niece of Hermann Goering.) [Emphasis added.]

Another example of what Edward Manfredonia has written on his web site wallstreetscandals.com is:

And it was Jews such as Arthur Levitt, Robert Morgenthau, Joel Lovett, Ira Koondel, etc. who hate me because I possessed courage when they had none.

Another example of Edward Manfredonia's comments:

Lovett forgets about the brothels composed of Jewish women at Auschwitz, but it is permissible for VanCaneghan to rape.)

Arthur Levitt is a former Chairman of the Securities and Exchange Commission. Robert Morgenthau is the Manhattan District attorney. Joel Lovett is the former Vice Chairman of the American Stock Exchange. Ira Koondel served on the American Stock Exchange Board of Governors.

Patrick Byrne threatens critics with retaliation on antisocialmedia.net (at that time it was anonymous blog)

While antisocialmedia.net was published anonymously, on December 23, 2006, in a post (message number 2964) on InvestorVillage.com, using his alias Hannibal, Patrick Byrne wrote:

Can everyone sense these guys sweating? They seem to be getting nervous, don't they?

…. But the average reader may still ask, Why are they so nervous, and why now? The answer is, it is because the bullies know what is coming, they know where this antisocialmedia stuff is heading, in a way that the average reader does not. They are flailing in an attempt to derail it….

Check out antisocialmedia.com to get a preview, and trust me when I say, what is coming is much better. [Emphasis added.]

Roddy Boyd exposes Judd Bagley

On January 2, 2007, Roddy Boyd (Overstock.com Lashes Out at Critics on Web) exposed Judd Bagley as the anonymous person who was administering antisocialmedia.net and posting smears against critics of his boss, Patrick Byrne (CEO of Overstock.com). About a week earlier, Patrick Byrne had threatened critics with retaliation on antisocialmedia.net.

Patrick Byrne issues a threat to Gary Weiss

On January 13, 2007, in a post (message number 3451) on InvestorVillage.com, using his alias Hannibal, Patrick Byrne wrote:

...from what I know, I suspect that the largest blows to Gary are still to come. You ain't seen nothing.

Patrick Byrne calls Herb Greenberg and Gary Weiss "evil corporate guys" and issues threats

On January 14, 2007, in a post (message number 3566) on InvestorVillage.com, Patrick Byrne wrote the following under his alias Hannibal:

HOWEVER, NOW THAT JUDD HAS REVEALED HIMSELF, LET ME TAKE THE OPPORTUNITY TO SAY I WHOLEHEARTEDLY ENDORSE HIS SLEUTHING AND EXPOSURE OF GARY WEISS AND HIS VARIOUS MANIPULATIONS. AGAIN, YOU GUYS DON'T GET IT. WE CAN ALL TELL FROM THE WAY YOU FOLKS ARE STRANGELY QUIET FOR ONCE, AS YOU PLAN YOUR NEXT PARTY LINE. THE PROBLEM IS, YOUR PARADIGM WILL NOT COMPUTE ON THIS SIMPLE TRUTH: WE ARE THE CITIZEN JOURNALISTS, GARY (& HERB ETC.) ARE THE EVIL CORPORATE GUYS, THE CORPORATIONS THEY WORK FOR HAPPEN TO BE MEDIA CORPORATIONS, AND WE ARE USING THE INTERNET TO BREAK THEIR STRANGEHOLD ON THE PUBLIC'S UNDERSTANDING. IT IS ALL VERY 2.0. BE HAPPY YOU ARE PART OF HISTORY IN THE MAKING. [Emphasis added. Mr. Byrne used cap letters.]

Edward Manfredonia does Judd Bagley’s dirty work on critics of his boss, Patrick Byrne

From January 24, 2007 to March 6, 2007: Edward Manfredonia posted anti-Semitic comments and other vile and malicious smears on antisocialmedia.net, directed at Gary Weiss, me, and his other people he perceives as some way connected to Gary Weiss.

For example, on January 24, 2007, Edward Manfredonia posted the following comment to a blog post by Judd Bagley on antisocialmedia.net:

Weiss took ubrage at this true description of his mentality and anonymously labeled me, a Jew baiter and an anti-Semite.

Weiss violated all principles of the Torah and Talmud by lying about the murders of Al Chalem and Maier Lehmann. Weiss attributed the murders of Chalem and Lehmann to the Italian Mafia when Weiss knew that the Russian Mob had murdered Chalem and Lehmann....

Gary Weiss has defamed me- as usual. In court documents I stated that Gary Weiss could have been a Kapo in Auschwitz….

Weiss violated all principles of the Torah and Talmud by lying about the murders of Al Chalem and Maier Lehmann….

When I sued Weiss in court, Justice Stallman accepted the perjured testimony of Weiss even though I vociferously stated that Weiss had committed perjury. When I proved that Weiss had committed perjury, Stallman, in violation of all judicial principles, quoted the perjured testimony of Weiss and stated that I had not objected.

I have stated that Justice Stallman accepted the perjured testimony of Weiss, whom I had proved had stolen money from BusinessWeek via false expenditures. Stallman even lied and stated that I had not objected to Weiss’s perjured testimony.

I stated that Stallman’s many lies were due to the fact that Weiss and Stallman were Jewish.

The Babylonian Talmud, authored during the Babylonian Exile, stated that Jews cannot testify against each other in court….

Seymour Zucker was a friend of Feivel Gottlieb, who was an investor in the stock frauds of Maier Lehmann. (Note the stock frauds were manipulated by members of Lehmann’s synagogue- including Gottlieb.) [Emphasis added.]

On January 29, 2007, Edward Manfredonia smeared me again on antisocialmedia.net after Gary Weiss wrote about me in his blog:

Gary Weiss is quoting Sam Antar, who on the surface appears to have chaned his life.

But this is supreficial.

In September 2005 I was in Supreme Court, Manhattan County. I met an interesting fellow in the courthouse. He was a cousin of “Crazy” Eddie Antar. And he provided me with an intersting story.

It appears that “Crazy” Eddie’s niece, not Sam Antar’s daughter, was going to have a bat mitzvah. So “Crazy” Eddie sent an approximate amount of “20,000 for his niece’s bat mitzvah.

“Crazy” Eddie wired the money from a bank in Israel.

So, if Sam Antar is such an honest individual, I am certain that he has provide this information to the United States government- and the government is collecting the money.

People trust me. No one trust Weiss except for some short sellers. And if Weiss were such a genius, why was he not aware of the scam that Eddie Antar was accomplishing.

The reason: Weiss relies upon crooks and people, who violate federal securities laws by illegal short selling. [Emphasis added.]

I have no daughters. I have not been on speaking terms with Eddie Antar since I testified against him and his immediate family in a criminal trial and SEC civil trial. At that time, I had no personal contact with Eddie Antar (except for confronting him at trial in 1993) since about 1989. In addition, Sephardic Jews in my community do not have bat mitzvahs for girls.

In an e-mail that Edward Manfredonia had sent me in an attempt to discredit Gary Weiss, he admitted that my name “never came up” in his purported conversation about any illegal activities. In another e-mail he wrote, “Now, I never said that you knew about this money.”

However, Edward Manfredonia’s admissions to me that I had done nothing illegal or unethical did not stop him from making up new lies about me. Such lies about me written by Edward Manfredonia seemed to suit Patrick Byrne and Judd Bagley’s smear campaign very well. They had what may be called an outside proxy to smear me.

Patrick Byrne says he is an avid reader and raving fan of antisocialmedia.net

On January 31, 2007, in a post (message number 4287) on InvestorVillage.com, using his alias Hannibal, Patrick Byrne writes:

Overstock and I have precisely 0 to do with AntiSocialMedia.

Except for the fact that I am an avid reader and raving fan.

Obviously as an “avid reader” and “raving fan” of antisocialmedia.net, Patrick Byrne apparently found Edward Manfredonia’s comments to Judd Bagley’s posts on the blog suitable for his smear campaign against me. No action was taken to remove Edward Manfredonia’s comments until about late May 2007. Instead Edward Manfredonia would post more vile and malicious smears and anti-Semitic comments on antisocialmedia.net.

Edward Manfredonia rants

From February 23, 2007 to March 30, 2007, Edward Manfredonia posts dozens of rambling comments on the Overstock.com message boards on InvestorVillage.com (still not deleted) and Yahoo (since then deleted by Yahoo). All of the comments contained vile and malicious smears and anti-Semitic innuendo. In addition, Judd Bagley and Patrick Byrne, operating as a tag team posted dozens of comments on the InvestorVillage.com and Yahoo message boards using anonymous aliases during the same time frame and interacted with other message board participants.

On February 23, 2007, Edward Manfredonia now said that I am Eddie Antar’s “beloved brother.” In a post (message number 5074) on InvestorVillage.com, he wrote:

Weiss either lied in his book or committed perjury in an affidavit, which was entered into the court record…..

I was told by one of your relatives that your beloved brother, Eddie "Crazy Eddie" Antar had sent approximately $20,000 into the United States for a bat mitzvah.

So, if you are a reformed felon, why do you not report this crime to the United States? [Emphasis added.]

Now Edward Manfredonia was claiming that I am Eddie Antar’s “beloved brother.” However, I am the cousin that testified against Eddie Antar, his father, and his brothers.

Edward Manfredonia's conspiracy of the Jews

On March 6, 2007 Edward Manfredonia posted another smear and anti-Semitic comment to a blog item written by Judd Bagley on antisocialmedia.net. He wrote:

While Al Chalem had previously had connections with the Italian Mafia, Lehmann refused to have anything to do wth the Italian Mafia.

Lehmann’s partners in his stock frauds were Orthodox Jews, many of whom, such as Feivel Gottlieb, were members of his synagogue.

This was known to Gary Weiss, a great defender of Israel, and to Weiss’ editor, Seymour Zucker.

Seymour Zucker and Feivel Gottlieb belonged to the same Talmud study group.

Seymour Zucker knew that Feivel Gottlieb was involved in the stock frauds of Maier Lehmann. Zucker knew that Gottlieb had earned millions in the stock frauds of Maier Lehmann, who was descended from a long line of Rabbis.

Weiss knew of the involvement of Orthodox Jews in the stock frauds of Maier Lehmann, but Weiss refused to expose the stock frauds of Maier Lehmann because Weiss would have been compelled to expose the involvment of an entire Orthodox synagogue in the stock frauds of Maier Lehmann. [Emphasis added.]

Edward Manfredonia's perverted and irrational hatred of Gary Weiss

On March 26, 2007, in a post (message number 5835) on InvestorVillage.com, Edward Manfredonia wrote:

I once accompanied Weiss to a restaurant, Sweet n' Tart, in Chinatown. Weiss ordered pig's blood. It looked scary.

But Weiss consumed the pig's blood with glee. Speaking of treyfe.

On March 27, 2007, Judd Bagley, using his alias De Daumier-Smith posted a recommendation to a message (number 5880) on InvestorVillage.com, written by Edward Manfredonia. Mr. Manfredonia claimed:

...Gary Weiss protected a confessed serial rapist. Just so that he could lie about two murders and publish a book- which bombed.

Weiss is evil made flesh.

Judd Bagley’s comments posted on InvestorVillage.com show he was aware about the content of Edward Manfredonia’s anti-Semitic comments

On March 30, 2007, in a post (message number 5941) on InvestorVillage.com using his alias De Daumier-Smith, Judd Bagley wrote:

I was just checking my referrer logs for March to see how people are finding ASM…..

Then a few days ago, apparently satisfied that his name appears in one of Ed Manfredonia's comments…. On March 24, Sam changed tactics a bit, arriving while searching for ‘Judd Bagley Jews’. Having learned that I'm about as pro-Semitic a goy as you'll meet….” [ Emphasis added.]

It is apparent from Judd Bagley’s remarks above that he knew about Edward Manfredonia’s anti-Semitic comments. He knew that I was concerned about such vile remarks. He knew what comments were being posted on antisocialmedia.net. It appears that Edward Manfredonia's comments antisocialmedia.net served his boss Patrick Byrne's interests. Judd Bagley's condescending remarks are indicative of his tacit approval of Edward Manfredonia's anti-Semitic remarks.

Judd Bagley claims that Edward Manfredonia is a "principled man" and lacks the ability to communicate effectively


On March 30, 2007, another message board participant who is in contact with Judd Bagley, posted (message number 5943) a private message from Mr. Bagley to him:

This was Judd's reply to me when I asked him about Mr. Manfredonia.
Judd, sorry about posting a PM, but I felt in this case it was warranted.

"I have had MANY lengthy conversations with Ed. He is a very good and principled man. But he seriously lacks the ability to communicate effectively." [Emphasis added.]

Judd Bagley excuses Edward Manfredonia’s anti-Semitic comments as “quirky,” considers him to be "knowledgeable," and admits to talking with Edward Manfredonia

During that week, Edward Manfredonia went on a lunatic binge on InvestorVillage.com posting new vile and malicious smears and anti-Semitic comments on the Overstock.com message board.

For example, on April 2, 2007, thinking that another person that had been posting on InvestorVillage.com was me, Edward Manfredonia wrote (message number 6041):

Tam, aka Sam the Scam, violated Shabbos.

You are not supposed to use the Internet on Passover.

Hey, do not feel bad. I was invited to a seder. Everybody orders Chinese food. The matzohs are provided at the house.

Sam, you are still a thief and a liar at heart. You have not changed. You defend Weiss and only a liar and a thief can defend Weiss.

Sorry. [Emphasis added.]

In another post (message number 6046) on InvestorVillage.com, Edward Manfredonia wrote:

Sam, why are you so interested in my conversations with Judd Bagley? 

Why do you not elucidate upon your conversations with your friends, who are short Overstock. 

How is your cousin, Eddie? 

What do you know about Eddie sending money to New York for a bat mitzvah?

It is Passover. Should you not be at a seder? 

It must be those shmura matzohs. They are hard on the stomach. [Emphasis added.]

On InvestorVillage.com, Edward Manfredonia was asked by blogger, Scipio Africanus (O-Smear blog), about his contacts with Judd Bagley on InvestorVillage.com (message number 6050):

What are you hiding?

On April 2, 2007, in a post (message number 6052) on InvestorVillage.com using his alias De Daumier-Smith, Judd Bagley responded to the question:

…Ed may have a quirky way of communicating in writing, but I can assure you he's one of the more knowledgeable people I know. Ed has been enormously generous in sharing his knowledge of how Planet Wall Street works (both in theory and in practice) with me.

If Ed and I spent more than five minutes talking about you or Gary or anything else from this or any other board I'd be shocked. [Emphasis added.]

Afterwards, Edward Manfredonia admits that he talks to and e-mails Judd Bagley

On April 3, 2007, in a post (message number 6117) on InvestorVillage.com using Edward Manfredonia wrote:

I talk to Judd.

I send Judd e-mails.

Like Edward Manfredonia, Judd Bagley shows his irrational hatred of Patrick Byrne critic Gary Weiss by labeling him as ‘evil’

On April 7, 2007, in a post (message number 6276) on InvestorVillage.com using his alias De Daumier-Smith, Judd Bagley wrote:

“No...Weiss is evil. I'll stand by that. More than evil, he's soul-less evil.

That's the worst kind.”

Edward Manfredonia posts more vile and malicious anti-Semitic comments and smears on antisocialmedia.net

On April 8, 2007, Edward Manfredonia posted two separate comments filled with vile smears and anti-Semitic innuendo to a new blog item on antisocialmedia.net targeting Yolanda Holtzee. He rambles about far-out conspiracy theories such as murder and cover-ups. He accuses people of committing crimes because they are Jewish. He accused Manhattan District Attorney Robert Morgenthau of not indicting certain people because they were Jewish and his friends.

For example, Edward Manfredonia wrote the following comment in antisocialmedia.net:

Bear Sterns was saved by an indictment only by the friendship that existed between Arthur Levitt, then Chairman of the Securities and Exchange Commission; Robert “Tzaddik” Morgenthau, Manhattan District Attorney, who according to Sidney Schanberg, does not indict his friends; and, Alan “Ace” Greenberg, Chairman of Bear Sterns.

Note: The refusal of Robert Morgenthau to indict his friends is known to “Honest” Sam Antar, convicted felon and at heart still a scam artist, and Gary Weiss, a liar thief, perjurer, and racist and a disgraced former reporter for BusinessWeek. “Honest” Sam Antar observes 611 mitzvoths, neglecting to observe two of the Ten Commandments: Thou shall not bear false witness against thy neighbor and Thous shall not steal. (More of Bear Sterns and the five Tzaddiks in a later installment.)….

When you sleep with vile pigs like Sam Antar, a thief and a liar, and Gary Weiss, a liar, thief, perjurer and racist, you wake up covered in pig manure and suffering from trichinosis, a vile disease. [Emphasis added.]

I guess Edward Manfredonia’s now believes that I was somehow involved in some wild conspiracy with Robert Morgenthau (Manhattan District Attorney).

In another comment on antisocialmedia.net, Edward Manfredonia writes:

Sam “The Ant” Antar is an Orthodox Jew, who observes 611 if the 613 mitzvoth found in the Talmud. Sam “the Ant” has consistently refused to follow two of the most important. These two are the two Commandments: Thou shall not covet thy neighbors’ goods (Thous shall not steal) and Thou shall not bear false witness against thy neighbor. Gary “The Perjurer,” although not an observant Jew (remember the pig’s blood episode), also violates with impunity the two same Commandments: Thou shall not covet thy neighbors’ goods and Thou shall not bear false witness against thy neighbor.

Both Antar and Weiss are vile, odious creatures, who defile the memory of 6 million Jews, murdered by the Nazis, to cover up their own criminal activities. [Emphasis added.]

Judd Bagley defends Edward Manfredonia's vile remarks

On 04/10/07, in a post on InvestorVillage.com (message # 6435) a person using the alias Tamoshanter, asked Judd Bagley a question:

Say Judd how come you haven't taken Ed to task for his comments on people of the Hebraic persuasion?

The stuff he said about the judge being biased because he's not Jewish and Morgenthau not prosecuting his Jewish friends and the other references to Jewish people Ed introduced into our fair message board.

How about it? Huh?

On April 10, 2007, in a post on InvestorVillage.com (message # 6436) Judd Bagley using his alias De Daumier-Smith responded to Tamoshanter:

Because I don't know anything first hand about those situations. Maybe he's right. I've seen disgusting acts of cronyism among Mormons, Catholics, Muslims, Vegans (yes...it might as well be a religion), and atheists, and I don't doubt it happens among Jews as well.

If I knew it to be false, I would have said something. But I don't. So I haven't.

It's like when some some civil rights group wanted to boycott Howard Stern a few years ago, because they said he makes fun of minorities. When pressed, the best they could do was point to specific people Stern makes fun of, including Michael Jackson and OJ Simpson, both of which probably deserve it, and would whether they were black or not (and indeed, Michael Jackson isn't much anymore).

So, if Ed had said that all Jews are corrupt then I'd be the first to condemn him, because I know first hand that it's not true. As it is, these guys Ed writes about might be corrupt. They certainly wouldn't be the first. [Emphasis added.]

Judd Bagley gets irritated at my visits to antisocialmedia.net, lists them on Yahoo, and issues a threat directed at my future employment and family

On April 11, 2007, in a post on Yahoo, using his alias panamapump, Judd Bagley wrote:

Your recent visits to antisocialmedia.net (all times Central)…. On behalf of your family and in the interest of your own employability I ask you to please never visit ASM again. I'll email you new articles when they come out.

On May 15, 2007, I posted a blog item entitled, “Overstock.com: A Copy of its Code of Business Conduct and Ethics.” Previous, to me making publicly available via the internet a copy of Overstock.com’s Code and Business Conduct and Ethics, the only way to obtain a copy was my sending a written request to the company by mail (not e-mail).


Over the next few days, I posted two blog items, entitled “To Patrick Byrne, CEO of Overstock.com - Did you comply with the Company's Code of Business Conduct and Ethics” and “To Patrick Byrne, CEO of Overstock.com: More Questions about the Company's Code of Business Conduct and Ethics.”

Patrick Byrne uses Overstock.com resources to support and drive traffic to antisocialmedia.net

At about May 28, 2007, Patrick Byrne re-published to Overstock.com's web site certain posts he had made on other web sites. For example, he re-publishes a comment (message number 2426) that he posted on InvestorVillage.com where he writes:

Is it bad when a reporter is exposed as a vindictive liar? Hey sports fans. Sorry for my long absence. I think it has been a few months since I have had time even to glance at any of these boards. Of course, it seems IV is now the only decent one left.

For those who have not seen it, I suggest reading this.

http://www.antisocialmedia.net/

(Full disclosure: I am not behind antisocialmedia.com, but I could speculate who is.)

Is it bad? When a journalist is exposed as a pumper of his own sorry books, a writer (always under fake names) of hatchet jobs on his colleagues' work, and in general, a flim-flam artist of the worst kind... is that bad? Is it bad when the exposure makes people question why he spends so much of his waking time engaged in fervent sock-puppetry? It hardly seems like a hobby, does it?

Coming back here and seeing the response to the "'splaining" post provide a case study in chatter. Scipio answers with blather, and hopes no one reads the original (at www.antisocialmedia.com ) to know why his answer is blather. That is why, after months away from these boards, when I came back and saw this I decided I should chime in: no matter what, I know my posts do not get skipped, and cannot be drowned with chatter.

So again, please visit www.antisocialmedia.com and read this.

I hear that GW is melting down, melting down, melting down..... [emphasis aded.]

It appears that despite Patrick Byrne's previous denials, Overstock.com's resources are being used to support and drive traffic to antisocialmedia.net.

Finally, sometime during the last week of May 2007, all of Edward Manfredonia’s anti-Semitic comments and most of his smears (posted from January 2007 to April 2007) were deleted from antisocialmedia.net by Judd Bagley

We must ask ourselves three questions.

Why did Judd Bagley permit Edward Manfredonia’s comments to be published at all on antisocialmedia.net? It is apparent that antisocialmedia.net has a moderation feature to screen out objectionable comments before they are published.

As described above, in December 2006, Judd Bagley had stated that he barred blogger Scipio Africanus from posting comments on antisocialmedia.net. Judd Bagley wrote to Scipio Africanus:

I'm also now reminded of the reasons you were banned from commenting on antisocialmedia.net the first time, and happily reinstate that ban. As was said before, as long as you're on the payroll, you can afford to go start your own blog and ban all of us. [emphasis added.]

Scipio Africanus (O-Smear blog) had complained to Judd Bagley on November 29, 2006 about being barred from making rebuttal comments to Judd Bagley’s smear posts on antisocialmedia.net. In a post (message number 2496) on InvestorVillage.com, Scipio Africanus wrote:

Sometime yesterday I posted a comment to this fraudulent site and filled in the reviewer comments that they left out of their article on Amazon reviews of Wall Street vs. America. Unsurprisingly, the comments were later removed as they don't really bolster what they want people to think. They know people will just eat up what they say and not check for themselves.

Note to the uninformed: Everywhere they use "...", they removed something.

Apparently, Judd Bagley reads the comments sent to antisocialmedia.net and only publishes or keeps those comments that serve the delusional conspiracy theories and vendettas of his boss, Patrick Byrne.

Why did it take so long for Judd Bagley to delete Edward Manfredonia’s repulsive comments from antisocialmedia.net after they were published? It is apparent the both Judd Bagley and Patrick Byrne promptly knew about Edward Manfredonia’s anti-Semitic remarks on antisocialmedia.net and took no immediate action. Judd Bagley took his sweet time to delete Edward Manfredonia's vile and hateful anti-Semitic comments from antisocialmedia.net. Were Patrick Byrne and Judd Bagley concerned about possible violations of Overstock.com’s Code of Business Conduct and Ethics now that I had publicized its content?

On May 29, 2007, on Yahoo, I asked Judd Bagley about Edward Manfredonia’s deleted anti-Semitic comments:

Have you deleted Edward Manfredonia's anti-Semitic remarks from antisocialmedia.net?

Shortly afterwards Edward Manfredonia appeared again and went on another lunatic rage on the Yahoo message boards posting multiple vile and malicious anti-Semitic comments and smears. Yahoo deleted all of his comments and deleted his profile in an attempt to prevent him from posting on Yahoo again.

On May 30, 2007, I posted a new blog item entitled, "Open Letter to the Audit Committee of Overstock.com: The Company’s Code of Business Conduct and Ethics and actions of Patrick Byrne and others” and e-mailed a copy of it to Overstock.com’s Board of Directors. It outlined various issues for the Audit Committee to consider about possible violations of the company’s Code of Business Conduct and Ethics by Patrick Byrne and Judd Bagley.

On June 3, 2007, I posted a blog item entitled “Memo to Judd Bagley: Director of Communications at Overstock.com - About Threats on AntiSocialMedia.net” and send an e-mail to the Board of Directors of Overstock.com informing them of a physical threat to Gary Weiss posted as a comment to a blog post by Judd Bagley on antisocialmedia.net:

alpineanalytics wrote:

Gary Weiss is PATHETIC…his books suck …he is a weasel. In fact, there are quite a few people out there that are going to make an example out of him. He should be looking over his shoulders more carefully when he wants to engage in disrespectful behavior with people that will hurt him…economically, emotionally, and probably physically. Hey Gary…Louie P and Benny S. say hi…you $cumbag.

Posted 10 Sep 2006 at 8:36 am

Judd Bagley allows new anti-Semitic comments by Edward Manfredonia to be published on antisocialmedia.net

On June 6, 2007, in an apparent retaliation for my blog posts, Judd Bagley again permitted a new anti-Semitic comments and vile and malicious smears by Edward Manfredonia to be published on antisocialmedia.net. Edward Manfredonia wrote a long rambling anti-Semitic smear directed against me on antisocialmedia.net:

SAM ANTAR: A SPIRITUAL DESCENDANT OF THE KAPPOS IN AUSCHWITZ

Sam Antar is a liar, thief, and convicted felon. Sam “the Ant’ smears my name because I have proved that Sam “the Ant” is a hypocrite.

Sam’s beloved cousin, Crazy Eddie Antar, continues to launder money into the United States sending part of his vast, illegal fortune to his relatives. Crazy Eddie does this by means of Israeli Banks. How would I know this? Because one of Eddie Antar’s cousins told me about the money laundering. If I know about the money laundering, why has Sam “the Ant,” a self-proclaimed reformed thief not sent a letter to either the Securities and Exchange Commission or the Department of Justice?

Probably because he would have to obtain permission to inform on his cousin. And nobody in his small circle of friends wishes to expose the tip of the money laundering iceberg.

Several questions for Sam Antar.

Did Sam keep millions of dollars that were stolen from American citizens?

Did Sam short the stock of Crazy Eddie in offshore accounts?

Is Sam “the Ant” the consigliere of Gary Weiss, who has covered up murders that were perpetrated by the Russian Mob?

Does Sam “the Ant” have any connection to the Russian Mob in Brighton Beach?

Does Sam “the Ant” possess knowledge of the murders of Al Chalem and Maier Lehmann?

These are valid questions, which have not been answered.

But permit me to shed some light upon the nature of Sam “the Ant.” Sam was an almost universal thief– almost. Sam stole hundreds of millions of dollars from Muslims, Christians and Jews– and Mormons. But Sam Antar was not a sociopath. Sam Antar and his cousin Crazy Eddie did not steal from members of his Orthodox Sephardic synagogue. How do I know? Members of the synagogue told me this important fact.

So, it is readily apparent that perhaps 100 people, members of the synagogue, knew that the stock of Crazy Eddie was a fraud, yet not even one individual from the synagogue informed either the Securities and Exchange Commission or the Department of Justice. That is a fact– and facts can have no value judgment and express no opinion.

You must understand that to Sam Antar, you are not a human. But there is a difference. The Kappos in Auschwitz stole the lives of people. Sam Antar only wanted to steal your money.

And Sam the Ant will smear the name of any decent person, who exposes the lies and hypocrisy of anyone that dares to expose the basic indecency and inhumanity shared by both Sam Antar– and his spiritual mentor, Gary Weiss.

Sam “the Ant” is perhaps the biggest anti-Semite in New York City, because he smears the names of decent people to cover up his financial crimes. And by so doing gives rise to scandal.

Respectfully submitted,
Edward Manfredonia

Posted 06 Jun 2007 at 5:25 am

I call Howard Sirota, a Securities Lawyer

On June 7, 2007, I called attorney Howard Sirota, who was the Chairman of the Crazy Eddie plaintiff’s class action litigation. He has sued Eddie Antar, me, and other members of the Antar family for securities fraud. After two years of down in the mud fighting with him I threw in the towel and gave up. I started to cooperate with all attorneys representing victims of the Crazy Eddie fraud. I cooperated with the victim’s attorneys without any deal or legal protection limiting my liability. Mr. Sirota and most of the other plaintiff attorneys were kind enough to reward me with a nice letter to Judge Politan after the criminal trial ended in 1993.

After reading copies of Edward Manfredonia’s various comments on antisocialmedia.net that I had e-mailed him, Howard Sirota contacted Joseph J. Tabacco Jr. (who was recently appointed to Overstock.com’s Board of Directors) He is a fellow class action lawyer who Howard had known for over 20 years. In fact, Mr. Tabacco was one of the class action attorneys who sued me and other Antar family members for fraud. Joseph J. Tabacco Jr. had never objected to the class action attorney’s committee treatment of me.

Howard Sirota e-mails Joseph J. Tabacco Jr.

On June 8, 2007, Howard Sirota sent the following e-mail to Joseph J. Tabacco Jr.

From: Howard Sirota
Sent: Friday, June 08, 2007 9:37 AM
To: Joseph J. Tabacco, Jr.
Cc: san-francisco@adl.org; new-york@adl.org; Sam Antar

Subject: Anti-Semitic Comments on antisocialmedia.com

Dear Joe,

While I think you'll end up regretting your decision to join the Board of Overstock.com, that's really your own business.

I'm sure that you are unaware that someone named Edward Manfredonia is posting anti-semitic comments on www.antisocialmedia.net run by Judd Bagley, who works for Overstock.com.

Now you are on actual notice of the anti-semitic website run by an employee of the public company of which you are a Director. I expect you to make inquiry and take immediate corrective action.

If not, the ADL and I will do it for you.

This is NOT about any short-selling controversy. I have no position in OSTK.

This is about anti-semitism, which I won't countenance. Neither would the Joe Tabacco I knew.

Make it stop!

Regards,

Howard

Joseph J. Tabacco Jr. responds to Howard Sirota by e-mail

Joseph J. Tabacco Jr. wrote the following e-mail to Howard Sirota:

From: Joseph J. Tabacco, Jr.
Sent: Friday, June 08, 2007 1:40 PM
To: Howard Sirota
Subject: RE: Anti-Semitic Comments on antisocialmedia.com

Thanks Howard, I will look into this, you are correct this is not
something obviously that I had been aware of.

Howard Sirota posts a comment about Anti-Semitism on the Yahoo message board for Overstock.com

He writes:

I just did a search for "Jew" on this Message Board.

There are 428 posts containing the word "Jew."

That means that this board is infested with anti-semites, which is intolerable.

Meanwhile, Judd Bagley's website www.antisocialmedia.net posts anti-semitic slurs by someone named Edward Manfredonia.

I have no position in OSTK but I also have ZERO TOLERANCE for anti-semites.

I understand that I can't stop people from hating Jews, just as I can't exterminate cockroaches from the planet. What I can and will do is step on as many as I can in this Life.

This is supposed to be a forum to discuss Overstock.com

I strongly suggest you stick to Overstock.com and make no further anti-semitic remarks. It's easy to trace your IP address to a physical location, see it on Google, and get directions from Mapquest, and turn it all over to the feds and the B'Nai Brith Anti-Defamation League.

Shabat Shalom

Howard Sirota

Yahoo has deleted Edward Manfredonia's anti-Semitic comments in the past. However, InvestorVillage.com has not acted to delete Edward Manfredonia's anti-Semitic comments.

However, InvestorVillage.com has not acted to delete Edward Manfredonia's anti-Semitic comments. On February 20, 2007, InvestorVillage.com booted me as a result of my asking "'deposition-style" messages targeting other members of InvestorVillage'" according to a private message and e-mails sent by them and their attorney. I was asking Patrick Byrne and Judd Bagley questions. I guess that InvestorVillage.com only cares about stopping certain critics of Patrick Byrne and not about deleting anti-Semitic comments.

Afterwards, on June 8, 2007, Edward Manfredonia’s new anti-Semitic comment and smear was deleted from antisocialmedia.net (about two days after it was posted).

A short time later on June 8, 2007, I published a new blog item entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” about Edward Manfredonia’s recent anti-Semitic comments on antisocialmedia.net and the Audit Committee’s apparent lack of interest in dealing with other violations of Overstock.com Code of Business Conduct and Ethics by Patrick Byrne and Judd Bagley.

Judd Bagley responds on antisocialmedia.net

On June 11, 2007, in a blog post entitled, “Piling absurdity upon absurdity,” Judd Bagley posted poor excuses and deflection about the publishing of Edward Manfredonia's anti-Semitic comments on antisocialmedia.net.

Judd Bagley responded on antisocialmedia.net that:

Sirota’s first demand that certain comments be removed from this site was sent early Friday, June 8. The offending comments were posted June 7.

However, the date and time stamp of Edward Manfredonia's anti-Semitic comment is an entire day earlier:

Posted 06 Jun 2007 at 5:25 am

If Edward Manfredonia had submitted his anti-Semitic comments to Judd Bagley on June 6, but it was published on June 7, than Mr. Bagley could have screened out Mr. Manfredonia's repulsive comments. Otherwise it appears that Judd Bagley was being deceitful when he claimed that Edward Manfredonia's comments were posted on June 7. In any case, Judd Bagley had at least twice the amount of time that he had claimed to block or delete Edward Manfredonia's new anti-Semitic comments from antisocialmedia.net.

Judd Bagley claimed on antisocialmedia.net:

Sirota went on to claim that some admittedly inappropriate comments made to this blog (which were immediately removed once brought to my attention) were symptomatic of a further anti-Semitic infestation.

However, on March 30, 2007, Judd Bagley wrote in a PM to another InvestorVillage.com message board participant that said:

I [Judd Bagley] have had MANY lengthy conversations with Ed. He is a very good and principled man. But he seriously lacks the ability to communicate effectively.

In addition, as shown earlier in this blog post, on April 2, 2007, Judd Bagley had written the following comment on InvestorVillage.com about Edward Manfredonia:

…Ed may have a quirky way of communicating in writing, but I can assure you he's one of the more knowledgeable people I know.

I guess Judd Bagley has now gone from previously describing Edward Manfredonia’s comments as “quirky” to now “inappropriate” and "offending." However, Judd Bagley still will not admit that Edward Manfredonia's comments were anti-Semitic.

It appears that Judd Bagley needed a twisted minded person like Edward Manfredonia to smear critics of Patrick Byrne. After all, on December 3, 2006, on InvestorVillage.com, as Judd Bagley previously stated, “he fell off his rocker a while ago” and is “just a bit touched.” Apparently, Judd Bagley described an obviously mentally disturbed Edward Manfredonia as "principled" and "knowledgeable" in a feeble attempt lend him credibility and to egg him on to post more anti-Semitic comments and smears.

Judd Bagley responded on antisocialmedia.net:

Sam Antar also chimed in, insisting that the unnoticed words of one commenter somehow equate to the endorsement of the board of directors of my employer.

Apparently, Judd Bagley wants everyone to believe that Edward Manfredonia’s vile and malicious smears and anti-Semitic comments on antisocialmedia.net had gone "unnoticed" by him and others. However, Patrick Byrne has written that he is an "avid reader" and "raving fan" of antisocialmedia.net.

Judd Bagley allowed Edward Manfredonia to post new vile and malicious smears and anti-Semitic comments on antisocialmedia.net on June 6, 2007 (after deleting all such previous anti-Semitic comments around the last week of May 2007).

Why would Judd Bagley permit Edward Manfredonia to post anti-Semitic comments again? Judd Bagley had previously blocked and deleted the comments of Byrne critic, blogger Scipio Africanus from antisocialmedia.net. Was Judd Bagley irritated at my blog posts here and e-mails to the Board of Directors detailing his and Patrick Byrne’s apparent violations of Overstock.com’s Code of Business Conduct and Ethics?

It appears that Judd Bagley played an ugly game of spite using anti-Semitism as a weapon. If Joseph J. Tabacco Jr. had not pushed Patrick Byrne and Judd Bagley to have Edward Manfredonia’s anti-Semitic comments deleted, it is very likely that they would have remained published.

Judd Bagley mocked Howard Sirota, attacked Gary Weiss, and treated the issue of anti-Semitism on the Yahoo Overstock.com message board and antisocialmedia.net with sarcasm. Rather than discuss content of the anti-Semitic posts on Yahoo and antisocialmedia.net, Judd Bagley wrote:

• Those in favor of illegal naked short selling authored 323 messages, or 73% of the total.
• Those most likely to be opposed to illegal naked short selling authored 96 messages, or 22% of the total.
• Those without a discernible position on the issue of illegal naked short selling authored 23, or 5% of the total
• Judd Bagley goes on to belittle Howard Sirota by pointing to the number of posts on Yahoo using the word Jew, by what Mr. Bagley believes are the investment opinion and religion of certain board posters.

The purported statistic that Judd Bagley cited is misleading as to the investment opinions of certain message board posters. It does not take into account the reason why the word Jew was used.

Judd Bagley apparently attempted to imply that if a Jewish person responds to an anti-Semitic remark by using the word Jew or that any person who uses the word Jew to condemn anti-Semitism, must also be anti-Semitic.

Howard Sirota replied on the Yahoo Overstock.com message board:

It's fine to use the word "Jew." I was making (or trying to) the point that 428 posts containing the word "Jew" was strongly suggestive that something was wrong here...it's not like it's a Message Board on Bank Leumi.

In response to Judd Bagley's poor excuses, innuendo, and deflection on the issue of anti-Semitism, Howard Sirota called for a boycott of Overstock.com.

Other than Joseph J. Tabacco's, recent action, it appears that the other Audit Committee members have had their head in the sand regarding other vile activities of Patrick Byrne and Judd Bagley.

Therefore, I ask this question again:

Who is Judd Bagley trying to fool about the use of anti-Semitism to attack critics of his boss, Overstock.com CEO Patrick Byrne?

One day we may find out the excuses that Patrick Byrne or Judd Bagley had given Joseph J. Tabacco when Mr. Tabacco called either one of them to ask about Edward Manfredonia's anti-Semitic comments. As an attorney, I am quite sure that Mr. Tabacco has heard just about every lie in the book.

Does Patrick Byrne (CEO of Overstock.com), really believe that he can separate himself from the ugly, malicious, and vile actions of Judd Bagley (Director of Communications at Overstock.com) by building a flimsy wall of separation between Overstock.com and the antisocialmedia.net smear web site?

Does Judd Bagley really believe that he can separate himself from the actions of his apparently mentally imbalanced and anti-Semitic advisor Edward Manfredonia acting in concert with him?

Can the Board of Directors of Overstock.com (especially its Audit Committee), shirk their responsibility to oversee compliance with the company's Code of Business Conduct and Ethics by hiding its head in the sand?

The Securities and Exchange Commission into Overstock.com and Patrick Byrne continues even after they dropped the investigation of Gradient Analytics (another target of Mr. Byrne's vendetta).

Only one person at Overstock.com has apparently taken a single step to reign in Patrick Byrne's delusional madness and he is Joseph J. Tabacco (recently appointed to the Board of Directors of Overstock.com on June 6, 2007. Let's see how long Mr. Tabacco can last at Overstock.com. So far, two Board members have resigned in the last few months. Remember what Joseph J. Tabacco had written in an e-mail to Howard Sirota:

...you are correct this is not something obviously that I had been aware of.

Perhaps, Joseph J. Tabacco did not know what he has getting into at Overstock.com when he signed on as a Board member. Hopefully, he will learn very fast.

Written by,

Sam E. Antar (former Crazy Eddie CFO convicted felon)

Additional Items:

On June 12, 2007, a contributor to antisocialmedia.net and an Overstock.com shareholder seems to have carried out part of the threat in a comment published on antisocialmedia.net by alias alpineanalytics. That threat stated that:

Gary Weiss....should be looking over his shoulders more carefully when he wants to engage in disrespectful behavior with people that will hurt him…economically, emotionally, and probably physically.

In a post (message number 8042) on InvestorVillage.com, Evren Karpak wrote that he had written letters to three of Gary Weiss's publishers: Forbes, SeekingAlpha.com, and Salon.com in an effort to have them discontinue business ties with Mr. Weiss. Judd Bagley had posted a recommendation to Evren Karpak's post on InvestorVillage.com. It now appears that antisocialmedia.net is directly attempting to inflict economic harm on Gary Weiss. We have to wonder for now whether the other threats to Gary Weiss that are posted on antisocialmedia.net will be carried out.

On June 14, 2007, blogger Scipio Africanus received a threatening e-mail from Judd Bagley, Director of Communications at Overstock.com. Judd Bagley wrote:

If you choose to continue as you have been, I will write about you on AntiSocialMedia.net.

A couple of days later, Judd Bagley carried out his threat. On Saturday June 16, 2007, Judd Bagley posted a new item to antisocialmedia.net. He supposedly reveals the identity of Scipio Africanus who writes the O-Smear blog. According to Judd Bagley, in his effort to find out Scipio's true identity:

AntiSocialMedia.net spent its first few months essentially shooting fish in a barrel.

At first, Judd Bagley wrongfully accused the wrong person as being Scipio Africanus and proceeded to smear him.


In February 2007, Judd Bagley had written on antisocialmedia.net that he had spent "10,000 moments online searching for evidence" of Bloomberg columnist Susan Antilla's divorce only to get it wrong when other people had found such evidence in 15 minutes.

Judd Bagley kind of reminds me of Captain Queeg in the movie, "The Caine Mutiny." Do you remember Captain Queeg rolling the steel balls and raving about the strawberry caper?

Edward Manfredonia is still permitted to post his vile smears and delusional fantasies on antisocialmedia.net. However, for now it appears that either his comments are being edited to avoid anti-Semitic slurs or Judd Bagley has told Mr. Manfredonia to tone it down for now. I guess that Judd Bagley does not appreciate being chastised by Joseph J. Tabacco.

Advice to Judd Bagley

If I were you, I would spend more time worrying about the ongoing government investigation of Overstock.com, Patrick Byrne, and you.

Downloads:

Judd Bagley Threatens me and my family on Yahoo Message Board

Edward Manfredonia Anti-Semitic Comments on antisocialmedia.net

Edward Manfredonia Anti-Semitic Comments on InvestorVillage Message Board