Overstock.com Congratulates Bloomberg Television for Its Emmy Nomination for ‘Phantom Shares’, a Special Report on Naked Short Selling
PRNewswire, 02 November 2007
Bloomberg Television’s special report on naked short selling entitled “Phantom Shares” was nominated for an Emmy(R) Award for Business & Financial Reporting by the National Academy of Television Arts & Sciences. The report, which was nominated for outstanding investigative reporting of a business news story – news magazines and long form, featured Overstock.com and its Chairman and CEO, Patrick Byrne, extensively. It examined the strategy and execution of naked short selling, the threat this poses to American entrepreneurship, and the steps regulators are taking to control it.
Patrick Byrne said of the news, “Unsettled trades in our stock settlement system present a serious problem to our capital markets. Bloomberg’s report shed light on the issue and brought it into the mainstream. It is an example of the critical, investigative mindset that is essentially absent within American financial journalism, and I am pleased to see Bloomberg being recognized for its fine work.”
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Bloomberg TV’s Special Report “Phantom Shares” (later nominated for an Emmy for Investigative Journalism)
PATRICK BYRNE, 05 April 2007
Bloomberg Television has produced a shocking 25 minute exposé showing how Wall Street rogues are exploiting a crack in the system to steal tens of billions of dollars from Americans. The Bloomberg piece starts by talking about Overstock (I make a brief appearance, as a guy just trying to be a good citizen), but goes on to describe a wildly illegal scheme that hurts thousands of companies and millions of Americans with stock accounts. This may turn into a financial scandal that makes Enron look like a Sunday picnic.
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Goldman Snared In Naked Shorting Probe
Forbes, 14 March 2007
One of Wall Street’s biggest prime brokers has been taken to task by the Securities and Exchange Commission and the Big Board for not catching on to its customers’ illegal trading activities.
Goldman Sach’s clearing and execution division is paying $2 million to settle accusations it relied too heavily on what its customers told it without investigating trading activity that showed signs of something being amiss.
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Bloomberg TV Examines ‘Phantom Shares’ in Special Report Tonight
Bloomberg , 13 March 2007
NEW YORK, March 13 /PRNewswire/ — Tonight BLOOMBERG TELEVISION(R) examines a little-known stock trading practice that can be affecting your portfolio and your company. The special report, titled “Phantom Shares,” explores the problem of “naked shorting” in the stock market. The half-hour BLOOMBERG TELEVISION program is scheduled to air on Tuesday, March 13, 2007 at 7:00, 9:00 and 10:00 p.m. ET.
Every day, millions of shares of stock are sold but can’t be delivered because of an obscure trading practice called “naked short selling.” In a normal short sale, an investor borrows shares and sells them, making a profit if the price falls by replacing the borrowed shares with cheaper ones. In a naked short sale, an investor doesn’t borrow the shares, but sells them anyway. In extreme cases, the investor sells “Phantom Shares,” shares that don’t exist. The BLOOMBERG TELEVISION report, anchored by Mike Schneider, explains this practice, how it’s executed and what the Securities and Exchange Commission is doing in an effort to control it. Continue reading “Article: Bloomberg TV Examines ‘Phantom Shares’ in Special Report Tonight”
Naked Short Victim Strikes Back
Forbes, 2 February 2007
Overstock.com filed a $3.5 billion lawsuit in California state court Friday accusing 10 of the largest U.S. securities firms of participating in a “massive, illegal stock market manipulation scheme” to distort its stock.
Flames Flare Over Naked Shorts
New York Times, 20 January 2007
UNSUSPECTING readers of certain stock message boards may be forgiven for believing they have stumbled into a flame war among 14-year-old boys. But the increasingly vicious online dispute actually involves, among others, the chief executive of a publicly traded corporation and a longtime business journalist.
The chief executive is Patrick Byrne, who in recent years has taken to asserting that a vast conspiracy of securities traders, journalists and government officials is bent on bringing down the stock of his company, Overstock.com, a peddler of excess inventory. The journalist is Gary Weiss, the author and former BusinessWeek reporter who has made a second career out of ridiculing Mr. Byrne on his blog (garyweiss.blogspot.com).
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The Story of Deep Capture
By Mark Mitchell, with reporting by the Deep Capture Team
The Columbia School of Journalism is our nation’s finest. They grant the Pulitzer Prize, and their journal, The Columbia Journalism Review, is the profession’s gold standard. CJR reporters are high priests of a decaying temple, tending a flame in a land going dark. In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.” His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea.
Introduction By Patrick M. Byrne, Deep Capture Reporter
PDF (69 Pages): Deep Capture Story
Naked Short Selling: How Exposed are Investors?
James W. Christian, Robert Shapiro, John-Paul Whalen
The Houston Law Review, 10 November 2006
Regulation SHO is a start, but in order to guarantee a fair market place, the SEC must close the loopholes in Regulation SHO and institute comprehensive reforms to the clearing and settlement system. Until the SEC makes these necessary reforms and addresses the DTCC’s mismanagement of the Stock Borrow Program, investors will continue to be exposed to the manipulative potential of naked short selling.
PDF (58 Pages): HLR Naked Short Selling 2006-11-10
Forbes, 13 September 2006
The U.S. Securities and Exchange Commission has received a deluge of requests to amend short-selling rules it enacted just two years ago as the New York Stock Exchange continues its efforts to enforce existing regulations.
JPMorgan Chase has become the fifth bank to be censured and fined by the NYSE’s regulatory division for violations of trading rules meant to curb abusive short-selling.
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Forbes, 25 August 2006
Suspicious trading last year in shares of Global Links, a small Nevada real estate holding company, was far more intense than previously thought.
Data released to Patch earlier this month had shown trade fails of 10 million shares starting in mid-April, a time when 4 million shares of Global Links were issued and outstanding.
Lies, Invention, Journalists, and the SEC
Yahoo as cited by Sanity Check via Wayback, 21 August 2006
The subject matter, Mark Cuban’s ill-conceived stock bashing website that’s nothing more than a foil to slam his short positions, is the ostensible topic. I haven’t even bothered commenting on the site, as it’s pretty obvious to most upright bipeds what is being done there.
But this article is astounding – I literally thought that the guy who emailed me the link was making it up.
Access archived page.
Hedge Fund Hell
Forbes cited by RGM Communications via Wayback, 28 July 2006
Toronto-based Fairfax Financial Holdings filed a $5 billion lawsuit against SAC Capital, Rocker Partners and a number of other hedge funds, claiming they manipulated the insurance company’s stock, shearing its market cap by one-third.
Earlier this week, the regulatory arm of NYSE Group, fined Daiwa Securities America, Goldman Sachs Execution & Clearing, Credit Suisse Securities, and Citigroup Global Markets $1.25 million for violations of Regulation SHO–a rule put in place in January 2005 to clamp down on abuses–related to how they handle and monitor short-sale transactions by hedge funds and other clients.
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Congress Weighs In On Shorts
Forbes, 27 June 2006
Former U.S. Securities and Exchange Commission investigator Gary Aguirre is slated to testify at a hearing Wednesday as the Senate Judiciary Committee takes up the issue of hedge funds and manipulative short-selling.
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‘Naked’ short selling is center of looming legal battle
Companies on the defensive seize upon an aggressive form of shorting
MarketWatch, 14 June 2006
By one contentious estimate, it’s a big problem plaguing more than 10% of stocks on the New York Stock Exchange and Nasdaq. An NYSE probe into whether naked shorting was used to force down shares of Vonage Holdings Corp. VG, +3.53% lower during the Internet phone company’s May initial public offering has added fuel to the fire. See full story.
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Overstock.com dukes it out with short sellers
The Associated Press, 12 June 2006
Most people buy stock hoping the price goes up, but hedge fund manager David Rocker was “shorting” shares of Utah-based Internet retailer Overstock.com Inc., betting the share price would decline.
Rocker’s fund was making a legal bet that Overstock shares in 2004 were overvalued and due for a correction. Overstock.com CEO Patrick Byrne, however, sued, accusing New York-based Rocker Partners of collaborating on disparaging reports with the stock-research firm Gradient Analytics of Scottsdale, Ariz., while Rocker was shorting the shares. Continue reading “Article: Overstock.com dukes it out with short sellers”