A few days later, Patrick gives his “Miscreants’ Ball” presentation. Immediately afterwards, he appears on a CNBC program hosted by Ron Insana, who was the producer of the Dateline program. Patrick says that as many as 150 to 230 million shares remain failed-to-deliver each day on NASDAQ and the New York Stock Exchange. Insana begins aggressively to cast doubts–the standard CNBC formula of attack journalism. Then Patrick becomes the first person ever to flip this formula on its head.He becomes an attack guest.
He says, “Now you worked on this for two years, Ron. And people expected a lot, and I have to say the piece you did, I thought, was rather anodyne.”
Insana appears taken aback. “Well,” he says, “you know, listen, we’re all subject to criticism and we’re all subject to he limitations of the medium in which we work…This story is not an easy one to tell, by the way, on television, if you want to get into the rigors and all the details of how a naked short-selling scheme is undertaken. When you see the allegations …they have included that individuals from Middle East entities, offshore companies, the Mob, and a whole host of other people have been involved in this…despite everybody’s expectations of an expose like that, you’ve got to be able to prove it before you say it on TV.”
Days later, at a Connecticut country club, hedge fund manager William Ackman - who was funded by the aristocrat Peretz and is connected to Gene Philips, who was rounded up with 120 mobsters in history’s biggest securities bust, is overheard talking about the “Miscreants’ Ball” presentation and allegations of short-seller crimes.
“The game is over,” Ackman says. “This is all going to get shut down.”
* * * * * * * *
March 14, 2006….Six months after the “Miscreants’ Ball” presentation, The Wall Street Journal is comparing Patrick to “Where’s Waldo,” and Jeffery Thorp of hedge fund Langley Partners has just agreed to pay an $8 million settlement to the SEC after he was found to have provided fraudulent death-spiral financing to 22 companies. As is typical in such cases, Thorp sold massive levels of phantom stock, making a net profit by intentionally destroying the companies he had financed.
Thorp is the son of Edward Thorp, who teamed up in the 1960s with a Genovese family mobster, Manny Kimmel, to develop a system for cheating Las Vegas gambling dens. Thorp Sr. authored a seminal book, “Beat the Dealer,” which outlines a method for counting cards in blackjack, and went on to run a successful hedge fund called Princeton-Newport. The younger Thorp followed his father into the hedge fund business, collaborating with the Mob-linked Amr Elgindy, who is now serving an 11-year prison sentence.
A few days after Thorp agrees to his fine (a rare enforcement action), the SEC files a lawsuit against several Refco brokers who helped the fugitive Thomas Badian sell phantom stock.The Thorp case is covered sporadically by the newswires - though with rare mention of phantom stock. The Philadelphia Inquirer runs a story describing Badian and Refco’s role in naked short selling. Some months earlier, Time magazine ran a fine story describing Refco’s role in selling phantom stock.
But from the financial media proper, there is quite literally not a word.
Barron’s magazine, for example, has yet to mention phantom stock or naked short selling. Perhaps more amazingly, it has failed to publish a single story about the collapse of Refco. Barron’s is Wall Street’s publication of record. It is read by everybody who matters in the financial world. But a giant brokerage implodes in one of the financial industry’s greatest-ever fiascos - and Barron’s runs not a single story.
It’s as if it never happened.
* * * * * * * *
But America’s leading financial journalists have been busy. In January 2006, just days after The Wall Street Journal’s glowing profile of David Rocker, Tim Mullaney of BusinessWeek emails Patrick with a list of “Just admit it - you slit your girlfriend’s throat” style questions provided to him by David Rocker. There are plenty of misinformed inquiries into Overstock’s financial condition (and a snide reference to the “non-existent illicit” past of Overstock’s VP of marketing, who is now known never to have been an exotic dancer), but Mullaney dismisses all evidence of illegal short-selling tactics. He asks whether Patrick has “ever sought care or diagnosis for any mental incapacity.”
It is pretty clear this reporter isn’t going to write a balanced story, so Patrick posts answers to Mullaney’s questions on the internet. This is the first time that a CEO has ever done such a thing - and it is about time. Why not, for once, even the playing field? But Mullaney will have none of it. He goes into a mad rage, calling Overstock and telling a receptionist that posting answers to his questions is unacceptable and that Patrick will regret it. He calls the receptionist a “bitch” and employs the c-word. To BusinessWeek’s credit, the magazine’s ombudsman/ethicist interviews the receptionist, pulls Mullaney off the story, and mails a written apology, which now hangs on Patrick’s office wall.
Then the news hits that the SEC is investigating Gradient. Herb and Cramer and all their friends flood the media with stories suggesting that this is a violation of free speech - that Rocker is a hero, a market vigilante who helps journalists uncover bad companies, that Patrick is a nut and short-sellers are good for the market. None of these stories, of course, note that phantom stock is illegal or allude to other short-seller shenanigans.
At the beginning of March, 2006, right after Herb has a nervous breakdown about the conspiracy to get Herb, Patrick gets on CNBC. He tries to tell his side of the story, but he’s shouted down by announcer Becky Quick, who previously worked as Cramer’s producer. She simply won’t let Patrick speak, so with the cameras running, Patrick holds up a handwritten sign.
It says, “TheSanityCheck.com” - the Easter Bunny’s website.
A couple days later, Patrick is back on Christian Financial Radio News - “Prosperity for God’s People” - where he at least is allowed to speak uninterrupted.
* * * * * * * *
Later that week, The Wall Street Journal’s Karen Richardson, author of the glowing profile of David Rocker, is at the bar of the Mandarin Oriental Hotel in New York, nervously picking at a bowl of peanuts and attempting to convince Patrick that she is not, in fact, a “quisling.” Really, she says, she is different from the other reporters, she’d like to write a nice profile, multidimensional, get to know the real Patrick-for the front page, like the piece on Warren Buffett. And, ha ha ha, about Patrick’s battle with Wall Street…she hardly pays attention to it.
This follows two earlier incidents with reporters working for Dave Kansas, formerly of TheStreet.com, then editor of the Journal’s “Money & Investing” section. The first occurred a year earlier when Justin Lahart, formerly of TheStreet.com, did an interview with Patrick, and then claimed that his tape recorder had broken. Patrick posted a blog noting that this was a common strategy - and, indeed, Warren Buffett had just complained about another Wall Street Journal reporter who had written a false story after claiming that his “taping equipment wasn’t working.” Lahart ran his negative story, but it read as if it had been sanitized by a lawyer.
Then, in the Summer of 2005, Jesse Eisinger, formerly of TheStreet.com, and then the “Money & Investing” section’s top columnist, appeared unannounced at a conference where Patrick was speaking. Patrick sent out word that he would agree to be interviewed, but only if Eisinger used a tape recorder. The reporter stated that he did not have a tape recorder. Patrick sent a friend to Radio Shack to buy one. In the interview, the reporter bragged about having the Easter Bunny’s phone and banking records. But he seemed nonplussed about having his conversation committed to tape, and did not write a story.
Patrick knows that Dave Kansas has sent Richardson on this latest mission. He listens patiently while Richardson picks at her peanuts and promises to be fair. Then he says “goodbye” and rushes back to his room to compose an email which is commendable for the fluency of its melancholy prose.
It says: “Someone could write that Byrne is a porcupine molester who snorts coke out of the navels of underage Thai hookers chained to tree stumps, and it would be more balanced than what The Wall Street Journal will write…”
* * * * * * * *
Patrick told Richardson that he would not cooperate with any reporter working in league with Dave Kansas and David Rocker. But Richardson, apparently intent on doing her “nice” profile, was soon calling everybody Patrick has known, including a doctor at a hospital where Patrick was treated for cancer. In yet another brush with a felony by a member of Dave Kansas’s staff, the reporter lied in an effort to gain access to Patrick’s medical records.
A hospital administrator was concerned enough to send Patrick an email.
“Dear Mr. Byrne,” it read, “As you probably know, I called your assistant, Pat, this morning in response to several (7) calls that…our chairman of the Department of Medicine received from Karen Richardson…She said…she has been working with you on this story and has several ways to reach you. She gave me your office number and said your assistant was Pat. She also gave me your cell phone number. The implication being that this was for a story/profile about you that was being done with your consent and cooperation…”
* * * * * * * *
So now Richardson is trying to commit a felony, and the Journal’s Jesses Eisinger, who stole the Easter Bunny’s phone records, has just compared Patrick to “Where’s Waldo,” and Herb is hollering about a conspiracy to get Herb, and Herb’s friend at The New York Times is writing that Patrick is “loony beyond belief,” and Cramer is vandalizing his government subpoena and continuing to bash companies shorted by Rocker, and convicted criminals affiliated with Mr. Pink and other friends-of-Cramer are smearing Patrick on the internet, and Spyro of MI4 Reconnaissance is still executing all sorts of schemes to terrorize the folks at Fairfax Financial, and Eagletech’s CEO has sent an open letter to the SEC about mobsters trying to take down his company, and the son of a Mafia-connected blackjack card counter has just been shown to have sold millions of dollars in phantom stock, and a BusinessWeek reporter working with Rocker has recently called an Overstock receptionist a “c&nt,” and Roddy-Boyd-the-Post has been sticking his head in the garbage as a favor to Gradient Analytics……
And that’s not all. Roddy-Boyd-The-Post has also just called Patrick a liar because Roddy asked how much cash Overstock had, and Patrick told him how much cash Overstock had. (Really, it is that bizarre. Listen to the voice mail.)
Patrick posts this voice mail on the internet, and a few hours later, Roddy-Boyd-the-Post calls back and issues an “apology” that is meant in fact to reinforce his earlier assertion. He says, “I want to, ehhhhh, personally and professionally apologize for calling you ehhhhh…FUCKING LIAR.”
This seems in contrast to Roddy’s assertion to me that “the problem with Patrick Byrne is that he’s a boy scout. I mean, he might be right, but why does he have to be such a boy scout. Yeah, ehhhhh, that’s the problem. Byrne’s a boyscout.”
But never mind. At the same time that Roddy-Boyd-the-Post is calling Patrick a “fucking liar,” he is sending email messages to Floyd the Flimflammer saying he needs “dirt” on Take-two Interactive, another company that Rocker has shorted - a company that has also been bashed by Cramer, Herb, and Bethany McLean, all the while appearing on the SEC’s list of companies victimized by phantom stock sellers.
And while all this is happening, Gary Weiss, the creepy former BusinessWeek reporter who has hijacked Wikipedia with a one-time MI5 agent, is orchestrating another one of his smears. In an email to Floyd the Flimflammer, he notes that I am working on this story.
He writes, “this guy [at the Columbia Journalism Review] really has me (and others of us a lot more than me) worried.”
Then Gary emails Floyd asking for some dirt on Susanne Trimbath, the former DTCC employee who has described how the Big Black Box facilitates phantom stock sales.
Just 24 hours after Gary asks for dirt on Susanne Trimbath, the DTCC issues a press release trashing Susanne Trimbath. The Big Black Box admits that Trimbath was a mid-level manager at the DTCC, but tries, in a perfectly mealy-mouthed way, to suggest that she had no knowledge of one of the DTCC’s principal functions - processing short-sales.
Was Gary on the phone with the DTCC, helping its PR goon craft this smear?
Maybe he was just looking for an ATM machine.
* * * * * * * *
There are a few journalists whom we have not yet mentioned.
One is Chris Byron, a columnist for The New York Post. Byron has insisted that phantom stock is not a problem. He has accused Patrick of being a conspiracy theorist. And he has written a column, “Gagging the Market,” in which he argues that Amr Elgindy’s prosecution for bribing FBI officials and manipulating stocks is a threat to the free speech of short-sellers and their media allies.
In April 2006, while the Media Mob is at the height of its anti-Patrick Byrne hysterics, Byron publishes a story alleging that a “CIA front operation continues to funnel agency money into penny stock and micro-cap companies in Wall Street’s murkiest back alleys.”
The only source Byron names in his story is the “tireless complainant,” Tony Ryals.
Tony Ryals lives in a hut in Guatemala. On most mornings, he walks to a nearby internet café and begins writing - sometimes for stretches of more than 24 hours. He has, indeed, become one of the most widely published human beings on the planet. It seems almost impossible to achieve such prolificacy - thousands of long-winded screeds, most of them posted on Indymedia, a collection of websites that publish anything by anybody.
The vast majority of Ryal’s rants concern Patrick Byrne. Depending on his mood, he writes that Patrick is linked to stock frauds, boiler room operations, the death of Vince Foster, Skull & Bones, Osama bin Laden, or the Israeli government.
“To see my latest,” Ryals says in a recent message board post, “You can google ‘israeli prime minister ehud olmert stock fraud orthodox jews gay prostitutes.’”
Russian Mafia Conspiracy on Wall Street in Media and Government - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 - 11 - 12- 13 - 14 - 15 - 16 - 17
