|EcommerceBytes-NewsFlash, Number 2807 - May 18, 2012 - ISSN 1539-5065 5 of 6|
Overstock CEO Patrick Byrne has been leading a campaign against the practice of short selling stocks, going so far as to sue some major Wall Street players for the harm he claims Overstock.com received as a result of the practice. This week, a lawyer for the defendants accidentally released a document under seal that appears to give credence to some of Byrne's claims.
Byrne (and Overstock.com) have spent enormous resources in the fight against Wall Street, and he has been mocked for having conspiracy theories, as when he made reference to a Sith Lord on an earnings conference call.
How big a mistake was the release of the document by the defendants?
Rolling Stone magazine wrote, "It doesn't happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank's darker secrets into the hands of the public."
Byrne sounded vindicated when writing about the mistake on the Deep Capture blog where he and others regularly critique Wall Street and financial reporters:
"In filing Goldman's response to Overstock's motion to vacate the trial court judge's decision to stay his own decision to unseal various documents related to this litigation (in more straightforward English: the trial court judge decided to unseal some documents while also deciding to delay acting on his decision, but we objected to this delay, and Goldman responded to our objections), Joe Floren screwed the pooch. He filed something containing an attachment he forgot to redact. That attachment is a previous filing of Overstock's, a filing which contains but a sample of the shenanigans at Goldman and Merrill that has turned up over the course of five years and millions of pages of discovery, but which filing we had redacted when we made it (as good litigants do)."
Several media outlets picked up the story, including the Economist, which explained the significance of the document, concluding:
"Nevertheless, the release of the e-mail excerpts will have done the brokers no favours. They suggest that trades were being intentionally failed; that some of those involved were aware regulators would not look kindly upon some of the activity; that some of the firms' internal policemen were unhappy with the explanations they received for the proliferation of fails; and that at least one senior executive appeared to have an unusual attitude towards compliance."
Byrne's full post is available on this Deep Capture page.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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Overstock CEO Patrick Byrne Takes Temporary Medical Leave - February 13, 2013
Overstock.com Launches New TV Ad Campaign - August 28, 2012
Overstock Q1 Earnings - Google Penalty Impacted Conversion - April 20, 2012