You read it here first. But if you don’t believe us, hear it from Vanity Fair instead.

In the magazine’s latest issue, released today, correspondent Byran Burrough reports that “More than a few veteran Wall Streeters believe an investigation by the Securities and Exchange Commission will uncover evidence that [investment bank Bear Stearns] was the victim of a gigantic “bear raid”—that is, a malicious attack brought by so-called short-sellers, the vultures of Wall Street, who make bets that a firm’s stock will go down.”

According to Vanity Fair, the SEC is investigating short-sellers who “employed a complex scheme to force a handful of major Wall Street firms to hold up trades with Bear, then leaked the news to the media, creating an artificial panic.”

People on Wall Street are calling this “the greatest financial scandal in history,” Vanity Fair reports.

The magazine argues, just as Deep Capture did a few days ago, that CNBC’s David Faber facilitated this scandal. The magazine describes Faber’s appalling interview with Bear Stearns CEO Alan Schwartz as follows:

Faber’s first question was a bombshell. He told Schwartz he had direct knowledge of a trader – a single trader – whose credit department had held up a trade with Bear Stearns, citing concerns about its health. At Bear, many executives gasped. It was a killer statement: Faber was saying, in essence, that Bear’s status as a trader, the basis of its business, was in question….only later did Faber say on-air the trade in question had finally gone through. But the damage had been done.

‘You knew right at that moment that Bear Stearns was dead, right at the moment he asked that question,’ a Wall Street trader of 40 years told me. ‘Once you raise that idea, that the firm can’t follow through on a trade, it’s over. Faber killed him. He just killed him.’

All in all, this is a pretty good article. But it could have done more to describe the full scope of “the greatest financial scandal in history,” noting that this scandal has touched hundreds of other companies, and that its most worrying component, ignored by the financial press, is the sale of billions of dollars worth of phantom stock. More than $60 million worth of Bear Stearns stock that was sold on the day of Faber’s bombshell was not delivered on time – no doubt because the stock did not exist.

So who provided that bogus tip to Faber? Who sold all the phantom stock? Who killed Bear Stearns?

Further down, Vanity Fair reports:

According to one vague tale, initially picked up at Lehman Brothers, a group of hedge-fund managers actually celebrated Bear’s collapse at a breakfast that following Sunday morning and planned a similar assault on Lehman the next week. True or not, Bear executives repeated the story to the S.E.C., along with the names of the three firms it suspects were behind its demise. Two are hedge funds, Chicago-based Citadel, run by a trader named Ken Griffin, and SAC Capital Partners of Stamford, Connecticut, run by Steven Cohen. (A spokesman for SAC Capital said the firm “vehemently denies” any suggestion that it played a role in Bear’s demise. A Citadel spokeswoman said, “These claims have no merit.”)

I think it’s wrong to point a finger at Ken Griffin of Citadel. My initial reporting suggests that Griffin was not even short Bear Stearns. Also, Griffin’s rivals routinely throw his name around – usually when they are trying to distract attention from their own misdeeds.

It will be up to the SEC and DOJ to indentify the true culprits, but perhaps they could start by interviewing the hedge fund managers who were short Bear Stearns. These include Griffin rivals David Einhorn, Jim Chanos, Dan Loeb (who once vowed to go “to war” against Griffin), and, yes, Steve Cohen.

As described in “The Story of Deep Capture,” all of these hedge fund managers are in some way closely connected to CNBC’s Jim Cramer. They routinely conduct gang tackles on companies, employing the services of a small, but influential group of financial journalists, most of whom are also connected in some way to Jim Cramer – himself a former hedge fund manager.

One of these reporters is David Faber, who has been close to Cramer for over twenty years. A former employee of Cramer’s hedge fund has written a book that describes Cramer routinely feeding tips to Faber and then illegally trading ahead of Faber’s reports on CNBC.

Deep Capture reporter Patrick Byrne began describing the activities of the Cramer crowd of journalists and hedge fund managers more than three years ago. I began investigating them more than two years ago.

For that, we have both been labeled “conspiracy theorists.”

Now Bear Stearns is dead. Vanity Fair has written its own “conspiracy theory.” And the SEC and DOJ are on the case.

When people start going to jail, we will know who was right.

Let’s pick up “The Story of Deep Capture” where it left off – with the demise of Bear Stearns and the near collapse of the American financial system.

It’s April 2, 2008, and CNBC reporter Charlie Gasparino has just reported that Lehman Brothers CEO Richard Fuld claims to have evidence that short-sellers, who profit from falling stock prices, actively colluded to bring down Bear Stearns.

Indeed, the SEC is already investigating precisely this possibility. The regulator has said that it would like to know whether short-sellers circulated false rumors about Bear Stearns’ liquidity and credit risk in order to spark a run on the bank. And it has announced that it is investigating allegations that hedge funds engaged in “naked short selling” to drive down Bear Stearns’ stock. This isn’t surprising considering that SEC numbers show, for example, that in the week of Bear Stearns’ destruction, up to 13 million of its shares were shorted naked – ie. sold and not yet delivered. That’s 13 million shares of phantom stock — and most experts assume there was much more of it, perhaps 100 millions fake shares, in parts of the system that the SEC doesn’t monitor.

Live on CNBC with Gasparino is reporter Herb Greenberg. Herb is a dishonest journalist. He has quite literally made a career out of taking dictation from a small group of closely affiliated short-selling hedge funds. Virtually every story he has ever written or broadcast has come from these people. He protects his hedge fund friends by repeatedly denying that phantom stock is a problem. And a former employee of a financial research shop called Gradient Analytics claims to have witnessed Herb conspiring with at least one short-seller, David Rocker, to hold his negative stories until Rocker could establish short positions. This is called front-running – a jailable offense.

CNBC is not concerned about this. Nor is it concerned that, in addition to his duties as a “journalist,” Herb is now also running his own financial research shop that caters to short-sellers. Yes, after years of denying that he has too-cozy relationships with short-sellers, Herb is now seeking to profit from those very relationships. His new company’s slogan is “bridging financial journalism and forensic analysis.” Anybody who believes that media and money don’t mix should be appalled.

Anyway, it is unsurprising that Herb is live on CNBC reporting that short-sellers had nothing to do with the demise of Bear Stearns. Instead, Herb says, Bear Stearns was taken down by a “crisis of confidence.” Could short-sellers have caused the “crisis of confidence?” Herb thinks not.

Herb says, “….if you take a look at [fellow CNBC reporter] David Faber’s reporting which was very interesting…”

* * * * * * * *

Good idea, Herb. Let us take a look at David Faber’s reporting. It was not just interesting. It was jaw-dropping – an utterly grotesque display of journalistic malfeasance.

Indeed, Faber’s reporting probably contributed a great deal to the precipitous collapse of Bear Stearns – an event so potentially calamitous that the Federal Reserve had to meddle in the investment banking sector for the first time since the great stock market crash of 1929.

On Tuesday, March 11, rumors were circulating around Wall Street that Bear Stearns was out of cash and that other banks were no longer accepting its credit risk. If anybody were to think these rumors were true, there would be panic – a run on the bank. If the rumors were false, as they quite demonstrably were, it was the job of the media to quash them.

CNBC’s Charlie Gasparino did his job. On that afternoon, he noted that there were “serious doubts” about Bear Stearns business model. He said that Bear Stearns was a “mediocre bank.” But he also noted that the rumors on Wall Street were suggesting something far worse –imminent bankruptcy–and that there was not a scrap of evidence suggesting that these rumors were true.

Gasparino quoted Bear Stearns CFO Sam Malinaro as saying “Why is this happening? I don’t know how to characterize it. If I knew why this was happening I would do something to address it. I spent all day trying to track down the sources of the rumors, but they are false. There is no liquidity crisis, no margin calls. It’s all nonsense.”

Gasparino stressed that there was no reason to doubt Bear Stearns’ claims. “I know Sam Malinaro pretty well,” he said. “He’s one of the best straight shooters in the markets.”

If Gasparino had stayed on the case, the uncertainty surrounding Bear Stearns’ liquidity and credit risk might have subsided, and the bank might have survived. But the next day, for some reason, Gasparino was taken off the Bear Stearns story, and David Faber took over.

A few rumors – even doctored memos falsely claiming that big banks had refused to accept Bear’s credit — were still circulating around Wall Street. Early that morning — Wednesday, March 12 — Faber interviewed Bear Stearns’ CEO, Alan Schwartz.

Actually, it was more like a prison interrogation than an interview. Faber demanded that Schwartz explain the rumors. Schwartz said the rumors were not true. Quite in contrast to Gasparino, Faber made it clear from his tone that viewers shouldn’t trust Bear’s executives.

Then Faber delivered this whopper: “…I’m told by a hedge fund that I know well…I’m told that [last night] Goldman would not accept the counterparty risk of Bear Stearns.”

Bang! The beginning of the end.

Understand how important this is. Previously, most people assumed that the rumors about Bear’s access to leverage were nothing more than…rumors. No reporter had suggested otherwise.

Now, for the first time – live on CNBC, in the middle of a mission-critical interview with Bear’s CEO — a prominent journalist was reporting that the rumors were true. He stated — as if it were fact – that Goldman Sachs, one of the biggest investment banks in the world, had refused to take Bear Stearns’ credit.

Faber was generous enough to note that this information came from a hedge fund “friend,” and it wouldn’t take a genius to see that this hedge fund “friend” was probably some skeezy short-seller of Bear Stearns’ stock – but still, Faber’s comment was nuclear explosive.

Soon after Faber’s comment, Schwartz is about to provide details proving that Bear Stearns is not at all illiquid – that it has ample cash (and is therefore hardly a credit risk). He says: “…none of the speculations are true, but….”

Just then, a woman’s voice interrupts: “I’m sorry! I’m sorry!”

What? Can this possibly be happening? The CEO of a giant investment bank is about to provide evidence that the bank is not insolvent – that the American financial system is therefore not on the brink of collapse. This is perhaps the most important financial news moment of the past ten years, and now CNBC has cut off the CEO in mid-sentence!

“I’m sorry,” the CNBC woman says. “David, I’m sorry breaking news, I just want you to know that we have New York state officials confirming that New York governor Elliot Spitzer will resign today. Formal resignation, we don’t have it, but it is now confirmed that the governor of New York will resign today.”

“Thanks for that not unexpected news,” says David Faber.

This was probably straight-forward idiocy – nothing more sinister than that. But you’d think CNBC could have waited a few minutes for this “not unexpected” news. And anybody with a healthy sense of irony might chuckle and point out that Jim Cramer, the former hedge fund manager who is now CNBC’s top-rated personality and basically runs the place, was Elliot Spitzer’s best friend and college roommate. The irony is all the richer when you consider that Elliot Spitzer’s career was built almost entirely on the funding and machinations of a small group of short selling hedge fund managers – including Dan Loeb, David Einhorn, and Jim Chanos (owner of the beach house where Spitzer’s favorite hooker lived rent free), and that these very same hedge fund managers are the ones who are quite aggressively attacking Bear Stearns.

Schwartz looked mighty pissed off. After the interruption, he tried to continue: “We put out a statement that our liquidity and balance sheet are strong. Maybe I should expand on that a little bit…”

“Well, yeah,” Faber interrupts. “Why don’t you.”

The reporter’s tone again suggests that the CEO is not to be trusted. Tone aside, Faber doesn’t let Schwartz answer. Instead, he launches into a long and completely irrelevant monologue about the markets generally being in bad shape.

“Well, the markets have certainly gotten worse,” says Schwartz, clearly baffled by all of this.

Then, finally, the CEO manages to provide the salient information – the information that Bear Stearns customers and traders around the world have been waiting to hear. He says, “Our balance sheet has not changed at all. So let me just talk about that for a second….When we finished the year we reported that we had $17 billion of cash sitting at the parent company as a liquidity cushion…Since year end, that liquidity cushion has virtually been unchanged. So we still have many many billions of excess cash…we don’t see any pressure on our liquidity let alone a liquidity crisis.”

That certainly should have calmed the waters. There was no evidence that Schwartz was being disingenuous about having that $17 billion. Bear Stearns might have been the crappiest bank on Wall Street, but as long as customers knew that Bear Stearns had that $17 billion in cash, there was unlikely to be a run on the bank.

Unless, that is, a “reputable” media source was to suggest that, say, Goldman Sachs, had cut off credit.

Astonishingly, in the ensuing 24 hours, CNBC never once repeats the news that Bear Stearns has $17 billion in cash. And though it repeatedly references the interview with Schwartz, the network does not once replay the CEO’s strongest comment: “We don’t see any pressure on our liquidity, let alone a liquidity crisis.”

But Faber does repeat the startling “news” about Goldman.

At 8:48 AM on Wednesday, he says, “There are a lot of concerns out there…about counterparty risk. Frankly, I’ve been hearing from people whom I trust that there are some firms out there unwilling to put on new – new — counterparty risk with Bear Stearns…You had it at Goldman…Goldman said no we’re not taking Bear’s counterparty risk – this was yesterday.”

The hedge fund manager whom Faber “trusts” was lying. Goldman was not turning down Bear’s credit. We know this because some minutes later in the broadcast, Faber says so. He says it very quickly, just as an aside, as if it doesn’t matter at all. He says, by the way, “I have heard that that trade did actually go through—Goldman did say alright, now we will accept Bear as a counterparty.”

So Faber has just admitted, in an off-handed kind of way, that he was lied to by the hedge fund he “trusts.” In other words, up until this point, there is no evidence at all that rumors being circulated by hedge funds have any merit whatsoever.

Despite this, Faber proceeds to unleash this gobbledygook: “At the end of the day, while they say over and over they have plenty of liquidity, and in fact they may, it all comes down to confidence. They need to have access to capital, access to leverage. Otherwise, they’re dead! And it can happen very quickly.”

With this, Faber looks at his computer, and says, “Let’s see where the stock is.” Then he declares with glee: “Oops! It’s down!”

So now Faber has just pronounced that Bear Stearns might be “dead!” Why might Bear Stearns be “dead?” Because, Faber says, Bear needs “access to capital” – this in the same sentence where he says “in fact they may” have plenty of liquidity (ie. access to capital). Perhaps by “may” he meant to suggest that Bear “may not” have access to capital. Either way, he carefully omits the fact that the bank has told him it has $17 billion in cash.

The other reason Bear is “dead” is because it needs “access to leverage.” Is there any evidence that it does not have access to leverage? So far, there is none other than the Goldman news, which Faber has just admitted to be a complete fabrication delivered to him by a hedge fund “friend” whom he “trusts.”

Meanwhile, in an effort to send Bear Stearns’ share price spiraling downward, hedge funds are selling tens of millions of dollars worth of phantom stock. SEC data shows that more than 1.2 million shares sold that Wednesday were not delivered on time.

It only gets worse. The next morning — Thursday, March 13 — there is still no evidence that anybody is turning away Bear’s credit or pulling out money. CNBC still has yet to repeat the all important $17 billion figure. And now, Faber is back on television, fanning the flames, and repeating the bogus Goldman news.

He says, “I talked [yesterday] about a particular trade I was aware of where Goldman Sachs did not want to stand up as a counterparty and face Bear on new counterparty risk.”

Yes, David, you did talk about Goldman – and you admitted that your information was false. Why are you repeating this?

In a stuttering attempt to explain himself, Faber says to his television audience, “Now ultimately that trade did take place [ie. Goldman did accept Bear’s credit] after my interview with Mr. Schwartz concluded, but the day prior, Goldman did not want to. I have incontrovertible proof of that.”

Right. Whatever. The SEC should subpoena Faber to find out which market-manipulating hedge fund fed him the false information about Goldman.

Of course, if the SEC were to do this, the Media Mob would go berserk and start waving the First Amendment right to protect hedge funds who take down public companies by feeding journalists false information. Remember that the SEC once tried to subpoena Herb Greenberg and Jim Cramer, only to back down after Cramer vandalized his government subpoena live on CNBC and a bunch of Herb and Cramer’s media pals rose up in their defense.

But enough of this, already. These journalists are not protecting whistleblowers or freedom of speech. These journalists cannot even properly be called “journalists.” They are, or at least aspire to be, market players. They are helping slippery hedge fund managers who are destroying public companies for profit, and putting the American financial system at risk. I’m all for real reporters standing up to federal agencies, but these “journalists” are special cases. The SEC should not allow itself to be intimidated by them.

Alas, it’s too late for Bear Stearns. On the morning of March 13, there was still no evidence that anybody had pulled money out of Bear Stearns or denied its credit, but after repeating the Goldman falsehood, Faber reported: “I remember when Drexel Burnham went down [the smarmy inference being that Bear Stearns is a crooked company similar to Drexel]…It happens fast, very fast. It happens because those who do business with a firm such as that [read: `a crooked firm’] lose confidence.”

“And when they lose confidence,” Faber continued, “they pull their lines, and that’s it. It’s done. Pack your bags. Go home. It can end in an hour.”

About an hour later, a hedge fund called Renaissance Technologies Corp., shifted $5 billion out of Bear Stearns. That was the first client to “pull its lines.” Many others followed suit.

With Faber blowing taps, panic ensued.

And by that evening, Bear was, indeed, “dead.”

Crack the Wall Street Cover-Up Contest!
You, the Community, decide who wins

1st place = $30,000
2nd place = $20,000
3rd place = $10,000
4th place = $6,000
5th place = $4,000
6th - 10th place = $1,000 each
Total = $75,000

From “The Story of DeepCapture” (see button in upper right-hand corner of site) you understand the crime and cover-up. Now you can win up to $30,000 for thinking of a clever way to crack the cover-up. Here’s how:

1) Crack the Wall Street cover-up: do something to help the public discover DeepCapture’s exposé of Wall Street and the financial journalists who “tried to be players but became pawns.”

2) What you do is your choice: you may simply write newspapers and politicians (here is a page providing ways to do that quickly and easily), and get others to do the same. Maybe you’ll do some PR stunt (such as this). Maybe you’ll write letters to the editor, or do Youtube videos, or think of something entirely new and original (we hope you do).

3) Whatever you do must be legal.

4) Tell us what you did, using the widget at the bottom of Mark Mitchell’s story. That becomes your entry. Your entry can and should link to blogs, videos, audio files, letters to the editors, newspaper articles, etc. that document your efforts to crack the cover-up.

5) Multiple entries are allowed.

6) To crack the cover-up you may find it useful to learn more about this issue. The links within Mitchell’s piece are a good starting point. More detailed pieces appear on DeepCapture.

7) The community will determine the winners by continuously voting entries up and down.

8 ) At midnight, October 31, 2008, entries will be frozen and prizes awarded.

9) This contest is scheduled to run until midnight, Utah time, October 31, 2008. However, it is an experiment and, like all experiments, runs the risk of producing unanticipated pernicious consequences. Therefore, in case some ill begins arising that we had not foreseen, we reserve the right to bring the contest to an early conclusion. If we do, we will give 7 days’ notice: when those 7 days are up, the entries will be frozen, and prizes paid based on the ranking of answers at that moment.

10) This list of rules may (and likely will) be amended. Why? Because this contest is an experiment. There may be some way to game it that we have not anticipated (”gaming” means “bending the rules in an attempt to win without doing the hard work of creating the public awareness of Mitchell’s story which the contest is supposed to measure”: for example, trying to hack the voting mechanism). Therefore, in case we discover people gaming it in some way, we reserve the right to modify the rules in midstream. We will not be capricious (e.g., amending the rules merely to handicap someone who had gotten ahead), but would do so only to protect the integrity of the contest for all participants. We’re the good guys. By entering the contest, you acknowledge this right and express your willingness to submit to our sense of fairness in these matters.

If you have questions about the contest, please post them as comments to this post. We will answer. But please review everyone else’s comments to see if your question has been answered, before you post another.

Good luck,
Patrick M. Byrne, PhD
Deep Capture Reporter

One of these men is a reporter.

One of these men is a bootlick nervously fighting the exposure of those for whom he shills.

See if you can spot the difference.

“Fate often saves the undoomed warrior when his courage endures.” - Beowulf

The list of villains implicated by Deep Capture’s analysis is seemingly endless, but the list of institutions which have failed our nation is not. They can be spoken to. They can be made aware of how you have lost confidence in them. They can be told how much they suck.

That list of institutions begins with the broker-dealers who enable hedge fund crookery in return for profitable prime brokerage business. Then comes the Self-Regulatory Organizations (”SRO’s”) who have direct responsibility for preventing crimes such as this from happening. Then comes the regulators (SEC) charged with supervising the SRO’s. Next comes Congress, which has failed ito provide the SEC proper political oversight. Last, but most importantly, comes the Free Press, our public realm’s ultimate watchdog, which has been licking its crotch instead of doing its job.

If you accept the analysis of DeepCapture, then you should let these groups know what you think of their work. Please be courteous and polite: I have been abrasive enough for all of us. You need only tell them that you are concerned about naked short selling and think they should be doing something about it. You might even abbreviate it by simply sending them emails that say, “DeepCapture.com”. They’ll know what you mean.

THE BROKER-DEALERS
Call these brokers and tell them what you think of their conduct:

Goldman Sachs says: “This policy is designed to provide a channel of communication for employees and others who have concerns about the conduct of Goldman Sachs or any of its people……….” 1 (866) 520-4056 You might also give a ring to their press contact: 212-902-1000/5400

Morgan Stanley’s “Integrity Hot-line” says: “Concerns relating to ethical or business conduct matters, including accounting, internal accounting controls or auditing matters, may be brought to the Company’s attention” at 866-448-8434

Bear Stearns has no readily discoverable “Integrity Hotline” so just call their press person, Elizabeth Ventura (212) 272-9251, and tell her what you think.

THE SELF-REGULATORY ORGANIZATIONS (SRO’S)

It may be hard to believe, but our capital market is not really set up with a cop on the beat. It is set up as a number of clubs (such as AMEX, NASDAQ, and the New York Stock Exchange) which publish their own rules. The federal government’s role is to OK those rules, then come along and inspect whether clubs are following the rules they publish. That’s it.

The clubs are called, “Self-Regulatory Organizations”, or “SRO’s”. The SRO’s keep an eye on Wall Street in precisely the same sense in which, in a Tijuana cat-house, the guys with the mops and buckets can be said to be “keeping an eye on the place”.

Recently two of the SRO’s (the ones overseeing NASDAQ and NYSE) merged together and become the “Financial Industry Regulatory Authority” (”FINRA”). Contact FINRA’s Office of the Ombudsman at (240) 386-6270, or toll-free at (888) 700-0028, and tell them to get bigger mops.

THE REGULATORS

There is a night watchman who walks around tapping on windows and calling out to the mop-boys, “Is everything all right in there?” and “Keep it down in there!” and “Are you guys hiring?” That watchman is The United States Securities and Exchange Commission. Please do not be too hard on the SEC. They are underpaid, over-worked, have no budget, and are lawyers. They are so far behind the whiz-kids they are supposed to be regulating that getting mad at them is like getting mad at someone for not knowing how to play the trombone (if someone does not know how to play the trombone, he just doesn’t know, and no amount of yelling at him is going to make him know).

That said, if you want to let the SEC know how unhappy you are with the service they are providing you as a citizen, then write their Inspector General, H. David Kotz ( oig@sec.gov ). Incidentally, I understand that IG Kotz is part of the solution, not part of the problem. He was an attorney for the Peace Corps and, as the newly-minted OIG at the SEC, is more concerned about fixing things than he is about getting a job on Wall Street. So be polite, but let him know you care about this problem.

Another place you can turn is the United States Government Accountability Office. The GAO is probably the most respectable group in DC (setting aside the military). When Congress needs a non-partisan, no-bullshit answer to any question, they turn to the GAO. Write Chuck Young at youngc1@gao.gov and let him know about your interest in naked short selling and the general issues raised in DeepCapture.com.

THE UNITED STATES CONGRESS

Many years ago I had occasion to visit Congress a half-dozen times. In the last few years I have again made a fair number of visits. In both periods I came away shocked: by and large these folks are good people, and they really do understand that they work for you. Every letter that a citizen sends is read by someone. Tallies are kept of the concerns that citizens express, and these tallies are synthesized for members of Congress.

In other words, that stuff you learned in 8th grade civics class actually is true: you can make a difference by writing your representatives. This site makes it easy to do so in seconds.

You can also focus on the House Financial Services Committee’s members by using this form.

You can focus on the Senate Banking Committee members by using this form.

Again, be polite and courteous, please.

THE PRESS

The New York Financial Press

My deepest disgust is reserved for the New York financial press. Here is why. Crooks are always going to be crooks. Professions are always going to be clubbish, looking out for their own. Regulators are always going to be captured (at least a little bit). Most politicians will always dance for the organ-grinders. But the press is supposed to be sacred. These phony journalists are, to me, like dirty cops, or pedophile priests. They are like the Washington press corps in the days before Watergate, too chummy with those they are supposed to be covering to do serious investigative work. Our nation suffered for it then, and is again now. Every time I catch a glimpse of Herb, Roddy, Bethany, Joe Nocera, Carol Remond, Jim Cramer, Joe Kernan (or for that matter, CNBC), I throw up a bit in my mouth. They are corrupt yellow-bellies. They are toadies to power and authority. They are sellout journalists.

If you agree, tell the NY financial press, “You should stop covering-up the naked short selling scandal on behalf of your crooked hedge fund pals.” Or, again, just abbreviate that by saying, “DeepCapture”.

editors@barrons.com; steve_adler@businessweek.com; info@cnbc.com; letters@fortune.com; nytnews@nytimes.com; nywireroom@dowjones.com

And by the way, you should draw their attention to the recordings of their luminaries Joe Nocera, Dan Colarusso, and Roddy Boyd that appear about 7/8 of the way through Mark Mitchell’s piece. They’re pretty special.

Roddy angry that when he asked how much cash we had, I tricked him by telling him how much cash we had
Roddy Boyd fucking apologizes
Dan Colarusso, Paragon of Journalistic Integrity
Herb “See No Evil” Greenberg
Joe Nocera, Anti-Investigative Journalist

The US Business Press

The business press outside of New York is not as bad. Many of them know that something deeply problematic is happening on Wall Street, yet they still take their lead from those whose beat is Wall Street. That makes them foolish, but not evil. Perhaps there are other dynamics at play as well. In any case, here are the emails of the business editors of dozens of top US newspapers. Politely let them know your concern with naked short selling, and with the general issues raised in DeepCapture.com.

lpantages@thebeaconjournal.com; tubusiness@timesunion.com; mmurphy@abqjournal.com; mike.hirsch@mcall.com; business@azstarnet.com; kathy.tulumello@arizonarepublic.com; business@app.com; danason@ajc.com; kwarbelow@statesman.com; businessnews@baltsun.com; biznews@bhamnews.com; solomon@globe.com; business@bostonherald.com; gpotter@buffnews.com; obsbiz@charlotteobserver.com; jkane@dailyherald.com; dmiller@suntimes.com; DGreising@tribune.com; business@enquirer.com; podonnell@plaind.com; rcarter@dispatch.com; avoros@bayareanewsgroup.com; businessnews@dallasnews.com; mirby@daytondailynews.com; business@denverpost.com; lhicks@dmreg.com; business@freepress.com; biz@detnews.com; aportela@herald.com; paul.mattson@jacksonville.com; biz@star-telegram.com; business@fresnobee.com; ncrawley@grpress.com; tbarstow@patriot-news.com; dhaar@courant.com; dbutts@honoluluadvertiser.com; laura.goldberg@chron.com; steve.berta@indystar.com; clester@kcstar.com; business@knews.com; mhiesiger@reviewjournal.com; jbeach1@herald-leader.com; dnbiz@dailynews.com; bizletters@latimes.com; businessnews@courier-journal.com; joverstreet@commercialappeal.com; business@miamiherald.com; jsbiz@journalsentinel.com; ewieffering@startribune.com; kturner@mobileregister.com; dfisher@tennessean.com; money@timespicayune.com; swenger@edit.nydailynews.com; dgreenfield@nypost.com; bizday@nytimes.com; business@starledger.com; nsommers@dailypress.com; bizandtech@newsday.com; donnellon@northjersey.com; cbunyan@oklahoman.com; ghall@ocregister.com; businessnews@orlandosentinel.com; pbbusiness@pbpost.com; wwarren@phillynews.com; tgnoffo@phillynews.com; smassey@post-gazette.com; business@tribweb.com; business@news.oregonian.com; jkostrze@projo.com; mary.cornatzer@newsobserver.com; pfeibish@timesdispatch.com; rob.johnson@roanoke.com; erosen@DemocratandChronicle.com; reuteman@rockymountainnews.com; canderson@sacbee.com; mlimon@sltrib.com; blehman@express-news.net; financial@uniontrib.com; business@sfchronicle.com; business@mercurynews.com; tappel@pressdemocrat.com; margarettaus@seattlepi.com; business@seattletimes.com; alvasquez@sun-sentinel.com; scottm@spokesman.com; ekohn@post-dispatch.com; diverson@pioneerpress.com; biznews@sptimes.com; mmorelli@syracuse.com; marcelene.edwards@thenewstribune.com; mguidera@tampatrib.com; business@theblade.com; john.stancavage@tulsaworld.com; dcarroll@usatoday.com; bill.choyke@pilotonline.com; nywireroom@dowjones.com; beyersd@washpost.com; dhoneycutt@washingtontimes.com; mbieger@lohud.com; tgbiz@telegram.com

The General US Press

It is easy to criticize the general American press for having ignored a crime that affects citizens in every town in America. You may be surprised to learn that I do not join that criticism, for three reasons. First, this is a fairly technical issue, beyond the skills of most journalists to cover: To write about it one needs a grounding in economics, as well as general knowledge of our capital market, that most journalists do not possess. Second, any journalist getting interested in this would have to contend with a gigantic smokescreen blown by their captured New York colleagues. Third and last, any such journalist would have to contend with pressures brought from above. Taken together, it would have taken modern day Woodwards and Bernsteins to punch through the misdirection that was, until recently, the norm.

That said, now that the heavy lifting is done, and even the CEO’s of banks are themselves taking up the cudgel, there is no longer any cover-up to which to cling. Thus it would be shameful indeed of the general press to remain silent at this point. The general press can at least describe to the public what has finally come to light through efforts other than their own. If you agree, let them know about naked short selling, and Deep Capture, using the email addresses of editors at more than 100 newspapers and news organizations in the United States:

bwinges@thebeaconjournal.com; tucitydesk@timesunion.com; kwalz@abqjournal.com; news@mcall.com; citydesk@azstarnet.com; newstips@arizonarepublic.com; editors@app.com; newstips@ajc.com; news@statesman.com; businessnews@baltsun.com; tscarritt@bhamnews.com; localnews@globe.com; citydesk@bostonherald.com; citydesk@buffnews.com; localnews@charlotteobserver.com; news@dailyherald.com; mcooke@suntimes.com; ctc-editor@tribune.com; tcallinan@enquirer.com; sgoldberg@plaind.com; bmarrison@dispatch.com; ccnnewsrelease@bayareanewsgroup.com; metro@dallasnews.com; kcanfield@daytondailynews.com; newsroom@denverpost.com; metroiowa@dmreg.com; dfpcity@freepress.com; jon.wolman@detnews.com; perspectiva@elherald.com; frank.denton@jacksonville.com; newsroom@star-telegram.com; metro@fresnobee.com; mlloyd@grpress.com; citydesk@pnco.com; julien@courant.com; mplatte@honoluluadvertiser.com; citydesk@chron.com; newstips@indystar.com; levings@kcstar.com; news@knews.com; sertado@reviewjournal.com; hlnews@herald-leader.com; dnmetro@dailynews.com; national@latimes.com; bpost@courier-journal.com; metro@commercialappeal.com; nationalnews@miamiherald.com; gstanley@journalsentinel.com; dtice@startribune.com; newsroom@mobileregister.com; local@tennessean.com; citydesk@timespicayune.com; news@edit.nydailynews.com; enorton@nypost.com; nytnews@nytimes.com; metro@starledger.com; bstertz@dailypress.com; news@newsday.com; newsroom@northjersey.com; ekelley@oklahoman.com; local@ocregister.com; editor@orlandosentinel.com; pb_metro@pbpost.com; josephg@phillynews.com; nationaldesk@phillynews.com; letters@post-gazette.com; fcraig@tribweb.com; newsroom@news.oregonian.com; pjnews@projo.com; metroeds@newsobserver.com; news@timesdispatch.com; news@roanoke.com; editor@democratandchronicle.com; editor@rockymountainnews.com; metro@sacbee.com; pegmcentee@sltrib.com; rrivard@express-news.net; jeff.rose@uniontrib.com; metro@sfchronicle.com; nation@mercurynews.com; bswofford@pressdemocrat.com; citydesk@seattlepi.com; newstips@seattletimes.com; emaucker@sun-sentinel.com; news@spokesman.com; tpoor@post-dispatch.com; news@pioneerpress.com; national@sptimes.com; mconnor@syracuse.com; newstips@thenewstribune.com; trib_news@tampatrib.com; kfranck@theblade.com; news@tulsaworld.com; kpaulson@usatoday.com; katrice.franklin@pilotonline.com; nywireroom@dowjones.com; national@washpost.com; jweber@washingtontimes.com; metro@lohud.com; newstips@telegram.com; support@abcnews.go.com; info@ap.org; release@bloomberg.net; talkback@business2.com; evening@cbsnews.com; ctc-editor@tribune.com; csmnewsdesk@csps.com; public.information@cnn.com; drudge@drudgereport.com; pr@fastcompany.com; readers@forbes.com; letters@fortune.com; americasnewsroom@foxnews.com; ibdnews@investors.com; metrodesk@latimes.com; sfoxwell@npr.org; Today@NBCUNI.com; nytnews@nytimes.com; newsahead@msn.com; editors@newsweek.com; nathan@pacifica.org; letters@time.com; letters@usnews.com; pressreleases@upi.com; theforum@usatoday.com; nywireroom@dowjones.com; metro@washpost.com; jweber@washingtontimes.com

WHAT YOU MIGHT SAY

In contacting these parties please be courteous at all times. Most of them have themselves been taken in by a cover-up, or perhaps, are overwhelmed by the complexity of this fight. Give them this: it is pretty mind-blowing, and their decision to sit it out was, until recently anyway, understandable.

You do not have to say much. Just let them know that you are following the financial scandal known as “naked short selling” and think they should follow it too. Feel free to quote as much material as you want from the DeepCapture website. Many links are included within DeepCapture to stories that have appeared (the Bloomberg video, Forbes articles, etc.) so you should have no trouble sending supporting material, if you so desire.

Of course, you can always just copy Mark Mitchell’s story and send it to them (again, everyone is welcome to copy and redistribute DeepCapture’s material freely, and we waive all copyright claims). Mitchell’s piece pretty much says all that needs to be said, and coming as it does from a seasoned investigative journalist, may be just what other journalists need to get the scent of this story.

The Society of American Business Editors and Writers, SABEW, is the professional association for journalists who cover business. While most members I have met are normal, straight-thinking people, as a group they have been led around by the nose by a tiny group within SABEW which covers the hedge fund beat. Because those dozen or so reporters are captured, they have more or less engaged in a cover-up on behalf of the hedge funds who are their best sources (and whose names come up again and again wherever companies are manipulated through phantom stock). Because those dozen reporters on the hedge fund beat derided, spun, and downplayed the issue, the other members of SABEW followed suit, if they mentioned the issue of naked shorting at all. Now that those dozen or so reporters are keeping their heads down, the other members of SABEW across the country seem at something of a loss.

This was not unanticipated. It seemed to me that their analysis would run this way:

A) “If people read DeepCapture and see that we have not responded, they will assume it must be correct. Thus we should answer it.”

B) “If we answer DeepCapture we have to mention it. If we mention it, people will go there and read it. If they do, they will see that Byrne has us dead-to-rights. So we better not mention it.”

Perhaps from indecision and risk-aversion, perhaps as a calculated gamble, they have chosen Strategy B over A.

The surreality of this is in their reaction to Deep Capture (or should I say, their non-reaction). For several years I knew that if I changed the part in my hair I’d see a story on it by at least one of Carol Remond, Roddy, Jim Cramer, Joe Nocera, etc. Herb once wrote a blog about how quickly or slowly I replied to his emails. They would dive after any crumb I dropped and race to be the first to distort or lie about it. Now, however, I am not serving crumbs, but have a smörgåsbord laid out for them. I have created a website devoted to these issues, and written dozens of pages on various aspects of it, and Mark Mitchell has published a novella on the issues raised in DeepCapture. Yet the Cone of Silence has descended. They could write articles trying to distort DeepCapture, of course, but to do so they would have to mention it, and they know they cannot suffer the exposure. Hence, the Cone of Silence No mentions are made of my fight, because at this point, mentioning me without mentioning DeepCapture itself would strain what remains of journalistic integrity among this crew. I really cannot see any other explanation that explains their silence on this now, but their indefatigable attention before DeepCapture came into existence.

As I said, this reaction was not unexpected. I judged it their most likely reaction, and planned accordingly. My plan is to raise the heat on them in their frozen state, slowly, until something cracks.

First, I have barely done anything to get DeepCapture attention: it gets about 700 to as high as 4,000 unique visitors per day. That is starting to be an uncomfortable number of people for SABEW to write off, knowing that they are reading these well-documented deconstructions and hearing no reply at all from the Establishment press. Not only does that raise the heat on them now, the smarter ones among them must anticipate that, any day I want, I can start getting 100,000/day to this site.

Some SABEW members may take comfort in this excuse: “If all of this blows up, and Byrne turns out to be right, I can always say that I had not heard about it.” To forestall that line of thinking, Stormy hired a van to go to a SABEW conference in Baltimore. On its side were revolving signs concerning DeepCapture, asking, “Are you a captured journalist?” The driver of the van talked his way into parking on the front steps of the conference for 2.5 days. That is, for 2.5 days, 2,000 business journalists who walked in and out of the SABEW conference were confronted by that van.

That was to turn up the heat on their dilemma another notch.

And now, la pièce de résistance: here is a video that shows the DeepCapture van at SABEW.

(If the video does not play, try this: http://video.google.com/videoplay?docid=-2263598269499775991&q=deep+capture&ei=s49YSL2LM4vQ4AKEneiuDw ).

Not everyone in SABEW can be as dopey as, for example, Roddy Boyd sounds. Within SABEW there must be some who understand how this intensifies their dilemma. Simply put, if the claims of DeepCapture prove to be right, then books will someday be written about this scandal. Those books are going to have to deal with the clear evidence that the members of the Society of American Business Editors and Writers were told about naked short selling. The research was done for them, and the data was provided to them. In fact, they had their nose rubbed in it. I can assure you from examining our IP logs that the major news organizations are reading DeepCapture. Yet they refuse to report on it.

To understand the significance of that, imagine if it turned out that for years before Enron imploded, Enron’s malfeasance had been fully understood for years by a group of journalists, but none had reported on it. The profession would be seen as having taken part in a cover-up. Similarly, in this case, the journalists on the hedge fund beat will be seen as having taken part in a cover-up, and allowed to do so by the completely incurious fellowship of SABEW.

Thus, not reporting on this scandal is a dicey decision for members of SABEW to take. A group of journalists refuse to report on a crime, even after it has become widely acknowledged by regulators, legislators, and economists. If they maintain the Cone of Silence, they are making a bet-the-ranch decision that the crime never becomes a widely-understood scandal. Yet if they report on it, they know that the public will begin reading DeepCapture, and will begin making their own evaluation about the work of these shill journalists.

I’m content to let our work here on DeepCapture stand on its own against Cramer, Nocera, Bethany, Herb, Roddy, and Carol. It appears they are not, for they have suddenly acquired laryngitis about me and my “wacky” theories. I do not envy the decision they are their SABEW colleagues face. There must be some among SABEW who understand that saying nothing about DeepCapture, while once the risk-averse bet, now carries with it a higher degree of risk than saying something. We are getting closer to checkmate.

That said, three final moves will bring the coup de grace. Stay tuned.

In late 2005, I spent over four hours interviewing Overstock.com CEO Patrick Byrne as part of a podcast series on entrepreneurship I created.

After I published the audio of the interview, somebody posted a link to it on the Yahoo Finance message board dedicated to Overstock.com.

Seeking the origin of the resulting surge in downloads led to my first stock message board visit.

It was really strange.

What first struck me was the flurry of responses to the original posts in which users with foul mouths and bad attitudes warned that the linked mp3s contained computer viruses.

Of course, no mp3 has ever carried a virus, as I’m fairly certain the posters knew.

These were followed up by all manner of lies meant to discourage others from listening to any of the three Byrne interviews I would eventually publish.

Worse, they posted all manner of lies about Patrick Byrne personally – something I was in a unique position to recognize having just interviewed him at length.

Intrigued, I started examining the posting histories of the most prolific sources of this disinformation, trying to identify patterns that might in turn reveal their underlying motives and, often enough, their real identities.

Well over two years later, I remain engaged in the same pursuit. And, to be frank, I suspect that by now, I understand it better than anybody else, largely because of a few methods I’ve developed and the great amounts of information I’ve received from others.

What follows is a little bit about what I’ve learned.

First: just as there are dishonest people paid to post lies on stock message boards for the purpose of artificially boosting share prices, there are also bad people paid to post lies on stock message boards for the purpose of artificially lowering prices.

In the case of the latter, they are either paid outright as contract “stock researchers”, or paid in put options (which increase in value as a company’s stock drops in value).

Second: make no mistake, it’s short-biased hedge funds who are paying these stock “bashers” (as they’re often called).

Third: in some cases, it’s actually the managers of these short-biased hedge funds doing the bashing.

Consider the following notable example.

I’ve previously written about evidence received demonstrating that hedge fund Third Point, LLC contracted with convicted stock fraudster Michelle McDonough, whose duties included coordinating the efforts of message board bashers and inducing certain captured journalists to report negatively on targeted companies.

I’ve also written about Third Point founder Daniel Loeb’s well-known history of posting on the Yahoo and Silicon Investor stock message boards under the alias Mr. Pink.

Before getting to the rest of the story, here’s some background.

About the same time I first visited Yahoo Finance, a company called SFBC International (now PharmaNet Development Group) came under a blistering attack by Daniel Loeb, who very publicly announced Third Point’s sizeable short interest in the company.

SFBC got hit from all sides, and its share price withered.

In particular, there was a deluge of libelous (though tame compared to others I’ve seen) posts to Yahoo’s SBFC message board. Most notable were the attacks leveled against then-SFBC Chairwoman and President Lisa Krinsky.

Krinsky responded by filing a lawsuit against ten anonymous posters: Does 1 through 10.

In order to discover the identities of the ten Does, Yahoo was served with a subpoena.

In accordance with policy, Yahoo alerted the posters, giving them two weeks in which to contest the subpoena – an expensive proposition few bashers have the financial ability to pursue.

And indeed, none of the ten Does opted to put up a fight.

With one exception: Doe number 6, known on Yahoo Finance as Senor_Pinche_Wey (which is a slang Spanish term that is as obscene as you can imagine).

A typical post by Senor_Pinche_Wey reads:

“…I will reciprocate [fellatio] with Lisa [Krinsky] even though she has fat thighs, a fake medical degree, “queefs” and has poor feminine hygiene…”

Doe-6 fought the subpoena, was rejected, and appealed to California’s Sixth Appellate court.

Clearly, Doe-6 had some resources backing him up…to say nothing of a deep motivation not to be exposed.

And, fortunately for Doe-6, his appeal was successful and the subpoena was quashed.

This decision – handed down in February of this year – essentially affirms the First Amendment rights of message board bashers to say whatever they want about the officers of public companies. (An excellent analysis of the decision can be viewed here.)

In their decision, the Court noted:

We likewise conclude that the language of Doe 6’s posts, together with the surrounding circumstances — including the recent public attention to SFBC’s practices and the entire “SFCC” message-board discussion over a two-month period — compels the conclusion that the statements of which plaintiff complains are not actionable. Rather, they fall into the category of crude, satirical hyperbole which, while reflecting the immaturity of the speaker, constitute protected opinion under the First Amendment.

Interesting.

Ready for the other shoe to drop?

I’ve learned, through multiple sources, that the immature speaker in this case, Doe-6 (aka Senor_Pinche_Wey) was none other than Daniel Loeb himself.

As a matter of fact, Senor_Pinche_Wey is one of many abusive message board identities used by Loeb to harass officers of companies Third Point was shorting, often illegally.

On August 12, 2005, Patrick Byrne first publicly accused several hedge funds of working in coordination to illegally manipulate the share price of Overstock.com and many other small, public companies. Within 48 hours, armies of bashers arrived for the first time on the Overstock.com stock message boards across the web, all working off of a the same obvious set of talking points. Among the points these bashers took the greatest care to make, time and again: that Byrne was crazy for thinking that any two hedge funds would ever work together when shorting.

In case there are any doubts left regarding Byrne’s claims, I invite you to look at this message board exchange, between Senor_Pinche_Wey, LaseriumQueen, bobbingbargains, disgustedinvestor, kidstockjoec, jidoo, and Polytechnic_Trader.

What makes it so interesting is that at least 72% of the participants are hedge fund managers shorting the company they’re smearing.

Specifically, Senor_Pinche_Wey belongs to Daniel Loeb, while LaseriumQueen, bobbingbargains, disgustedinvestor, and kidstockjoec all belong to Robert Chapman, founder of hedge fund Chapman Capital.

Polytechnic_Trader and jidoo may or may not belong to Loeb or Chapman…I don’t know either way.

I do know that Chapman also posts under the aliases tautologicaltrader, ghaulty_lodgick, notably_absent, and herniatedgorilla – all of which can be seen, time after time, posting things I’m quite certain Chapman would not dare say in person.

Do hedge funds coordinate their attacks?

Yes.

And as you’ll read in a soon-to-be-published-post, message board bashing is only the beginning.

What seems to bother critics of AntiSocialMedia.net more than anything else is their inability to disprove the things written here.

That’s because AntiSocialMedia.net deals in facts. Period.

Often, having made my case, I’ll take the additional step of drawing conclusions based on the facts. It’s never easy leaving the comfort of what I know to be true for what I suspect is true — particularly when reputations are involved. Yet, with a single (quickly rectified) exception, every conclusion extrapolated here has proven accurate.

And, in at least one case, my conclusions have proven much more accurate than even I could have anticipated.
To learn more about that case, let us return to June of 2007.

At that time, I concluded that convicted stock manipulator Sam Antar and securities class action litigator Howard Sirota were working in concert with convicted stock manipulator Barry Minkow’s Fraud Discovery Institute (FDI) to manipulate the share price of USANA, a public company.

You can review my reasoning (which, I urge you to keep in mind, Sam Antar characterized as being “filled with deception, innuendo, deflection, insensitivity, and arrogance”) here.

Many things have happened since the post was published, most notably the deposition of Minkow, whom USANA is suing for reasons that I expect will soon appear obvious. You may access the deposition transcript, in two parts, here and here.

In his deposition, Minkow confirms that to say he and Sam Antar were “doing business together” was the understatement of the fiscal year.

Minkow states, under oath, the following:
At some point in the past two or three years, Sam Antar came to be a “spiritual advisor” to Minkow. But unlike a traditional spiritual advisor, Antar didn’t ask for money…he was handing it out.

According to Minkow, in mid-2006, Antar sent him, unsolicited and with no strings attached: $100,000. This was Antar’s way of saying: “Thank you…you’ve been an example for me that you can come back from failure.”

Shortly thereafter, and by pure coincidence, Minkow decided to use Antar’s money to finance FDI’s attack on USANA, which was published and delivered to the SEC on February 20, 2007 (precisely the same day as Minkow’s second book was published), but not before Minkow established a short position in USANA stock, as well as investing in put options (both of which gain value as a stock loses value).

Minkow says that in total, Antar’s support for FDI has exceeded $250,000.

Additionally, Minkow disclosed two payments totaling $40,000 by hedge fund manager (and frequent Herb Greenberg advisor) Whitney Tilson, and $10,000 by Anthony Bruan, owner of Cactus Capital.

Remember Howard Sirota? Bruan is a long-time Sirota law client, dating back to some high-profile scrapes with the securities laws in 2001.

Sam Antar is also a long-time client of Howard Sirota’s law practice.

For those of you keeping score at home, that means at least $260,000 – nearly 90% – of the disclosed $300,000 used to finance FDI’s attack on USANA, came from associates of Howard Sirota, who makes a living leading shareholder lawsuits against public companies, à la Milberg Weiss.

Here’s where things get strange…
Consulting public records, I discovered that on February 27, 2007 (seven days after FDI’s USANA report was released), the New York State Department of Taxation and Finance issued a warrant for unpaid taxes against Sam E. Antar, in the amount of $473.15.

A bankruptcy attorney I consulted with on this issue cautioned that from time to time these warrants are filed erroneously. Hoping to rule out that possibility, I conducted a deeper search and discovered that unpaid taxes are nothing new to Sam Antar. Indeed, between 1987 and 2007, Antar amassed over $333,000 in tax liens, warrants and judgments on the city, state and federal levels, in addition to just under $60,000 in judgments and liens by private creditors in 1992 and 1993.

None of these debts was discharged by Antar’s Chapter 7 bankruptcy filing in 1998.

My point being, Sam’s history suggests this most recent – and nearly one year later, unsatisfied – tax warrant was not the result of an error.

And yet, from Minkow’s deposition, we’re supposed to believe that someone who can’t pay a $500 tax bill is in a position to give Minkow gifts totaling at least $250,000 – motivated by nothing more than the spirit of fraud fighting?

As noted in my earlier post on this topic, Howard Sirota was caught bashing (though in an unusually civil manner, to his credit) USANA stock on Yahoo Finance under the screen name StanleySargoy. In his first such post, dated April 14, 2007, Sirota declares (and Minkow’s deposition later confirms) that Sirota was shorting USANA stock, in addition to being long USANA put options.

Interestingly, five trading days later, USANA appeared on the Reg SHO Threshold Securities list for the first time.

Whether or not Sirota’s short position was a legitimate one, this post to Yahoo Finance by StanleySargoy in 2003 shows Sirota’s clear understanding of the relationship between public perception of a company and its share price, and of the value of using the media and other venues to spread negative information specifically for the purpose of lowering share price.

Based on these facts, I am led to conclude:

1. Sam Antar’s $250,000 “gift” wasn’t a gift, but the cost of a commissioned, negative report on USANA, intended to adversely impact USANA’s share price.
2. The money Antar gave Minkow wasn’t Antar’s at all. I suspect it belonged to someone else using Antar as an intermediary.
3. In addition to shorting USANA, Sirota likely intended to lead one of the (several) class action suits brought against the company in the months following release of Minkow’s report. That he did not do so just might be a consequence of his having been identified as StanleySargoy in this blog.
4. Finally, but likely most importantly, is my belief that this is a clear case of illegal stock manipulation.

If this sounds implausible, please remember that it is precisely the sort of activity Sirota’s counterparts at the law firm of Milberg Weiss are accused of engaging in. To learn more, you may either read this 105 page indictment of Milberg Weiss, or (as I would recommend) invest a few minutes watching an excellent presentation explaining how this sort of thing is happening on a broader scale than you could possibly imagine.

Please understand that I have no interest in “exposing” Linda Mack. SlimVirgin is, however, another matter, given the role she has played in facilitating massive distortions not only about me but many, many others in her role within Wikipedia.

From 1988-1990 I was a philosophy graduate student at King’s College, Cambridge, England. Like most colleges at Cambridge, King’s had its own student pub, just off the dining hall, within which students would congregate at the end of their days’ studies. Within the pub, intersecting social circles formed, broke apart, and reformed. One such circle was of philosophy grad students. I was located on the periphery of that group.

Within our college was a fine American fellow named Julian, a Yale lad who was doing some advanced graduate work at Cambridge. One day Julian and I had a pint and he told me about his work, which was in an area related to some work that had interested me two summers earlier. I knew just enough to follow him as he described his research program, which struck me as being quite leading-edge (it had something to do with using neural networks to discover patterns in speech). I remember being struck by Julian as being extremely bright, mature and thoughtful. Whatever is the antonym of “frat-boy,” that was Julian, in a way that made quite a vivid impression on me.

There was another student, a Canadian woman named Linda who was also on the periphery of this social circle, but at opposite edge of the periphery. She tended to come to the pub in beautiful gowns that would not be out of place in a Dickens novel. I would describe the energy between us as intense, but I never could tell if she liked me, or intensely disliked me (probably the latter). Halfway through the term she started speaking with an English accent that seemed pretentious, but she explained that she had had one English parent (her mom, I think), and had grown up switching between English and Canadian accents (an explanation that is more reasonable than it sounds: I can believe it). Over time, I believe we all learned to tread carefully around her, as she was not open to the normal jibing and sparring that to the British passes as camaraderie: people mentioned her name with a gentleness that told me I was not alone in recognizing she was perhaps a bit brittle.

One evening near the end of that first autumn term, likely in late November or early December, a dozen or so of us were eating together in the dining hall. I said something that upset Linda. I remember thinking, she had either misunderstood what I had said, or was reaching for an interpretation of what I had said that was stretched, in order to justify being upset. She glared at me, the women around her waved me off, and I backed away from the table, making a mental note that there were more landmines hidden around that psyche than I had anticipated.

Some time later, in the adjoining pub, another friend found me and said, “Linda’s really upset at what you said.” I walked back in to the dining hall to apologize again: she was still there, sulking, with Julian and another gal keeping her company. She glared at me again and looked away: Julian and I caught eyes, I raised my hands apologetically, he nodded as if to say, “I’m on it, it’s OK,” so I slipped away.

That was on a Friday night, I believe. By Monday the word was that Julian and Linda were dating. I confess, it seemed like an odd pairing, but judge not lest ye be judged.

Not long thereafter, a handful of days it seems, but a matter of a couple of weeks at most, the term drew to a close. Linda and I had kept our distance, but Julian and I had a pint by the window of the empty pub on a very bright afternoon. I recall a bit of what we spoke about: he mentioned his father, who was deceased, and told me a bit more about his background. We said our good-byes, as we were going different directions for Christmas.

I left that day. The next, Julian Benello went to the airport, got on Pan Am 103, and was killed over Lockerbie, Scotland. I learned of his death a few days later, reading the list of deceased in some newspaper in Europe. Years later I heard later that his work was indeed leading-edge, and that his research colleagues included his name when they published what became a seminal paper in their field, in tribute to his memory. There have not been many people who in their mid-twenties have made a deep impression on me in a matter of a few hours spent together, at most. Julian surely did, and beyond all the expected sadness at his passing, at his murder, I have always carried the additional regret that I had not gotten to know him better that autumn.

When I returned to Cambridge in early 1989, Linda was there in mourning: her Gothic costumes seemed, at last, appropriate. But now she was the center of attention, and over time, became invested with a new kind of bustling self-importance. We did have opportunity for a few civil words over a pint, and she spoke of “the families” and “our negotiations” as though she were emerging in a leadership role, and of meeting with news bureaus and intelligence agencies. We lads said nothing (what man can judge what a woman might be feeling in such circumstances?), but this persisted for enough weeks, then months, until some of the women at college began to snicker at it as being inappropriate, and her mourning went from being met with condolences, to humoring, to (when she emerged as a leading voice within the “Families of Pan Am 103″) it all being judged rather ghoulish. My last recollection of Linda was of her telling and retelling her involvement to a circle of undergraduates while keeping her distance from the rest of us who knew the players. In the end, her presence at Cambridge faded amidst talk of meetings in London and DC, and when I asked about her some months later, I was told she had moved to New York, and was dedicating her life to “revealing the truth about Pan Am 103.”

That is the last I heard of Linda Mack.

Out of the corner of my eye I have been following the brewing discontent about Wikipedia, its iron authority cloaked in “neutral point of view,” the growing sense among many that over a range of issues it has been hijacked by some sort of cabal whose power flows from the involvement of two super-users, SlimVirgin and Jayjg, that this discontent has breached the levies, and that the response has been some kind of critic-witch-hunt within Wikipedia, led by SlimVirgin. I have reviewed Daniel Brandt’s evidence that SlimVirgin is Linda Mack, and found it conclusive enough to decide to write this story, so that those who have been the targets of her abuse of power could round out the understanding they seek to attain.

Linda Mack is not a bad person, and if I had had a chance I would have reached out a hand in friendship myself. I ask that no one hate or abuse her: she is someone who fell in the deep end and never came out. On the other hand, SlimVirgin is a tyrant for whom (judging from the protection she affords Gary Weiss) the past is clearly not the past, and the prejudices and interests driving her behavior should be exposed. I hope this has made some minor contribution to that effort.