Category | AntiSocialMedia with Judd Bagley

Barry Minkow’s short trip from ex-felon to current-felon

Barry Minkow’s short trip from ex-felon to current-felon

It’s been a tough few weeks for Barry Minkow, as Patrick Byrne has done a fine job chronicling recently. Minkow’s sudden return from ex-felon to current-felon has come as a surprise to some, but not to the Deep Capture team; for we have, over nearly four years, sought to raise awareness of Minkow’s place in a much broader, criminal stock manipulation ecosystem.

Those who need to get caught up will appreciate the following review, with some additional information thrown in for color.

Following his release from prison for stock manipulation, Minkow created the Fraud Discovery Institute (FDI), which, according to a disclaimer on the FDI website, was originally funded by fees collected in return for “various training sessions as well as public speaking engagements.”

FDI’s ostensibly altruistic motivation persisted until spring of 2007. At that time, verbiage was added to the company disclaimer revealing two additional sources of revenue: “short positions” and “third party payers.” This was Minkow’s subtle disclosure of the fact that he would subsequently be paying the bills by means of the profits derived from trading (in this case, short-selling) ahead of FDI’s attacks on public companies, and that these attacks would be financed by third parties who felt Minkow’s motives, one must presume, were aligned with their own.

This evolution in FDI’s incentive structure – from karmic to economic – was a fateful one for Minkow, as it marks the beginning of his march down a path that by all appearances leads to prison. Given its significance, it will be the primary emphasis of the remainder of this piece.

We now know that the change to FDI’s disclaimer was timed in accordance with its publication of an attack on USANA (NASDAQ:USNA), a publicly traded company in whose stock Minkow had previously purchased hundreds of put options, anticipating they would increase in value as the company’s stock fell (that is, buying a put against a company’s stock is just one way to bet that its price is going to fall).

How Minkow came to target USANA is both instructive and well-documented, thanks to the testimony Minkow gave when deposed in the defamation suit USANA brought in response to the attack (though it’s since been equally well-documented that being under oath is by no means a guarantee Minkow will tell the truth).

According to Minkow, one summer day in 2006, entirely without warning, fellow convicted stock manipulator Sam Antar called to announce that he would be sending Minkow $100,000 – no strings attached. Together with $150,000 sent in the months to follow, Antar handed Minkow $250,000 of the nearly $300,000 used to finance the USANA attack.

This payment is interesting for myriad reasons, two of which follow:

First, Minkow currently finds himself in a familiar role as defendant in a defamation suit borne of one of FDI’s more recent attacks – this time against public company Lennar. A source familiar with the lawsuit tells me that in his deposition in the case, Sam Antar testified that the $250,000 he gave Minkow bought Antar access to Minkow’s operation, and that Antar paid it anticipating that he would eventually create a comparable business based on the FDI model. Strikingly, the source also reveals that Antar went out of his way, under oath, to express hatred toward his then-wife Robin Antar, whose personal bankroll was without doubt the actual source of the funds, assuming they did in fact originate anywhere near Sam.

Second, arguing against the possibility that the money was indeed Antar’s is the fact that public records reveal that within months of Antar’s $250,000 gifts, the State of New York issued a warrant for unpaid taxes against him in the amount of $473.15. That tax debt remains unpaid to this day.

In his subsequent divorce from Robin, Sam was unable to cover the cost of his own attorney, and was forced to beg the former Mrs. Antar to pay for both hers and his. Additionally, Antar’s remaining $60,000 SEC-ordered fine (brought about by his involvement in the Crazy Eddie stock scam) appears to remain unpaid. Finally, a 2008 civil judgment ordering Antar to repay a $200,000 debt to real estate financier Morris Cohen has been actively ignored by Antar.

Point being: the $250,000 Antar gave Minkow both financed the USANA attack and bought Antar access to FDI’s operations. What’s less clear is the origin of the money, given the amount of evidence indicating Antar himself has a net worth well below zero.

According to Minkow, he and Antar first agreed to collaborate on the USANA attack in October of 2006.

Interestingly, that’s the same month in which Gary Weiss, an outspoken defender of illegal, manipulative short selling, went out of his way to introduce Antar to the readers of his blog. The occasion was a comment Antar made on a column penned by Herb Greenberg, yet another defender of illegal short selling and the man who would, just days before FDI’s USANA attack, announce to the world that Minkow and Antar had recently joined him for lunch.

From that day on, the blogs operated by Weiss and Antar operated in close synch with one another and both made effusive praise of Minkow a consistent element in their writing.

FDI’s USANA attack was published in February of 2007 but remained largely unnoticed until March 15, when the Wall Street Journal wrote about it.

One month later, a clear anti-USANA PR offensive was launched by FDI.

Within the space of three days, Gary Weiss again made a special effort to introduce his readers to blogging accountant Tracy Coenen, a recent addition to the FDI team. Together, Antar, Weiss and Coenen carefully coordinated their blog subject matter and cross linking, in order to achieve maximum visibility on search engines, all the while heaping thick praise on Minkow’s efforts.

Two more events coincided with this mid-April PR blitz: class action securities attorney Howard Sirota (operating anonymously) became a frequent and rabidly anti-USANA participant in online discussions of the company’s stock. Sirota, as it turns out, is a close friend of Sam Antar’s and has represented the late Anthony Bruan, who is significant in that he contributed $10,000 toward the financing of FDI’s USANA attack.

Clearly, Antar brought both Sirota and Bruan into the picture — Sirota likely with an eye toward leading a shareholder class action suit against USANA, and Bruan hoping to make a quick few bucks shorting the stock.

When his true identity was publicly revealed by me in June of 2007, Sirota defended his several months’ worth of anonymous attacks on USANA and at the same time revealed that he had also bought put options in the stock, anticipating it would fall in response to Minkow’s actions.

In his deposition in the case, Minkow testified that Sam Antar had similarly either sold shares of USANA short or had invested in speculative put options.
Perhaps most significantly, the middle of April 2007 saw a dramatic and sustained surge in delivery failures of USANA shares, which is generally a result of a concerted effort to illegally depress the price of the stock.

In other words, FDI’s mid-April anti-USANA PR blitz appears to have been timed to coincide with a manipulative trading scheme intended to apply significant, artificial downward pressure on USANA’s share price.

Furthermore, this effort involved Sam Antar, Tracy Coenen, Gary Weiss, Howard Sirota, and of course, Barry Minkow.

In the years that have followed, Weiss, Coenen, Antar and Minkow have grown quite close and effusive in their affection for one another. Coenen, who knows nothing about corporate finance, has even joined Weiss in defending illegal, manipulative short selling and attacking companies victimized by the practice.

Antar, for his part, revealed under oath that he was paid $30,000 by Minkow for his support of FDI’s attack on Lennar (though he promises to pay it all back).

Tracy Coenen testified that she was paid $50,000 by FDI for her work on the same project. Gary Weiss has yet to be asked what he got for his trouble, but in light of the phrase he used in the inaugural post on his own blog – “only a fool writes for free” – we can surmise there was something in it for him, too.

To top it all off, Tracy Coenen got Minkow, Antar and Weiss each to pen an enthusiastically positive review of a book related to accounting fraud she published during this period (and while Minkow’s review remains indelibly printed inside the book, Tracy’s had the good sense to remove that one from her website).

We can also surmise that Minkow was beyond pleased with Weiss’s support for FDI’s efforts, given the fact that Minkow tends to cite a post from Weiss’s blog, verbatim and in toto, when explaining away the lawsuit USANA brought in response to FDI’s attack. (As an aside, that particular post by Weiss ends as follows: “Congratulations, Barry, and keep up the good work.”)

Notably, Minkow has been subjected to substantial criticism by the judge overseeing the Lennar suit – in which Minkow is the primary defendant – for, among other things, the destruction of evidence. This includes email communication from Minkow to Antar and Coenen. Most significantly, these same emails have also been deleted by Antar and Coenen – strongly suggesting a conspiracy by these three not only to defraud, but to cover-up.

Thus far, only Minkow has been held to account for these dark deeds, but the gears of justice grind fine yet slow, and the eventual inclusion of — at the very least — Antar and Coenen seems inevitable.

Posted in AntiSocialMedia with Judd Bagley, Featured Stories, The Deep Capture CampaignComments (35)

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A moment of déjà vu

Libyan Iman al-Obeidi barged into a hotel housing foreign journalists in Tripoli today, seeking to publicly draw attention to the government troops who had recently detained and sexually assaulted her. While no independent proof of al-Obeidi’s claims were available, her body exhibited physical injuries consistent with her story.

Libyan government minders tasked with controlling reality as presented to foreign press corps quickly and brutally silenced al-Obeidi, whisking her away in a waiting automobile. You can read more about this heartbreaking story here.

Following al-Obeidi’s abduction, journalists inquired as to her fate. A government spokesman dismissed the incident, saying al-Obeidi was “drunk and possibly mentally challenged.”

In the absence of a legitimate defense, hacks always attack the whistleblower’s mental state.

This incident took be back to August, 2005. Patrick Byrne had just given a presentation that figuratively barged into the middle of Wall Street’s snoozing press corps, seeking to publicly draw attention to a financial assault being experienced by many small public companies at the time.

One of the few employees of a media outlet (I hesitate to call him a “journalist”) who wrote about the presentation was Roddy Boyd, a well-known shill for the very people Byrne had just called out. Boyd crafted one mocking version of his story, but found it failed to meet his handlers’ expectations. So, at their request, he edited his piece to add a line questioning whether Byrne was drunk or suffering mental illness when he gave the presentation.

In the absence of a legitimate defense, hacks always attack the whistleblower’s mental state.

Posted in AntiSocialMedia with Judd BagleyComments (7)

Podcast: Rexxfield repairs online reputations

Podcast: Rexxfield repairs online reputations

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There are, for the most part, two ways for non-insiders to improperly influence stock prices: either through manipulative trading or the spreading of misinformation.  Both are done with the intention of sparking unwarranted hype or panic in the broader market.

It was a combination of trade-based and information-based manipulation that led to the sudden collapse of both Bear Stearns and Lehman Brothers. In response, regulators finally made it much more difficult to engage in trade-based manipulation – on the short side, at least – and the result has been a dramatic reduction in the prevalence of the practice.

What has not been reduced is the prevalence of greed, which I’ve predicted would cause would-be manipulators to shift resources away from trade-based manipulation in favor of its information-based counterpart.

We all know what this means: more anonymous message board posters and bloggers making unsubstantiated claims about a company’s prospects. Whether done on the long or short side, this is wrong. But what makes it particularly pernicious on the short side is the lasting, negative impact the practice has on the reputations of real people, as a target company’s management is very frequently subjected to particularly libelous claims which inevitably accumulate and darken reputations as determined –more and more each day, unfortunately – by Google and other search engines unconcerned over the accuracy of the information they return in response to queries about real people and organizations.

That someone can spend years creating a good name for themselves and their company, only to have dedicated, anonymous miscreants tarnish both in a matter of months or even weeks at virtually zero cost is highly suggestive of a system that’s broken.

And yet it’s the one we’re stuck with.

michael roberts Podcast: Rexxfield repairs online reputations

Michael Roberts, founder of Rexxfield

The good thing about markets is that if needs develop, eventually, enterprising individuals will step in to fill them. In this case, the need is online reputation management and repair, and the enterprising individual is Michael Roberts, founder of Rexxfield, a company dedicated to reorganizing online information in favor of accuracy, fairness and balance.

Roberts arrived at the Rexxfield concept in the most genuine of ways: as a frustrated target of a vicious internet libel campaign. Eventually, Roberts took the lessons learned through the process of solving his own problems and built a company around them.

We met recently, and I recorded the conversation. Here are some of the highlights. I’ve also included portions of a chat I had with Patty McPeak, one of Rexxfield’s earliest clients. You may either download the mp3 or listen to it now, by clicking the “play” button below.

audio mp3 button Podcast: Rexxfield repairs online reputations  Deep Capture Podcast: fixing internet libel [18:27m]: Hide Player | Play in Popup

(By the way, it’s worth pointing out that Michael’s online attacker recently pled guilty to a serious felony and is due in court on another shortly.)

If you or your company has been the target of an internet smear campaign, contact Michael Roberts at Rexxfield.com to learn more how to regain control of your online reputation.

Soundtrack (all songs available at Music Alley).
Dave Lambert Band: Berwick Road
Jim Fidler: I Still Remember
Josh Woodward: I’ll be right behind you Josephine
The Meshes: Irish Eye
Derek K. Miller: El Campo

Posted in AntiSocialMedia with Judd Bagley, Deep Capture Podcast, Featured StoriesComments (39)

Yet another naked shorting disinformation campaign laid bare

Yet another naked shorting disinformation campaign laid bare

It’s difficult to overstate the influence of Wikipedia these days, particularly when it comes to informing media coverage. A recent experiment, carried out by a student in Ireland, makes this very clear. So it should come as no surprise that those who wish to minimize the perceived impact of illegal naked short selling on markets and the economy as a whole have made the online encyclopedia a major point of focus.

Recently, yet another effort to infiltrate and alter the content of Wikipedia by a proponent of illegal shorting came to light and was foiled. As before, the infiltrator was former Business Week reporter Gary Weiss (whom a senior contributor recently termed “one of [Wikipedia’s] most slippery sockpuppeteers”), operating for over a year in complete defiance of an edict specifically banning him from the site based on his very well-documented history of abusing Wikipedia for his own conflicted purposes.

In the past (as you can read about here), we know Weiss spread misinformation relating to stock fraud via Wikipedia on behalf of the Depository Trust and Clearing Corporation (DTCC), the Wall Street firm considered a key enabler of illegal short selling. Exactly who’s sponsoring Weiss these days is unclear; however, as the evidence that follows will demonstrate, his concerted effort to whitewash DTCC’s Wikipedia article makes that company the prime suspect.

Now that his ruse has been uncovered – yet again – the focus becomes one of identifying and repairing the damage done. A brief review of some of the thousands of changes made by Weiss will give you a sense of both the scope of the problem and the nature of his motives. I’m organizing the following tiny sampling of Weiss’s Wikipedia edits by topic, with the content as it originally appeared on the left, with Weiss’s changes on the right. Words added or removed appear in red.

As you read what follows, ask yourself two questions:

  1. Which version, be it the left (before Weiss) or the right (after Weiss), better reflects reality and serves readers (particularly journalists) seeking to form an opinion?
  2. What might be Weiss’s motive for obsessively making these changes (and literally hundreds more like them)?
Wikipedia Article Before After
Depository Trust & Clearing Corporation While there is no dispute that illegal naked shorting happens, there is a fight as to the extent to which DTCC is responsible. Some blame DTCC as the keeper of the system where it happens, and charge that DTCC turns a blind eye to the problem. Critics blame DTCC as the keeper of the system where it happens, and charge that DTCC turns a blind eye to the problem.

Depository Trust & Clearing Corporation In 2007, WayPoint Biomedical sued DTCC for DTCC’s refusal to comply with a subpoena request for documents that Waypoint needs to track trades in the company’s shares.

Depository Trust & Clearing Corporation The DTCC has also denied having any relationship with financial journalist Gary Weiss. Weiss is alleged to have manipulated an account on Wikipedia, with assistance from several Wikipedia administrators, to promote naked short selling on the website from January 2006 to March 2008. (added by others and removed by Weiss five times)

Depository Trust & Clearing Corporation DTCC has been sued with regard to its alleged participation in naked short selling. Further allegations about DTCC’s possible involvement have been made by Senator Robert Bennett and discussed by the NASAA and in articles — disagreed with by DTCC — in the Wall Street Journal and Euromoney. DTCC has been sued over alleged participation in naked short selling.

Depository Trust & Clearing Corporation The U.S. Securities and Exchange Commission (SEC), however, views naked shorting as a serious enough matter to have initiated two separate efforts to restrict the practice.

Naked short selling Author and reporter Gary Weiss maintains that the SEC enacted Regulation SHO in part due to pressure from a handful of small and microcap companies. He also cites economic justifications for naked short selling and downplays its significance as a problem for the market.
(note: upon making this change, Weiss also added a link to his book, referring to himself as a source of “notable media opinions.”)

Naked short selling Amidst growing concern in 2008 about the effect of naked short selling on faltering companies, the SEC issued a temporary order restricting short-selling of the shares of 19 financial firms deemed systemically important. Shortly following the failure of Lehman Brothers in September of 2008, the largest bankruptcy in U.S. history, the SEC expanded the temporary rules to remove exceptions and to cover all companies. As part of its response to the crisis in the North American markets in 2008, the SEC issued a temporary order restricting fails to deliver in the shares of 19 financial firms deemed systemically important. In September of 2008, the largest bankruptcy in U.S. history, the SEC expanded the temporary rules to remove exceptions and to cover all companies.

Naked short selling During hearings on the 2008 financial crisis before the House Committee on Oversight and Government Reform, former Lehman Brothers CEO Richard Fuld said a host of factors including a crisis of confidence and naked short selling attacks followed by false rumors contributed to both the collapse of Bear Stearns and Lehman Brothers. During hearings on the 2008 financial crisis before the House Committee on Oversight and Government Reform, former Lehman Brothers CEO Richard Fuld said a host of factors including a crisis of confidence and naked short selling attacks followed by false rumors contributed to both the collapse of Bear Stearns and Lehman Brothers. However, Fuld’s testimony was generally derided as self-serving.

Naked short selling Rolling Stone magazine featured naked shorting in an article, “Wall Street’s Naked Swindle” by Matt Taibbi, in October 2009. In the article, it was reported that an unknown investor had shorted $1.7 million worth of Bear Stearns stock through a variety of options. For the item to make a profit, Bear Stearns would have had to have lost half its value or more in less than nine days. When Bear Stearns collapsed, the options were worth $270 million, or 159 times its previous value. Rolling Stone magazine featured naked shorting in an article, “Wall Street’s Naked Swindle” by Matt Taibbi, in October 2009.

Naked short selling Rolling Stone’s Matt Taibbi presentation on Naked Shorting

Naked short selling In an October 2009 article in Rolling Stone magazine, journalist Matt Taibbi wrote that there had been an attack on Bear Stearns and Lehman Brothers in March 2008 employing “naked short-selling”.

Naked short selling Effective September 18, 2008, amid claims that aggressive short selling had played a role in the failure of financial giant Lehman Brothers, the SEC made permanent and expanded the rules to remove exceptions and to cover all companies. Effective September 18, 2008, the SEC permanently removed an exemption for market making in options on stocks, and making an explicit anti-fraud regulation relating to that activity. The stringent delivery requirement is temporary.

Naked short selling http://www.deepcapture.com/ Blog devoted to naked shorting practices

Robertson v. McGraw-Hill Co. In the article, Weiss described…Weiss claimed…Weiss told how…Weiss described…Weiss’ report was distributed…Weiss’ predictions… The article described…it claimed…The article told how…it described…the article was distributed…the article’s predictions

Robertson v. McGraw-Hill Co. In the suit, Robertson requested $1 billion in damages for, in Robertson’s words, “false and defamatory statements” contained in Weiss’ article. Media response to the suit noted the unusually high damages demanded for a libel suit and speculated that the case would be watched with concern by the publishing industry. The suit was subsequently settled without payment of damages, and Robertson’s fund closed in March 2000.

Michael Milken Starting in June 2009, a series of articles by Mark Mitchell were published on a website called Deep Capture about Milken’s ties to a select group of hedge funds and the stock manipulation of a company called Dendreon (NASDAQ:DNDN). Dendreon has developed a drug called Provenge that enables the human body’s immune system to better fight prostate cancer. (removed by Weiss and replaced by others at least three times)

If there is a silver lining to this cloud, it’s the following: Wikipedia’s current ruling Arbitration Committee, which has the unenviable task of, among other things, dealing with Weiss and his continued efforts to subvert their authority, is genuinely interested in doing the right thing in this situation. Though you might take that for granted, I can assure you that this has not always been the case. Indeed, at one time, Wikipedia’s ArbCom seemed to go out of its way to enable Weiss’s abuse of this most important social media platform, resulting in (if you can believe it) an even greater number of yet more dramatically skewed and self-serving changes to these articles by Weiss.

Wikipedia has come a long way since then.

Finally, it seems unlikely that Portfolio.com, where he authors a business column, is aware of Gary Weiss’s actions. They would probably appreciate knowing more. If you agree, consider sending a brief and informative note to Condé Nast Publications Group President David Carey: David_Carey@condenast.com.

Postscript: If you’re at all unclear on why you should be bothered that DTCC seems to have hired former journalist Gary Weiss to cover-up the crime of illegal of naked short selling, I strongly suggest you check out Lila Rajiva’s recent post on the composition of that company’s board of directors.

_____________________

And now, for what long-time readers of DeepCapture.com will recognize as my favorite part of writing about Gary Weiss: a little running up of the score (piling on with additional insights that don’t necessarily make the case on their own, but certainly make the case much more entertaining).

After discovering the Wikipedia edit placing Gary Weiss within the Fort Knox-like DTCC (see this for the explanation, if you didn’t already follow the link above), I sent DTCC spokesman Stuart Z. Goldstein the following email:

From: Judd Bagley
To:
Stuart Goldstein
Sent:
Wed, 31 Jan 2007 10:24 PM
Subject:
media inquiry
Mr. Goldstein,
Yesterday I received some information suggesting Gary Weiss either is or has been hired or retained by the DTCC (or DTC or NSCC). Can you confirm the existence of a professional relationship between Gary Weiss and your organization?

More than two days passed with no response. Finally, I received the following:

From: Stuart Goldstein
To: Judd Bagley
Date: Fri, Feb 2, 2007 at 12:00 PM
Subject: your inquiry

*** Body Not Included ***

That’s right…the body of the email read only “*** Body Not Included ***”

With that, I responded:

From: Judd Bagley
To: Stuart Goldstein
Date: Fri, Feb 2, 2007 at 1:20 PM
Subject: Re: your inquiry

Mr. Goldstein,
Thanks for your reply, though the body appears to be missing…may I trouble
you to re-send your reply?

Goldstein’s record-breaking response (especially considering his earlier reply took two days to arrive) hit my inbox three minutes later:

From: Stuart Goldstein
To: Judd Bagley
Date: Fri, Feb 2, 2007 at 1:23 PM
Subject: Re: your inquiry

My response to your question is no.

On the surface, this would seem to be Goldstein denying a relationship between DTCC and Weiss. The problem is, I didn’t ask a yes or no question. I asked him to confirm something specific, to which he responded “no.” The answer didn’t fit.

I twice asked Goldstein to clarify his response, and was twice ignored.

That’s when I realized I’d been played.

Goldstein’s quick reply of “My response to your question is no” was probably calculated beforehand as his response to my inevitable request that he re-send the reply which read only “*** Body Not Included ***”.

He got me.

Here’s how this applies to Weiss.

Weiss’s most recently-banned Wikipedia sockpuppet, known as JohnnyB256, generally began to arouse suspicion in September, following a series of extremely slanted edits to the Wikipedia article on DTCC. At that time, multiple Wikipedia editors asked JohnnyB256 if he had a relationship with Gary Weiss. JohnnyB256 avoided answering the question (other than to dismiss it as “unmitigated gall”) until a senior Wikipedia administrator known as Lar inserted himself into the conversation to say he felt it was a “reasonable question.”

JohnnyB256 then responded, in a way that was unambiguously directed to Lar alone, saying, “The answer to your question is ‘no’.”

Only problem is, Lar was the one person who never asked him the question. Unfortunately, nobody picked up on this serpentine strategy at the time, allowing JohnnyB256 to claim he’d already answered the question of  a link to Weiss when it came up from time to time.

Anybody else suspect Weiss and the DTCC are using the same playbook?

Posted in AntiSocialMedia with Judd Bagley, Featured Stories, The Deep Capture Campaign, The Hijacking of Social MediaComments (64)

Wikipedia’s Jimbo Wales unimpressed by Gary Weiss and his lies

Wikipedia’s Jimbo Wales unimpressed by Gary Weiss and his lies

Wikipedia’s Jimbo Wales sees Gary Weiss sockpuppeting all over the internet

As is described at great length in these pages, Wikipedia has been one of the principal battlegrounds in the effort to cover-up the crime of illegal naked short selling.

For just over two key years, former journalist Gary Weiss dedicated an enormous amount of time and energy to the process of gaining control over and skewing the Wikipedia article on naked short selling. We know that given Wikipedia’s influence as a research tool – of journalists in particular – the heavily Weiss-influenced version of the article made it much more difficult than it should have been to get real reporting done on the issue.

Fortunately, as more and more Wikipedians came to see what Weiss was doing, an army of volunteers banded together to prove, beyond any doubt, the extent of Weiss’s deception. Their conclusion: Weiss created multiple Wikipedia identities (commonly known as “sockpuppets”) working in parallel to give the false impression of much more support for his position than actual existed.

This is a huge no-no on Wikipedia, and resulted in Weiss’s permanent expulsion from the project, and the liberation of the naked short selling article (though far too late to matter, as naked short sellers managed to destroy Bear Stearns exactly one month later).

If you’ve followed the Deep Capture saga for very long, that much you probably knew.

Now you’re going to hear the rest of the story.

For the purpose of what follows, you need to know that in 2007, Weiss’s two main Wikipedia sockpuppets were named Mantanmoreland and Samiharris.  In September of that year, a group of Weiss’s protectors decided to create a private mailing list in order to counter the efforts of the growing number of people already working together to expose Weiss, his lies and his enablers.

Included on that private list were Wikipedia’s founder Jimbo Wales and three or four dozen other members of the site’s inner circle. Just to complete the illusion, Gary Weiss also joined the list…twice, as both Mantanmoreland and Samiharris.

Some time ago, I was given many of the emails exchanged by what came to be known as the super-secret Wikipedia Cyberstalking list. What follows is an abridgement of one of them.

The thread begins with Weiss sock Samiharris lamenting the failure of an effort to silence Wikipedia editor Cla68, who had engaged in multiple attempts to make the article on Gary Weiss himself (which was, in fact, written by Weiss) read a little less like a promotional brochure.

The matter became so contentious that Jimbo Wales himself and Cla68 exchanged emails in an attempt to find some common ground. By the time that exchange was over, Jimbo wrote to the members of the Wikipedia Cyberstalking list:

“Cla68 has written to me, and what he has written confirms what I have thought for a long time… I am not the only sane and reasonable person who thinks it very likely that Mantanmoreland is Gary Weiss and who would be thrilled to have a proof otherwise.”

Shortly adding:

“If Mantanmoreland would properly identify himself to me and prove that he is not Gary Weiss, we could put all this to bed quite easily.”

Of course, Mantanmoreland (Weiss) did not appreciate this, and responded:

“I am disheartened by Jimbo’s private comments, disgusted by his handling of stalkers when they correspond with him, and have absolutely zero faith in his ability to properly handle stalker issues himself.  I am sorry, but this is something he should delegate to others. When he privately corresponds with a stalker like Bagley or a helper like Cla68 his heart melts and he gets all mushy. It has happened before and it has happened again. It’s not going to stop. Wikipedia’s handling of stalkers is going to fail as long as stalkers can make headway by privately corresponding with Jimbo.”

Jimbo’s slight mangling of Shakespeare can be forgiven by this, his pitch-perfect response:

“The queen doth protest too much, Gary.”

Weiss’s reply barely manages to contain his rage:

“Oh I missed the “Gary”. Please be sure to use that name every time you refer to me, as I want to be reminded of your behavior tonight…because tonight was the night you officially became a stalker.”

That’s right. Weiss, having found some success labeling me and everybody else intent on enforcing some accountability for his actions “stalkers”, actually applied the label to Wikipedia founder Jimbo Wales himself.

At that point, Samiharris (also Weiss, remember) decides to offer himself some support in condemning Wales:

“I have to sleep on it to absorb the magnitude of the founder of Wikipedia acting this way.”

With that, Mantanmoreland and Samiharris signed off.

The next day, Samiharris started a new thread, hoping to recast Mantanmoreland’s earlier attacks on Wales:

“At its very lowest point, Jimbo precisely replicated the tone and content of a [Wikipedia criticism site] Wikipedia Review attack. I mean that literally. His response to Mantanmoreland, calling him “Gary,” could have been made by [Wikipedia Review administrator] Somey.”

To this, Wales offered the response of his life:

“I am frustrated that Mantanmoreland has not been more helpful to us in confirming that he is not Gary Weiss.  I think that the evidence for that is insufficient for us to know for sure, but that on average it tends to suggest it.  I have proposed a few different ways that Mantan could resolve this, but he is unwilling to even consider it.

And I am frustrated with you for your repeated personal attacks on me and complete refusal to assume good faith.  Any allegation against me, no matter how trivial or unsupported by evidence, is accepted by you as fact.  I think that’s unfortunate.

That frustration caused me to be inappropriately blunt with Mantan. But the issue is real. My concern is that if Mantanmoreland is really Gary Weiss, then it is only a matter of time until this is proven…either by Bagley or someone else…and we will find that we have been manipulated in a pretty sad way.

The evidence that Weiss has sockpuppeted all over the Internet is pretty compelling, and even the mainstream press has commented over his refusal to directly address it. Is Mantan one of those socks? We have no proof either way, but I think the evidence tends to suggest it.

It upsets him that I think that, but there you go.  Speaking the truth as I see it seems to me to be the most simple and direct way to correct any errors that I may have.”

Of course, everything I alleged linking Weiss with Mantanmoreland and Samiharris eventually was very publicly proven, and as Wales predicted, the clout once enjoyed by Weiss’s inner circle defenders was forever diminished.

This exchange, and many others like it involving Jimbo Wales and Gary Weiss in his multiple forms, also convinces me that – contrary to what I have openly wondered in the past – Jimbo’s public denial of the Weiss/Mantanmoreland+Samiharris connection, despite his private acceptance of the same, was based primarily on a desire to avoid damaging Wikipedia, as opposed to any theorized influence brought to bear by his associates in the Chicago options trading community (where a key component of illegal naked short selling takes place). I was wrong about that.

There are a few other insights we can take away about Gary Weiss from this exchange.

  • First, when backed into a corner, Weiss will reflexively and irresponsibly lash out at his accusers.
  • Second, Weiss seems programmed to characterize any efforts at investigating his online misbehavior as “stalking.” That, together with cries of “anti-Semitism,” are the two most well-worn tools in his chest.
  • And third, Weiss’s willingness – even eagerness – to go to great lengths to mislead all around him is pathological. He can’t help himself.

Put it all together, and it’s easy to see why Gary Weiss was the logical choice when proponents of illegal naked short selling sought a resolute apologist for their repugnant practice.

Posted in AntiSocialMedia with Judd Bagley, Featured StoriesComments (8)

Gary Weiss earns an F

Gary Weiss earns an F

NOTE: Though DeepCapture.com publishes on a blog platform, this site is first and foremost a work of journalism. Consequently, we rarely engage in the kinds of back-and-forth exchanges of jabs that tend to define our deeply-conflicted and drama-addicted blogging critics.

Today, I make an exception.

In a recent post, I offered a theory as to why the reporting on a specific incident – DeepCapture contributor and Overstock.com (NASDAQ:OSTK) CEO Patrick Byrne’s filing of a defamation lawsuit against short-selling hedge fund Rocker Partners – was so undeniably polarized. In short, regional and non-business press reported very objectively on the suit, while the New York financial press coverage was overwhelmingly pro-Rocker Partners and anti-Byrne.

My theory cited Facebook friend relationships (information which is, according to Facebook itself, considered public) to demonstrate that with very few exceptions, the authors of the adversarial reporting all have close personal relationships with Marc Cohodes or his friends, and in some cases, with Cohodes’ family members.

I questioned how these reporters can be expected to do their jobs when these relationships exist between them and those they are supposed to be covering. I also pointed out that no political reporter would dare be “friends” (Facebook or otherwise) with an elected official he or she was tasked with covering, for that would inevitably cloud their journalistic integrity.

I’m not the only one who sees the world this way. Recently, judges and attorneys in Florida were prohibited from being Facebook friends with one another, since “online ‘friendships’ could create the impression lawyers are in a position to influence judge friends.”

As for my video, never once did I refer to “naked short selling.”

Not once.

Nor did I use the word “conspiracy.”

Not once.

This is a simple case of supposedly objective business journalists and bloggers being too close to their subject, Marc Cohodes, and allowing the relationship to affect their reporting. Period.

Those who are claiming that I was painting a larger conspiratorial picture either didn’t watch the video, or are attempting to intentionally deceive their readers and cloud this issue. I’m not sure which is more shameful.

I should also point out that those who are claiming I was painting a larger conspiratorial picture are – not coincidentally – directly tied to Marc Cohodes or his friends. The resulting stab at journalism (in name only) is hardly a conspiracy; it’s human nature and in the case of these writers, very poor form and an even more poorly-kept secret.

In anticipation of this response (what could be more predictable?) I preemptively uploaded a spreadsheet documenting the extended – and publicly available – relationships connecting these folks, which I invited DeepCapture readers to examine in order to spot additional links which might explain still more instances of questionable journalism in support of bear raiding short sellers.

Some are trying to spin this as an “enemies list”, but as anybody who took the time to watch my video knows, that’s just a frantic attempt at damage control by a bunch of blushing writers.

Finally, I want to address the most unhinged reporting on this of all: that of Gary Weiss, a blogger initially hired to attack critics of illegal short selling on behalf of the Depository Trust and Clearing Corporation.

Of all the disjointed untruths Gary has spewed in our nearly four-year old battle, the best – or should I say the worst – came out today. Weiss writes:

I found that somebody — gee, I wonder who? — hacked into my Facebook account and uploaded photographs of “guilt-by-association” presentations Bagley has drawn up over the years, one of which was made the picture associated with my account. Now that ain’t legal either, obviously. And yes, I will prosecute.

Weiss, and all those who believe any of this (public) Facebook data was acquired via hacking, give me much more credit than I deserve. Cracking a site like Facebook would be just about impossible. No, there was no hacking. Some users might hide their friend lists from their profile page, but that doesn’t make them go away. If you want proof (and have a Facebook account) go ahead and peruse the not-so private Facebook friend lists of Gary Weiss, Sam Antar and Tracy Coenen.

But be warned: doing so will get you labeled a “hacker” by them.

As for this nonsense about hacking into his account in order to upload images to it: what Gary, a Facebook newbie who’s a little too quick to believe the first convenient notion that pops into his head, is probably seeing are images that somebody (not me nor anybody I know of) has uploaded to their own accounts and tagged with his name. These would appear under his photo tab in a section dedicated to “Photos of Gary”, which is distinct from whatever images he might upload. If that bothers him, Gary has the ability to un-tag himself from any user’s photos. If you need help with that Gary, just let me know. I’ll walk you through it.

But, consistent with his mandate, despite an easy explanation, Gary decided to take the libelous route, as have the usual members of his entourage.

I only hope their apologies are published at least as prominently.

(Those of you who enjoy reading about Gary Weiss’s sockpuppeting misadventues will take great joy at the post I intend to publish later today.)

Posted in AntiSocialMedia with Judd Bagley, Featured Stories, The Deep Capture CampaignComments (14)

The stories behind the Rocker and Gradient lawsuit story

The stories behind the Rocker and Gradient lawsuit story

Today, short-selling hedge fund Rocker Partners paid Overstock.com (NASDAQ:OSTK) $5-million to settle the lawsuit filed against them in August of 2005. Rocker Partners also entirely dropped its own countersuit.

Overstock.com CEO Patrick Byrne is a frequent contributor to DeepCapture.com.

This is a major victory, not only for Patrick and Overstock.com, but for all public companies targeted by bear raiding hedge funds.

But thanks to the unusually skewed reporting surrounding it, chances are you either hadn’t heard about the suit, or were under the impression it was frivolous and certain to fail.

This presentation explains part of the story behind the coverage of the suit, using some innovative methods to explain why what you heard about the suit and its merits likely had little in common with the reality of it.

As promised in the video, researchers are encouraged to find additional links within the Facebook friend lists of the short-selling hedge funds and journalists and bloggers who love them. To make the process easier, I’ve compiled this spreadsheet. If you discover anything interesting, particularly with respect to the hedge funds and reporters linked to other bear raid targets, please write about your findings it in the comment section below.

Also, very shortly I’ll be adding an interactive, dynamic relationship browser to this post, which will make it easy for you to visualize these networks.

Posted in AntiSocialMedia with Judd Bagley, Deep Capture Book, Deep Capture Podcast, Featured Stories, The Deep Capture CampaignComments (284)

The Register weighs in on our crusade

The Register weighs in on our crusade

Recently, I revealed a few details of a security flaw I had discovered on the Yahoo! message boards, which made it possible to determine a user’s IP address and username. This would have been nothing more than a curiosity but for the fact that, as we’ve documented many times on DeepCapture.com, stock message boards are among the preferred venues for short selling hedge funds seeking to spread disinformation about targeted companies and — often — opponents of short-side stock manipulation.

As I wrote, a few months ago, I used this security flaw to determine an IP address frequently used by Gary Weiss, who, prior to being repeatedly outted by yours truly, was among the most active, anonymous spreaders of such disinformation on stock  message boards, blogs, and Wikipedia. With this information, I was able to prove that Weiss was again engaging in pro-naked short selling sockpuppetry, this time on political blog DailyKos.com (a claim DailyKos.com later verified).

Cade Metz, a reporter for the prominent British tech publication The Register, took note of the above-referenced security flaw, and wrote a very in-depth piece on it and the part it’s played in Weiss’s latest trip-up, in addition to examining the way this fight has so starkly turned in our favor as of late.

Take a look at Cade’s piece and, if you like it, be sure to Digg it here.

Posted in AntiSocialMedia with Judd Bagley, Featured StoriesComments (87)

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The climate on Planet Money

Two things:

First, I highly recommend making a habit of listening to NPR’s Planet Money podcast. I’ve been listening for nearly a year (the entire length of its existence) and find the benefits innumerable. If you’re not familiar with podcasting, it’s basically an easy way to have audio content automatically downloaded to your computer or mp3 player as it’s released. That means you don’t need to go looking for it. It’s just there, waiting for you to consume at your convenience.

Planet Money publishes a new episode every Monday, Wednesday and Friday evening. The typical 20 minute edition focuses on some aspect of economics, more often than not related to the present financial crisis, and usually incorporating an interview with somebody fascinating.

Which brings me to thing #2…

The most recent episode of Planet Money includes an interview with Sam Antar, a convicted stock manipulator and known associate of now-defunct short selling hedge fund Copper River Partners (née Rocker Partners) and Gradient Analytics (née Camelback Research). In total fairness, Sam’s interview, which focuses on the crime he enabled as CFO of Crazy Eddie) is very interesting, although I’d say that’s more a reflection on the skill of the interviewers than on Sam himself.

At the conclusion of the interview, hosts Adam Davidson and David Kestenbaum wonder aloud whether Sam Antar is to be trusted.

In response, I added a comment to the segment’s accompanying blog portion, pointing out that in my opinion, Sam Antar remains in the stock manipulation business as evidenced by his involvement in — and financing of — smear attacks on public companies (which go beyond claims of accounting fraud to include accusations of anti-Semitism, marital infidelity, substance abuse, and worse) led by short sellers hoping to profit from an expected drop in the target companies’ share price. In support of my claim, I included this link, which offers a clear example of just such an attack against a company called USANA: http://antisocialmedia.net/when-youre-right-youre-right/

Well, typical of how Sam and his buddy Gary Weiss operate, they reported my comment as “inappropriate” and managed to get it removed (twice).

If you agree that the world could benefit from additional context when deciding whether to trust Sam Antar, you might consider making that clear by adding your own comment here.

Posted in AntiSocialMedia with Judd BagleyComments (18)

Gary Weiss busted. Again.

Gary Weiss busted. Again.

If you fail to find entertainment value in seeing illegal naked short selling proponent Gary Weiss publicly caught telling irresponsible lies, then you may consider this post optional and stop reading now.

weiss stunned Gary Weiss busted. Again.

Gary Weiss wonders how he managed to get caught sockpuppeting...again.

On the other hand, if you – like me – do enjoy seeing Weiss ensnared in the traps he’s haphazardly laid for others, you’ll appreciate what follows.

Earlier, I wrote about how I successfully confirmed my suspicion that Gary Weiss had spawned a new pro-illegal naked short selling sockpuppet in the form of Daily Kos blogger “Tom Sykes”.

As expected, both Weiss and “Sykes” responded on their respective blogs with furious and indignant denials and repeated insistence that I was lying.

As it turns out, DeepCapture.com reader Andrew Perez also has a blog on Daily Kos (in addition to his contributions to The New Argument), and he took justifiable offense at the con Weiss was attempting to pull on Daily Kos readers, penning a particularly well-written overview of the situation. In that post’s comment section, “Sykes” went on the offensive, but soon began to bob and weave as Perez worked to pin him down.

The key moment in their exchange is summarized below (you can read it in full here):

Perez: Correct me if I’m wrong: you are Gary Weiss. If you take offense with me addressing you as Gary, will you please confirm or deny that you are Gary Weiss? I asked you to do so already and you ignored my request.

Sykes: No I’m not and I’m not going to engage with you anymore. I just read the comments that you made on Deep Capture before you marched over here like a good Soldier of Byrne to write your little smear piece. You are much more of a shill for that creep than I thought you were. You use his tactics, you have his values. You belong there, not here.

Perez and I separately contacted Daily Kos administrators with evidence proving they were being scammed by Gary Weiss. I didn’t hear back, but Perez did. Via email, a Daily Kos administrator told him: “Sykes has been banned based on my evaluation of the material you and others provided.”

We can officially and unambiguously add Tom Sykes to the long list of abusive sockpuppet identities Gary Weiss has unsuccessfully created to trick people into believing illegal naked short selling is somehow a good thing.

Posted in AntiSocialMedia with Judd Bagley, Featured StoriesComments (66)

Was the United States Attacked By Financial Terrorists?
   2.The “Money Weapon” and a Jihad Bigger than Bin Laden
   3.Michael Milken and the BCCI Criminal Enterprise
   4.Michael Milken, the Mafia, and Some Powerful Hedge Funds
   5.The Russians, their Friends, and Bernie Madoff’s Bear Markets
   6.Man Financial and Al Qaeda’s Wash Trades
   7.The Bernie Madoff Cover-Up, the Blind Sheikh, and the RLevi2 Algorithmic Market Manipulation Machine
   8.Al Qaeda, Iran, and Some Mafia-tied Agents of Economic Sabotage
   9.The Collapse of MJK Clearing, a Few Loose Nukes, and a Lot of Self-Destruct CDOs
   10.The Mafia, the Markets, and a Message from Russia
   11.Michael Milken’s Market Manipulation Club and Al Qaeda’s Big Bank
   12.Russian Spies, Rogue States, and the Manipulation of the American Markets
   13.The Collapse of Refco; the Take-down of National Heritage Life; and the Day the Mafia-Jihadi Nexus Discovered Penson Financial
   14.How the Russian Mafia Captured the DTCC — and the American Financial System
   15.Ali Nazerali in Aruba, and an Al Qaeda Financial Weapon Called PTech
   16.The Deep Capture of America, and Some Clues as to the Once and Future Cataclysm
   17.A Brief Note on the Unimaginable
   18.Penson Financial’s Strange Clientele
   19.How the Mafia-Jihadi Nexus Made Penson Financial the Biggest Brokerage on the Planet
   20.Uhm, Mr. President, We Might Have a Problem…
   21.How a Small Gang of Organized Criminals Wrecked the World
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