The Illustrious Henry Blodget Thinks I Am A Very Bad Man, Part 1

    For some odd reason, I’ve never wanted to kick Henry Blodget in the throat.  I’m not sure why: there are plenty of Wall Street miscreants whom I could, with less thought than I give to picking out my socks, and Henry is, famously, a Wall Street miscreant. But I’ve really just never felt the urge, likely through some hate-the-sin-love-the-sinner moral failing of my own (and surely, when observing those who immiserate millions of retirees, neglecting to hate the sinner is generally but lachrymose oversight of duty to fellow citizens). But I’ve never wanted to, not even metaphorically, and I still do not. Thus, I intend to let my recent correspondence with Henry Blodget  stand on its own, with as little preamble from me as possible.

    For those new to the game, however, a modest introduction about Henry Blodget is necessary.  So here it is.

    Who is Henry Blodget?  First, watch this 2002 high-buzz advertisement Charles Schwab ran as a swipe against Merrill Lynch (NYSE:MER):

    Second, understand that this ad is about Henry Blodget, who, until shortly before, had been head of research for Merrill Lynch’s Global Internet Investment.  As Slate.com immediately wrote of the “lip-stick on the pig” ad:

    “This ad was produced right on the heels of Merrill Lynch’s public flogging for the sins of the infamous stock analyst Henry Blodget a few weeks back. And it was instantly interpreted as a direct shot at Merrill, so much so that CBS refused to air the Schwab ad at all. (Merrill, after all, is said to be a bigger advertiser on the network than Schwab is.)”

    And as the New York Times wrote of the Schwab ad,

    “In May, Schwab started airing a set of TV spots that pointed up the conflicts of interest of Wall Street firms that cater to both individual investors and corporate clients. The most controversial of those depicted a sales manager at an unidentified brokerage firm exhorting his troops to sell the stock du jour.

    ‘Let’s put some lipstick on this pig,’ the manager tells them.

    Schwab’s timing was impeccable. The ads appeared about six weeks after Eliot Spitzer, the attorney general of New York, publicly contended that Merrill’s stock analysts had recommended stocks of companies they had privately maligned. In one e-mail released by Mr. Spitzer, a Merrill analyst called one of his recommended stocks a ‘dog.’”

    Henry did much more than tout to the public a stock he privately considered a “dog”. PBS produced a fine 2002 story about Henry Blodget which provided a useful chart from which I excerpt:

    MERRILL LYNCH ANALYSTS IN PUBLIC AND PRIVATE

    COMPANY NAME PUBLIC ASSESSMENT INTERNAL ASSESSMENT
    Excite @ Home (ATHM) 6/3/00: Merrill Lynch published rating: 2 (accumulate) -1 (buy)

    7/20/00: “We do not see much more downside to the shares.” Research report

    Short-term rating: Accumulate

    6/3/00: “ATHM is such a piece of crap!” -Henry Blodget E-mail
    Lifeminders (LFMN) 12/4/00: Merrill Lynch published rating: 2 (accumulate) – 1 (buy)

    12/21/00: “We think LFMN presents an attractive investment.” Research report

    12/4/00: “I can’t believe what a POS [piece of sh-t] that thing is.” Merrill Analyst Henry Blodget e-mail.
    Infoseek.com 12/19/99: Analyst Henry Blodget suggests 3 (neutral) -2 (accumulate) rating 12/19/99: Analyst Henry Blodget calls stock a “dog”
    Internet Capital Group 10/5/00: Merrill Lynch’s published rating: 2 (accumulate) – 1 (buy)

    Placed on Merrill Lynch’s list of the top ten technology stocks (“Top Ten Tech” list), as late as September 12, 2000

    10/5/00: “Going to 5″ (closed at $12.38)

    10/06/00: “No helpful news to relate [regarding ICGE], I’m afraid. This has been a disaster·there really is no floor to the stock.”

    InfoSpace.com 7/11/00: Report says, “InfoSpace continues to be one of the best ways to play the wireless Internet.”

    Rating: 1 (buy) – 1 (buy), the highest possible rating

    InfoSpace was on the “Favored 15″ List from at least August 2000 until December 5, 2000.

    Was a major investment banking client.

    7/13/00: Analyst Henry Blodget had acknowledged as early as June 2000 that the stock was a “powder keg” and that “many institutions” had raised “bad smell comments” about it and in October had referred to it as a “piece of junk.”

    5/17/00: “This company [InfoSpace] is very important to us from a banking perspective, in addition to our institutional franchise·”

    And so on and so forth. The bottom line is that Henry Blodget’s behavior towards the public of which he was putatively a fiduciary had what Hunter S. Thompson described (with reference to Nixon’s crew) as “a mean sort of consistency.”

    Again, in the interests of brevity I will wrap up my preamble with the suggestion that the reader wishing to learn more might start with the SEC’s 2002 complaint against Henry Blodget.

    Then read this 2003 SEC settlement announcement, “The Securities and Exchange Commission, NASD and the New York Stock Exchange Permanently Bar Henry Blodget From the Securities Industry and Require $4 Million Payment.

    Be sure not to miss the (again, Nixonian) “disclosure” he made to the public about his past when, in 2004, Henry Blodget was (I-shit-thee-not) hired as a financial journalist by Slate.com (the same organization that had previous written of “Merrill Lynch’s public flogging for the sins of the infamous stock analyst Henry Blodget”).

    Finally, the reader should understand that in 2007 Henry co-founded Business Insider , a website devoted to reporting on the securities of companies in the technology industry. Which is, of course, not to be confused with participating in the securities industry from which, in a settlement with the United States Securities and Exchange Commission, NASD, the New York Stock Exchange, Henry had agreed to be…. well, permanently barred.

    Thus concludes my attempt at bringing newcomers up to speed on the Illustrious Henry Blodget.

    And so we turn to Henry and my recent correspondences, about which, as the Good Doctor liked to say, res ipso loquitor.

    From: hblodget@gmail.com [mailto:hblodget@gmail.com] On Behalf Of Henry Blodget
    Sent: Sunday, December 13, 2009 9:49 AM
    To: Patrick Byrne
    Subject: Overstock, Deep Capture

    Patrick,

    Just wanted to reach out directly.  If you feel we ever get anything wrong or you want to say anything directly to our readers, please let me know.  Happy to publish under your byline and link back to Deep Capture, Overstock, or anywhere else.

    Hope the holiday season is going well for Overstock.

    All best,

    Henry

    From: Patrick Byrne
    Sent: Sunday, December 13, 2009 1:12 PM
    To: ‘Henry Blodget’
    Subject: RE: Overstock, Deep Capture

    Henry,

    Wow. Mighty decent of you. Really? I’ll take you up on it.

    Best returned,

    Patrick

    From: Patrick Byrne
    Sent: Sunday, December 27, 2009 3:45 PM
    To: Henry Blodget
    Subject: RE: Overstock, Deep Capture

    Dear Henry,

    Thank you for this kind invitation. I have done so, and enclose my modest efforts here. I hope you feel this is adequate, and I thank you for publishing it. I hope it draws you much traffic and attention.

    Regards,

    Patrick

    PS Oddly enough, the only thing I could not source appropriately was my recollection of a quote from the first time you wrote on me. It was something that I thought was gracious and funny. This quote appears (as best as I could remember it) in the second paragraph here: if you could find the actual quote, feel free to fix my recollection.

    From: Patrick Byrne
    Sent: Sunday, December 27, 2009 3:52 PM
    To: Henry Blodget
    Subject: Overstock (NASDAQ:OSTK) CEO Byrne

    PPS Just fixed a couple typos I found.

    Happy Holidays,

    Patrick

    From: Patrick Byrne
    Sent: Wednesday, December 30, 2009 3:37 PM
    To: Henry Blodget
    Subject: Overstock CEO Byrne

    Henry,

    Oh well. Since you have not answered, I could not help but take one more swipe at refining this. Again, please use this last draft if you got to publish.

    Can you at least confirm you have gotten these, and let me know your intentions?

    Patrick

    From: hblodget@gmail.com [mailto:hblodget@gmail.com] On Behalf Of Henry Blodget
    Sent: Wednesday, December 30, 2009 4:04 PM
    To: Patrick Byrne
    Subject: Re: Overstock CEO Byrne

    Patrick,

    Thanks very much for sending.  Sorry for the slow reply–I’ve been out of the office this week.

    I enjoyed this, and we’d love to publish it.  One issue that came up is that it’s more expansive in scope than I was expecting, and we don’t have the resources to run a detailed legal and fact check.

    Given this, the easiest way to handle would be to have Deep Capture publish the piece and we’ll run the first couple of paragraphs and link to the rest.  That would also give you the ability to make further edits if you like.

    Alternatively, we can send you a standard indemnification agreement that we use with some freelance and syndication work.

    Sorry for this hitch.  Thanks again for writing and sending.  Look forward to running what we can soon.

    All best,

    Henry

    From: Patrick Byrne
    Sent: Wednesday, December 30, 2009 4:08 PM
    To: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Henry,

    Answers below in CAPS (which do not imply screaming!)

    Patrick

    From: hblodget@gmail.com [mailto:hblodget@gmail.com] On Behalf Of Henry Blodget
    Sent: Wednesday, December 30, 2009 3:04 PM
    To: Patrick Byrne
    Subject: Re: Overstock CEO Byrne

    Patrick,

    Thanks very much for sending.  Sorry for the slow reply–I’ve been out of the office this week. NO WORRIES. I FIGURED YOU WERE TAKING THE TIME OFF. GOOD FOR YOU.

    I enjoyed this, and we’d love to publish it.  One issue that came up is that it’s more expansive in scope than I was expecting, and we don’t have the resources to run a detailed legal and fact check. I UNDERSTAND

    Given this, the easiest way to handle would be to have Deep Capture publish the piece and we’ll run the first couple of paragraphs and link to the rest.  That would also give you the ability to make further edits if you like.

    Alternatively, we can send you a standard indemnification agreement that we use with some freelance and syndication work. SURE. ACTUALLY, I WOULD PREFER IT THIS WAY. YOUR SITE. MIGHT FAIR OF YOU. JUST SEND ME THE INDEMN AGREEMENT BY EMAIL. IF YOU HAVE HEARTBURN OVER ANY PARTICULAR PARAGRAPH, LET ME KNOW.

    Sorry for this hitch.  Thanks again for writing and sending.  Look forward to running what we can soon. COOLIO ON ALL.

    All best, RETURNED. BEST IN THE NEW YEAR.

    Henry

    From: Henry Blodget [mailto:hblodget@businessinsider.com]
    Sent: Friday, January 08, 2010 6:01 AM
    To: Patrick Byrne
    Subject: Re: Overstock CEO Byrne

    Patrick,

    Very sorry.  Got slammed when I got back.  Will get the letter to you today.

    Henry

    Henry Blodget

    CEO, The Business Insider

    hblodget@businessinsider.com

    From: Patrick Byrne
    Sent: Friday, January 08, 2010 12:33 PM
    To: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Henry,

    Coolio. No worries: Believe me, I udnerstand the “slam” part.

    I appreciate you doing this. I hope it brings you some attention.

    Best,

    Patrick

    From: Patrick Byrne
    Sent: Friday, January 15, 2010 2:58 PM
    To: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Henry,

    Is it something I said?

    Patrick

    From: hblodget@gmail.com [mailto:hblodget@gmail.com] On Behalf Of Henry Blodget
    Sent: Friday, January 15, 2010 3:05 PM
    To: Patrick Byrne; Julie Hansen
    Subject: Re: Overstock CEO Byrne

    Thanks, Patrick.

    Did you get the indem letter from Julie earlier this week?  Have been waiting to get it back.  Copying her…

    Henry

    Henry had spoken the truth: four days earlier a colleague of his named Julie Hansen, the COO of Business Insider had, in fact, emailed an indemnity agreement. And so began again our pas-de-deux (or pas-de-trois, as it were).

    From: Julie Hansen [mailto:jhansen@businessinsider.com]

    Sent: Monday, January 11, 2010 12:07 PM

    To: Patrick Byrne

    Subject: agreement for your Business Insider post

    Patrick,

    Henry forwarded your email to me. Attached please find the letter agreement covering your post for the Business Insider. Please sign and return a copy to me. You can email a signed PDF or fax it to 718-785-9531.

    Please let me know if you have any questions on the attached.

    All best,

    J.

    From: Patrick Byrne
    Sent: Friday, January 15, 2010 3:07 PM
    To: Henry Blodget; Julie Hansen
    Subject: RE: Overstock CEO Byrne

    Ah-ha! No I had not, but I just found it (our traps filtered it out: I will fix that).

    I will get it to back to you this afternoon or Monday morning. Thanks.

    From: Patrick Byrne
    Sent: Monday, January 18, 2010 10:07 AM
    To: ‘Julie Hansen’; ‘Henry Blodget’
    Subject: Overstock CEO Byrne

    Dear Julie & Henry,

    Good morning. Thanks again for this. Two issues:

    1) I have faxed back the indemnity agreement. I want to alert you to one issue therein. The way it was written, no control of the litigation was ceded to the guy bearing the cost and risk. That cannot work, for the following reason: if the day after you published it Stevie Cohen sued you for a $1 billion, you could, theoretically, say “Yes, you’re right, I’ll pay.” And send me the bill. I know you wouldn’t do that, but I do not think the contract written that way. Given that I am taking the economic risk, the contract should cede control of any such case (however improbable) to me, and I’ll fight it out (with your cooperation, of course). In the expectation that you would find this reasonable (even if the formulation you sent me is your standard agreement, this is surely not a standard situation) I made this one change in the pdf you sent me, signed it and faxed it back moments ago.

    2) As I had the weekend, I gave this one last turn on the wheel. Just tiny stylistic changes.

    Thanks again for this. I hope it draws you much traffic and attention (and I will use my meager resources to promote same).

    Much respect for your offer to let me write this, Henry.

    Sincerely,

    Patrick

    From: Patrick Byrne
    Sent: Wednesday, January 20, 2010 11:14 AM
    To: Patrick Byrne; Julie Hansen; Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Dear Julie and Henry,

    Good afternoon.

    Any word on timing?

    Respectfully,

    Patrick

    From: Julie Hansen [mailto:jhansen@businessinsider.com]
    Sent: Wednesday, January 20, 2010 11:16 AM
    To: Patrick Byrne
    Cc: Henry Blodget
    Subject: Re: Overstock CEO Byrne

    Patrick,

    Thanks for your follow-up. I haven’t had a chance to review the changes you suggested but I will get to them ASAP and let you know.

    All best,

    J.

    From: Patrick Byrne
    Sent: Wednesday, January 20, 2010 11:24 AM
    To: Julie Hansen
    Cc: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Thank you.

    From: Patrick Byrne
    Sent: Thursday, January 21, 2010 11:02 AM
    To: ‘Julie Hansen’
    Cc: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Julie,

    Thanks again. However, I notice this morning that Business Insider has published yet more gibberish (http://www.businessinsider.com/americas-nastiest-ceo-2010-1)  that first appeared only 2 days ago. So if it is not too much to ask, please be so kind as to let me know:

    1) when you will be able to publish my piece;

    2) or, failing that, when you will be able to let me know when you will be able to publish my piece.

    Respectfully,

    Patrick

    From: Henry Blodget [mailto:hblodget@businessinsider.com]
    Sent: Thursday, January 21, 2010 11:08 AM
    To: Patrick Byrne
    Cc: Julie Hansen
    Subject: Re: Overstock CEO Byrne

    Patrick,

    Thanks.  Are we set on the letter?  If so, I’ll read the latest version and edit for tomorrow.

    (I’ll send you the requested edits, obviously).

    Henry

    From: Patrick Byrne
    Sent: Thursday, January 21, 2010 11:10 AM
    To: ‘Henry Blodget’
    Cc: Julie Hansen
    Subject: RE: Overstock CEO Byrne

    Henry,

    Indeed we are. if you are able, please just edit in Word and track changes, so I can give you a quick turn-around. I’m honored to have you edit me.

    I hope this gets you a fair bit of publicity.

    Patrick

    From: Henry Blodget [mailto:hblodget@businessinsider.com]
    Sent: Thursday, January 21, 2010 11:21 AM
    To: Patrick Byrne
    Cc: Julie Hansen
    Subject: Re: Overstock CEO Byrne

    Thanks, Patrick.

    One initial question… What does the word “choagie” mean?  Looked it up and nothing seemed to fit.

    Henry

    From: Patrick Byrne
    Sent: Thursday, January 21, 2010 4:41 PM
    To: Henry Blodget
    Cc: Julie Hansen
    Subject: RE: Overstock CEO Byrne

    “Choagie” has the connotation of some combination of “lackey” + “sycophant” + “shill”.

    Funny, I, too, have noticed that it is not in slang dictionaries I checked, though I know a couple of unrelated people who use it. Its meaning seems to be clear to everyone in context, I’ve noticed (maybe because it sounds enough like “toady”?)

    If you would prefer to substitute “Toady” in the title and throughout, feel free.

    From: Julie Hansen [mailto:jhansen@businessinsider.com]
    Sent: Thursday, January 21, 2010 3:11 PM
    To: Patrick Byrne
    Cc: Henry Blodget
    Subject: Re: Overstock CEO Byrne

    Patrick,

    I’ve reviewed the change you made and we can’t agree to that. The boilerplate language is consistent with publishing agreements we have signed with other media companies. And while you’re right that you are not a standard author – “CEO” is not in the byline of many BI writers – the rights situation is fairly standard.

    Can we return to the original language?

    Best,

    J.

    From: Patrick Byrne
    Sent: Friday, January 22, 2010 12:43 PM
    To: ‘Julie Hansen’
    Cc: Henry Blodget
    Subject: RE: Overstock CEO Byrne

    Julie,

    I am afraid not. Respectfully, I’m happy to indemnify you, as I said, but as written the agreement would permit Jim Chanos to file a frivolous $1 billion suit and your side to put up a weak fight (or no fight at all) and then say, “OK, Patrick will pay.”  Surely you see that this is not reasonable position.

    Please let me know your final decision, either way.

    Regards,

    Patrick

    No answer has been received, though Henry continues to find time and space to publish and republish every yellow journalism hit-piece written by any slack-jawed mouth-breathing jackanapes who can manage to sit on a keyboard.

    As should be clear from the context, notice that the indemnity agreement Henry and Julie sent to me provided that, once they published my piece, if they got sued by anyone they had full control of the defense, could decide to settle for any amount, I had to pay, and I could have no input (in other words, they wanted the proverbial “blank check”).  Notice that my response did not refuse to give them that unlimited indemnity, but simply stipulated that  my lawyers got to put on the defense of my blank check (a position which would give heartburn to any lawyers but my own, I might mention). Other than that one small adjustment, I had accepted their entire indemnity agreement, as written.

    For the legally-inclined reader who wishes to analyze this for herself, here is the agreement as they sent it to me, and here is the one I returned to them, signed.

    A smart Midwestern fellow of my acquaintance once taught me that if someone won’t give you a response, and won’t tell you when he will be able to give you a response, it is fair to consider it a non-response.  But just in case, I let them have another 10 days.

    So at this point, I think it is fair to publish what I wrote at the request of Henry Blodget, but which Business Insider has refused to publish.

    (Next: The Illustrious Henry Blodget Thinks I Am a Very Bad Man, Part 2: The Essay Business Insider Requested Then Refused To Publish)

    This post was written by:

    - who has written 157 posts on Deep Capture.

    I am a concerned citizen who has been focused on systemic instability since 2004.

    Contact the author

    40 Responses to “The Illustrious Henry Blodget Thinks I Am A Very Bad Man, Part 1”

    1. Mr Hypocrite Speaks says:

      How much do you spend on Windex each year to clean that glass house from which you throw stones?

    2. sean says:

      I am going to send this to Dylan Ratigan (along with the youtube interview you did with him and Maria Bartiromo calling the Stock Market and the Economy a “House of Cards” also Elliot Spizers’ new best friend), Rachel Madow and Ed Schultz and Keith Olbermann. Lets see who will fact check (again) and follow thru with this story since our old friend Henry would’nt!!!

    3. Jim Hall says:

      CIA Agents Past And Present Offer Helping Hand To Hedge Funds
      Feb 2 2010 | 9:16am ET

      Hedge funds are always looking for an edge, and you don’t get much more edge than this: Current and former Central Intelligence Agency operatives on the payroll.

      According to a new book from Politico’s Eamon Javers, top hedge funds—including SAC Capital Advisors—and other major financial firms have brought on officers from the CIA for a variety of activities, including “deception detection.” The moonlighting by the nation’s spies and intelligence analysts is permitted by the CIA, which is intent on holding on to top talent that might otherwise be tempted to leave the agency and peddle their wares to the private sector.

      In particular, Javers’ Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage deals with a company called Business Intelligence Advisors. Boston-based BIA was founded by a group of retired CIA members, and has been retained by a number of hedge funds, including SAC.

      In 2006, the Stamford, Conn.-based hedge fund giant had a pair of BIA specialists teach its employees the finer art of “tactical behavior assessment,” or how to be a human lie detector. The former spooks, one with 20 years in polygraph experience, the other with 25 in interrogation experience, taught the SAC employees how to look for both verbal and nonverbal cues that a person—say, a company executive—is being something less than truthful.

      Another, unidentified hedge fund decided to cut out the middleman and hired BIA to do the analyzing for it.

      The hedge fund, which Javers describes as “enormous,” had a roomful of CIA-trained, BIA-employed experts listening in on a 2005 earnings conference call with UTStarcom, an internet equipment company. The BIA experts said that CEO Hong Liang Lu and CFO Michael Sophie were being less than forthright about the company’s revenue recognition.

      “Management’s behavior indicates that they will post poor third-quarter results, and it is also highly unlikely they will achieve profitability in the fourth quarter,” BIA’s 27-page report on UTStarcom concluded. Those conclusions were right on the money.

      ——————————————————————————–

      Source URL:
      http://www.finalternatives.com/node/11216

    4. sean says:

      Mr. Hypocrite, did Patrick hit a nerve?? LOL!! I expect a lot of “YOUSE” to be coming out of the woodwork on this one. LOL!!

      A little off topic here but good to see the SEC hard at work on our behalf huh?

      SEC Workers Investigated for Porn-Surfing

      More than two dozen SEC employees and contractors over roughly the past two years have faced internal investigations after they were caught viewing pornography on their government computers.

      The work computer of one regional supervisor for the U.S. Securities and Exchange Commission showed more than 1,800 attempts to look up pornography in a 17-day span: “It was kind of distraction per se,” he later told investigators.

      But he wasn’t alone. More than two dozen SEC employees and contractors over roughly the past two years have faced internal investigations after they were caught viewing pornography on their government computers, according to records obtained by The Washington Times through the Freedom of Information Act and other public documents.

      The activities of porn-surfing SEC workers, a small fraction of the overall work force, have been serious enough to warrant a mention in each of the past four semiannual reports sent to Congress by the SEC’s office of inspector general.

      In response to the open records request by The Washington Times, the inspector general’s office provided more than 150 pages of records and transcripts on the investigations, but declined to identify the employees involved. The office noted that disclosure of the employees’ names “could conceivably subject them to harassment and annoyance in the conduct of their official duties and private lives.”

      Allan Bachman, education manager for the Association of Certified Fraud Examiners, said such problems are hardly unique to the SEC. He also said the findings are troubling aside from “the egregious nature of what they’re doing.”

      “They’re simply just stealing time,” he said. “They’re getting paid to do something that they’re not supposed to be doing.”

      http://www.foxnews.com/politics/2010/02/02/sec-workers-investigated-porn-surfing/

    5. nopec2001 says:

      Patrick,

      Thank you so much for your continuing efforts. It’s truly inspiring that you are so dedicated to do the right thing, not just for yourself, but for all of us that don’t have the presence that you have. You are a wonderful example for the rest of us, and I know that right will prevail, hopefully before they succeed in destroying our country.

      Karl

      Karl

    6. rtway says:

      I love happy endings and furthers my belief that karma is a bitch.Well done Patrick and say hello to the bunny if you see him.

    7. ravenseye says:

      Bravo Patrick!
      fyi
      ..”"It is a sad day when a former U.S. Securities and Exchange Commission attorney uses what he learned in the government to later defraud the investing public,” said Lanny A. Breuer, an assistant attorney general at the Justice Department. Ten other defendants have pleaded guilty over their role in the stock-manipulation scheme.

      The SEC has brought a civil suit against Mr. Offill. “We congratulate the prosecution, and look forward to proceeding in court with our pending charges against Mr. Offill,” said an SEC spokesman.”…
      clip from JANUARY 28, 2010, 10:21 P.M. ET
      “Jury Convicts Former SEC Lawyer”
      By KARA SCANNELL @ WSJ
      http://online.wsj.com/article/SB10001424052748704194504575031941422210152.html

      i often wonder why the sec didn’t bring a civil suit against elgindy. nasdaq attempted but the sec overruled. however, credit where it’s due is when the doj rang the bells of justice!

    8. iStandUp says:

      Great, fantastic article Patrick!

      ——-

      Unfortunately, there is a new report I just read that explains HOW the SEC appears to NOT be helping us American Citizens again…..

      ———————
      Money Market Funds Can Now Prevent Redemptions
      Tuesday, 02 Feb 2010 10:23 AM

      By: Dan Weil

      Be careful how much cash you put in your money market fund.

      The Securities and Exchange Commission has passed a new rule that allows the funds to prohibit redemptions in times of duress.

      A fund can now prevent people from taking their money out if three conditions are fulfilled:

      • The fund’s share price falls below the fund’s stable net asset value per share.

      • The fund’s board of directors approves liquidation of the fund.

      • The fund notifies the SEC of its decision to liquidate and suspend redemptions.

      The new rules are part of an SEC effort to strengthen money market funds in the wake of the 2008 financial crisis. In September, 2008 the Reserve Primary Fund became only the third fund in history to break the buck – reduce its share price below $1……
      ….

      http://moneynews.com/StreetTalk/Money-Market-Funds-Redemptions/2010/02/02/id/348711?s=al&promo_code=9691-1

    9. iStandUp says:

      Here is a quote about the SEC rules governing your money market fund:

      ——–

      The pundits at ZeroHedge.com are aghast at the new rule.

      “The next time there is a market crash, and you try to withdraw what you thought was ‘absolutely’ safe money, a back office person will get back to you saying, ‘Sorry, your money is now frozen. Bank runs have become illegal,’” they wrote.

      The SEC’s approval of the new rule explains why money market rates are near zero, the Zero Hedge analysts say.

      “At this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of (SEC Chairman) Mary Schapiro.”

    10. Fred says:

      Patrick

      Did you offer to accept Blodget’s offer to run a few paragraphs on BI and then include link to DeepCapture for the full article? He did not need an indemnification to do that. Per his email, he only needed the agreement to publish in its entirety.

    11. Sam says:

      Patrick

      A little off topic but I was reminded recently of “boiler room” brokers, where they find a small stock pump up the price, and then have high pressure salesmen earn huge mark ups pushing the stock on mom and pop main street, enabling them to dump their position for a profit. The SEC and FBI chases these boiler rooms agressively.

      I was reminded of this watching the House hearings, with them discussing how Goldman sold credit default swaps to clients, while simultaneously shorting them in their proprietary accounts.

      I’m not the sharpest knife in the drawer, so could you tell me how is this different from “bolier rooms”?

    12. Fred says:

      Sam

      It’s the same to me, differing only ion scale. In the Goldman version, Mom and Pop are replaced by institutional investors, companies, and pension funds.

    13. Huck says:

      What a strange journey it has been. I will never forget listening to a conference call for a company I had no interest in. It was suggested I tune in by….. well the easter bunny. Thinking back I recall admiring the ceo for listening to the seemingly deluded rambling of a caller as he described the impending short attack that company would suffer. Told myself, at the time, that I respected the politeness of the man even though it was obvious that his thoughts were hmmmm somewhat sceptical shall we say. The predicted attack materialised, employing the exact methods described and using the forenamed media outlets. The rest grew from Dr. Brynes refusal to back down from assault. The easter bunny has become mute alas but his spirit lives in deepcapture. Keep up the fight doc, and as rightway asked, say hello to bunny bob if you have a chance.

    14. Patrick Fan says:

      Great job in the movie: Stock Shock!! President Obama, Bernanke, and our own Patrick Byrne are in a MOVIE about hedge funds called “Stock Shock.” Even though the movie mostly focuses on Sirius XM stock being naked-short-sold to near bankruptcy (5 cents/share), I liked it because it exposes the dark side of Wall Street and reveals some of their secrets. DVD is everywhere but cheaper at http://www.stockshockmovie.com

    15. ms X says:

      Leopard…spots???

    16. jeanne says:

      I worked on wall street and know plenty of these guys but this was way to confusing

      I love your website and hate the wall street garbage but oh my god this took fifteen minutes of my morning. Wrap it up I still don’t get it.

      je

    17. Meri says:

      If you want to engage in a battle of words with Henry, then by God, please do so. But put one more of your self aggrandizing bits of puffery in an overstock.com email and you and your company can kiss my shapely hindquarters – and its accompanying wallet – goodbye.

      It’s not that I’m a Henry Blodget fan; it’s that I think sticking your “look at me!” article in the middle of an overstock sales email makes you look like an arrogant egotistical brat, desperate for a bully pulpit to cry out into the wilderness that you were right all along. It’s not that the Wall Street Mess wasn’t hideous; it’s just an inappropriate forum for this sort of dialogus, and if your ego is in such desperate need of affirmation, then I’m sure you will find the adulation and accolades you so obiously crave in the warmth and love offered here in your little corner of cyberspace.

      • Diana E. says:

        meri,

        Its the perfect forum for Patrick. Even though my wallet is extremely thin right now its open to buy things I need and if Overstock happens to have what I need I will gladly buy it from Overstock!

      • Jase says:

        Don’t listen Patrick. So you lose her couple of bucks. I like your small and very occasional blurbs so I can get more info when I find time. Keep up the good work on both fronts.

      • W. Cromwell Hornfisher says:

        You used your soapbox to say “look at me” with an engaging and worthwhile story to tell. Meri jumps on your soapbox to say “look at me (and my shapely hindquarters)” with nothing more to recommend her outburst but witty writing and an over-active sense of self-righteousness.
        Patrick 1, Meri 0

    18. paris says:

      After reading your recent eyeopener disclosure on mutual funds, I am ready to bail. We lost over $60k in a 4 year period with our investments in Fidelity. Our company, Quebecor World, went bancrupt. After 21 years of service, we were given the “card”, and released from employment. shhhht. The courts allowed the company to give us back 53% of our pension.
      Mighty generous. Our 401k shriveled down to a meager $33k. We are close to retirement age and now have to start all over. Middle class has now been reduced to Slighted Class. Thanks loads to Henry. Wish they had listened to you Patrick.
      We have investments with Shwabb now some in Chinese stock market. Already lost $600 in one day. This stuff is so risky, but angling for an incline. lol

    19. Karen says:

      You go, Patrick!!!! I love a knight on a white charger! Keep up the good work!
      –K

    20. Diana E. says:

      Dear Mr. Byrne,

      Thank you for your fight!

      I really was never interested in Wall Street until I got into this little stock called CMKX. I did my civic duty and along with my daughter and a few fellow investors of CMKX, went to Wall Street to do our first amendment right and protested agaisnt naked shorting and Wall Street abusive practices. The public was interested in the information we had but the black ties that were streaming out of the offices laughed and jeered at us and told that naked shorting did not exist (yeah right!%&%$^$^##@*&**%$).

      Unfortunately, CMKX was naked shorted to the hilt and it seems it was also a scam. So everyone and their mothers made money on this except for the investors who got took for everything we put in. And, now here we are a few years later and our economy is in shambles. As for myself, I have been unemployed now for almost a year (with very little hope).

      My family has been deeply affected with numerous layoffs and my daughter and her family are making less than half the money they were making plus losing their HOME.

      So, again I thank you for your fight. It might not help me right now but it might help other people to take the blinders off and see what is really happening to our economy.

      Sincerely,
      Diana

    21. I did not find anywhere in this that you blame the shenanigans of George W. Bush. You were supporting John Kerry until the Swiftboat attacks and then you were suckered into that scam and left the Democrats for those shameless Republicans.

    22. blackbart says:

      Just more proof that allowing criminals like Henry Blodget to escape jail ala Sam Antar does nothing to stop fraud amd manipulation. In fact it actually encourages the fraudsters to continue their path on the dark side. Stop the looting and start prosecuting these thugs and their fellow goons.

    23. Alexander Cheipesh says:

      Dear Mr. Byrne,

      I’m a customer of Owerstok.com and I would like bring to you attention that obsession about some body behavior is not good for you halt.
      Stroke or hart attack is waiting to happen.

      I am dreaming to achieve what you have achieved in Overstock.Com.

      I am asking to become my Mentor to create similar business (without any financial responsibility).

      Moreover, if you decide ignore me I will never bother you again.

      Sincerely,

      Alexander

    24. All,

      I am sorry I cannot respond to each individually, but thank you for the kind words.

      Patrick

    25. I wonder is he is any relation to Esther (Mrs. Norman Maine)? lovki,lovki Patricski LK

    26. metasonix says:

      I winder how many of the rants on Patrick’s blog are actually written by Gary Weiss.

      Hi, Gary! We love you, Gary! Have a nice day, Gary!

    27. NavNYer says:

      This man stood up against the tsunami that was Wall Street greed, and wrote about it. Good for him. If more people inside and outside the financial world had taken Patrick’s stand, and also published their misgivings, I seriously doubt that we would be sliding down this slope towards another Great Depression as rapidly as we are doing so now.
      Keep going Patrick! Please continue to include your latest missives on the financial misdeeds of others in your company’s advertisements. I’ll be looking for them.

    28. Dear Mr. Byrne:

      Fascinating, really! Where do you find the time? I’m a huge fan of Overstock.com. Great service and products. As the founder and owner of a SaaS or Cloud Computing software company, Market Street Technologies, I have a keen appreciation for what you have built. I adore smart people–especially those who write well. Take a look at our website, please.

      Should you ever get a “bee in your bonnet” about Bank of America, I would love to give you some dirt. Now that Kenneth Lewis is gone, I keep wondering whether Brian Moynihan’s tenure will improve things.

      Last March on the lowest market day, my husband and I asked BofA (US Trust) to sell some Microsoft and Intel stock for us because the bank had placed a call on my company’s line of credit. When we asked what the fee would be, we were assured that it would be comparable to that of a discount broker (about $18 for two trades). You can imagine our shock when the fee turned out to be more than $5,500. Had we known they were lying, we never would have asked them to sell the stock for us. We had other low cost alternatives for responding to the call on the line of credit.

      To date, no amount of “kvetching” to the bank, on my part, has produced anything but an extremely nasty letter. From our perspective, Bank of America stole $5,500 from us.

      My husband is a retired lawyer. I am tryng to persuade him to sue. Our problem is that we are such tiny fish that we don’t even register with Bank of America. I would be most grateful if you have any ideas or suggestions for the best way to recover our money.

      Thank you,
      Market Street Technologies
      Donalee Murray Rutledge
      Founder and CEO
      (206) 330-9237

      • Dear Mr. Byrne:

        Outcome of tiff with BofA. Thought you would like to know: Went to see my local branch manager–a bright, young very eater beaver type. Wrote letter, naming, BofA broker and threatened to turn it over to the “Get Jesse” segment of our our local NBC affiliate news program. Get Jesse is a guy, who makes things right for local consumers. Because I had interned in the news room there 35 years ago and did the research/writing for what, was then called, KING Call for Action; I knew they would love my BofA story. Guess what? After two years of pursuit, BofA sent me a check for $5,500+ by return mail. I didn’t even have to “Get Jesse.”

    29. Donalee,

      Regrettably, I doubt you can sue successfully. That is because your brokerage agreement has a “mandatory arbitration” clause, and you have to arbitrate in New York, and the board in front of whom you’d be arbitrating has been, for seven decades, more or less a subsidiary of the people you’d be suing. Of course, don’t count on me for legal advise, but that is the long and short of it.

      Thanks again for the kind words, folks.

      Best,
      Patrick

    30. Alisalynne says:

      Fabulous!! Fabulous reading Patrick. And, to think, I was just wanting to see Overstock had any blue pumps on sale for me. LOL!
      Keep up the great job! Fantastic job!!!

    31. Alisalynne,

      Thanks for the kind words. More importantly, did you find the pumps?
      http://www.overstock.com/Clothing-Shoes/Womens-Shoes/692/cat.html#

      Patrick

    32. randy says:

      Thanks for exercising your right to freedom of speech to stand up against the “big boys”. We all need to be reminded that we are only “the land of the free” as long as we are “the home of the brave”. I began watching a combination of c-span and cnbc from the mid 80′s, when my husband came home one day and ordered me to quit watching soap operas because they cause divorces, until around 2000. Now i’m like the old country song “i wish i didn’t know now what i didn’t know then” and the divorce is closer than ever.

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