Patrick Byrne was right all along

We’ve long maintained here at Deep Capture that Charlie Gasparino is possibly the most insightful figure at CNBC. Today, Mr. Gasparino underscored that status.

We’ve long maintained here at Deep Capture that Charlie Gasparino is possibly the most insightful figure at CNBC.

Today, Mr. Gasparino underscored that status while on air with Joe Grano, former CEO at UBS Financial Services and an early predictor of the current financial crisis. Grano’s interview was set to coincide with the upcoming first anniversary of the bankruptcy of Lehman Brothers — commonly recognized as the event that sparked the meltdown — and attempted to answer the question, “what have we learned?”

Along the way, the following exchange took place:

Co-Host: …doesn’t that eliminate a lot of the need for all this call for legislation?

Grano: A good part of it. And as long as you limit to a degree some of the leverage. I don’t believe in naked shorts, I don’t believe in naked credit default swaps when there’s really not a counterparty there because all you’re doing is levering into the sky. We don’t need that and it has nothing to do with our…

Gasparino: Patrick Byrne was right, all along…the Overstock guy…that everybody made fun of and then every Wall Street CEO mimics him right now.

Grano: In length of speculative excess there’s no question.

For taking a position that is undoubtedly very unpopular at CNBC, the Deep Capture team salutes Charlie Gasparino.

  1. Charlie was not a fan early on. Matter of fact, who was. For him to do this, to actually proclaim it, is huge. He has the ear of the big boys.

    Absolutely monumental day for the Baloney Brigade.

    We need tee shirts and hats.

  2. OK – it’s not just Fox and the Glenn Beck show anymore. And if Patrick had it right along – who had it WRONG?

    Senator Kaufman -are you listening?

    The SEC

    They got Madoff “wrong”
    They got Stanford “wrong”
    They got Samberg/Pequot/Mack/Aguirre “wrong”
    They out in emergency naked hsort selling rules last year to protect who? Some of those protected have been involved in naked short selling and highly leveraged CRAP.

    End this….end it NOW!

  3. Truth will out. The question is will we have a finacial system when it does?
    High five’s for Patrick.
    He is one Brave man!

  4. To all, please don’t fall asleep, GASPARINO is not a good guy. Just watch!! This what he did was a good thing but he is as criminal as the rest of these CNBC Commentators, he is also a drunk.Review his whole body of work to see and verify what I am stating.

  5. Gasparino is the same after the fact windbag that Cramer is. Neither has an ounce of honesty or integrity.

    Cramer still claims he is the ONLY one who is fighting the abuses of naked short selling after denying it’s existence and denying it’s impact on the market for years. Cramer only changed when it was hurting him personally and financially.

    Gasparino is no different. He will be back sucking up to the main perpetrators of the abuse in no time. If Charlie were a man of courage and conviction he would grow some balls and research and report on who it is that engages in short selling. But then again, how would he get paid thereafter if he did such research?

  6. A little off topic but I think relevant..

    Drug giant Pfizer to pay record $2.3B fine
    Pharmaceutical giant Pfizer has agreed to pay a record $2.3 billion settlement to resolve criminal and civil liability for illegally promoting certain pharmaceuticals, the Justice Department announced. full story

  7. While CNBC was giving more time to those denying the existence of naked shorting, they weren’t investigating it. They came on and do a “he says, she says” and make a “controversy” out something that was criminal behavior and brought down the economy.

    After naked shorting in stocks, bonds, CDS, the economy is in a shambles and people are harmed, then all of a sudden, the damage is recognized and the people who pointed to the corruption are no longer seen as whackjobs, but as astute students of the market.. Why aren’t they pointing fingers at the guys who were denying the problem and question why they were so anxious to spin the lies?

    It doesn’t take a whole lot of savvy to figure out why they were out to defame Patrick and anyone who was willing to point out the corruption. Could Charlie have done a better job? He acted as a neutral mediator as if the issue wouldn’t have dire consequences. Charlie probably didn’t have a clue as to the size of the corruption.. just a little corruption… when his buddy Cramer was telling people how he was able to manipulate the market. One of their bigger draws admits to criminal behavior and nobody blinked… until Jon Stewart brought it out. And it became nothing more than an uncomfortable moment for Cramer.. when he should have been prosecuted for what he was doing.

  8. GOOD NEWS!!! There is finally a great movie out about stock market manipulation, the SEC, and short selling called: “Stock Shock.”
    Patrick Byrne is in the movie-Stock Shock. He is a hero!

    Amazon has it or has a trailer.

  9. Mark & Judd-

    This looks wonderful on the DeepCapture web site. I have already sent it on to my Senator and Congressman and asked them to watch it. Congratulations to Mark, Patrick and Judd for your years of difficult research to expose this problem that Joe Grano sums up in a couple of sentences. In contrast to their conclusion, I think all of us feel the need for new legislation to protect the average investor from having to deal with these miscreant hedge funds on a daily basis while the SEC, who is supposed to protect us from Naked Short Selling and other indignities, gives an approving “wink and a nod”, to the market manipulators. Keep up the good work and also a salute to Charlie Gasparino who I had written off as another hedge fund shill and windbag, but for whom I now have newfound respect for his fairness.

  10. What was stated on CNBC the other day about Patrick being right all along, reminds me a the following cartoon on this topic, which I found on the website….

    Four Naked men (topless) are shown around a table, and these men are described the bottom of this cartoon as:

    “Prime Broker Brainstorming Session”
    “Emperors of New York?”

    The one standing naked man (only topless) asks the following question:


    To the right of this man, there is a drawing board with an image of a clown wearing a dunce cap and Patrick’s last name “BYRNE” in the lower right hand corner.

    To the right of this clown image is a large presentation pad with the statement:


    ( )

    As this cartoon indicates, all the attacks upon Patrick Byrne were contrived by the Wall Street Criminals and their supporters who wanted to continue their criminal activities unrecognized and unhampered.

    As this cartoon indicates… Patrick Byrne was right, all along!!!

    May the Wall Street Criminals be recognized and hampered with prison terms!

  11. Taken from a poster on Investorsvillage on the OSTK messageboard.

    Sin-ator Chuckie on the SEC

    That’s it Chuckie. Now that the fox has cleaned out the chicken coop, raise a ruckus.

    September 3, 2009, 12:42 PM ET

    ‘Shocking’ Madoff Report Prompts Schumer to Propose a Self-Funded SEC

    Kara Scannell reports on the Securities and Exchange Commission.

    When Congress returns next week New York Democratic Sen. Charles Schumer said today he will introduce legislation that would allow the Securities and Exchange Commission to fund itself and no longer rely on the budget and appropriations process.

    Schumer contends it would bolster the SEC’s funding substantially. For example, in 2007 the SEC was granted a budget of $880 million by Congress, but the SEC took in about $1.5 billion in fees collected from financial institutions.

    SEC Chairman Mary Schapiro has said she would support a self-funding model for the agency.

    Schumer is introducing the bill in response to what he called a “shocking” report that was released in part Wednesday by the SEC Inspector General detailing the agency’s failure to follow through on six tips that could have uncovered Bernard Madoff’s multi-billion Ponzi schemes. (For more on the report, read today’s story in The Wall Street Journal.)

    “In the 28 years I’ve been an elected official I’ve rarely seen an IG report that is this shocking. It shows monumental incompetence,” Schumer said.

    He called the SEC examiners and enforcement attorneys “a gang that couldn’t shoot straight.” And said the “level of incompetence is the worst we’ve seen of a government agency since [Federal Emergency Management Agency’s] handling of [Hurricane] Katrina.”

    The New York Democrat said he hoped an increased budget would allow the staff to better train, recruit, and keep skilled investigators and examiners, and update its technology to better detect problems across the market.

    He said he hoped the bill would be included as part of a broader regulatory overhaul package that he expects to pass by year’s end.

    Financial services regulation appears to have lost some momentum this year as lawmakers have had to shift their priorities. But Schumer said that’s not so and noted there are meetings and discussions taking place behind the scenes to move legislation forward.

    “Unlike healthcare, with regulatory reform the basic paradigm of what should be done is more or less accepted,” he said.

    1. Here is what is wrong with Chuckie “shyster” Schuster. The SEC is funded by a budget. The excess money the SEC pulls in annually is allocated to other funded/budgeted federal programs. Under the Schumer proposal he will not be offering up budget contractions elsewhere, but only offer to provide more funding to the SEC though this smoke and mirrors program.

      Last year the SEC pulled in $1.8 Billion with a budget of $900 Million. The excess paid for other programs. Under Schumer, that extra $900 million comes out of taxpayers.

      The SEC doesn’t need more money to spend on incompetence, it needs more competence by those the SEC spends it’s money. The supervisors pulling in the highest dollars are mainly at fault here the same way senior managers were at fault for firing Gary Aguirre. Throwing more money at those people will resolve nothing. It will just create more victims downstream.

      1. Patchie,

        I agree. Lack of money is Not the issue the SEC has.

        The SEC management as fraternity brothers with the people they are suppose to police do NOT have the will to stop the Wall Street Criminals.

        Senator Schuster has taken a play from the SEC play-book… Always pretend you are doing something to solve a Wall Street problem so the common man and woman are fooled into thinking you are concerned for their welfare.

        When the SEC states in print, as it recently did, that Naked [Counterfeit] Shorting is NOT a CRIME, how can anyone think they are concerned about the welfare of the common man and woman?

        Giving the SEC Management more money is Not going to change the fact that Naked [Counterfeit] Shorting is NOT a CRIME in the United States according to SEC Management and SEC Commissioners.

  12. If Patrick didn’t get on cnbc and start talking about sith lords and other nonsensical characters he would have been taken more seriously right from the get go.

  13. If this article is’nt a SMOKING GUN then What is??

    Ex-SEC Lawyer: Madoff Report Misses Point

    SEPTEMBER 4, 2009, 6:14 A.M. ET
    Yahoo! Buzz
    Save This ↓ More

    NEW YORK — A former Securities and Exchange Commission lawyer who investigated Bernard Madoff in 2004 says the new report on how the agency failed to uncover his massive fraud places too much blame on staff examiners and overly generalizes about their “inexperience.”

    Genevievette Walker-Lightfoot told Dow Jones Newswires on Thursday the SEC inspector general should have focused more of his attention on how supervisors, rather than the staff examiners and investigators, handled the agency’s many stillborn probes of Mr. Madoff.

    An executive summary of the report, released on Wednesday, repeatedly emphasized what it described as the inexperience, confusion and limited expertise of staff assigned to at least six investigations involving Madoff since 1992.

    Ms. Walker-Lightfoot — who recommended more action in a 2004 investigation that was shelved — said those descriptions were overly simple, and the summary generalized too much.

    “My experience is a key example,” she said. “Here was someone who raised red flags and said “We need to look into these things.” But I wasn’t senior management, so it wasn’t my call.”

    The full report is expected on Friday, and she said she would reserve final judgment on it until then.

    Ms. Walker-Lightfoot, who is now a lawyer for the Federal Reserve Board, was part of a four-person team in the SEC’s Office of Compliance Inspections and Examinations, or OCIE, who investigated Mr. Madoff’s firm in 2004. She informed a supervisor of inconsistencies she learned of during her review and suggested following up.

    Instead, her team was ultimately diverted to another case.

    The inspector general’s conclusions should have considered what other levels in the bureaucracy did, she said. “It would have been more insightful to take a more holistic approach”.

    Her involvement in the case was first reported in July by the Washington Post, which said she left the SEC in 2006 after filing a hostile workplace complaint. It was settled in her favor, the Post reported.

    In the interview with Dow Jones Newswires, she said members of the SEC’s investigative teams had varied skill levels that the inspector general, H. David Kotz, doesn’t adequately address in the summary. “He talked a lot about the team as an aggregate,” she said.

    The lead person on any team, she said, typically had a breadth of knowledge or experience about the issues at hand.

    Her team’s investigation required at least one examiner who understood options — a skill that Ms. Walker-Lightfoot had, having worked at an equity and options exchange for about two years prior to joining the SEC.

    Ms. Walker-Lightfoot’s supervisors included Mark Donohue, who still works at the agency, and Eric Swanson, then an assistant director who ultimately married Mr. Madoff’s niece, Shana, the former compliance attorney for his firm. The inspector general found that Mr. Swanson’s romantic relationship didn’t influence the SEC’s conduct during its Madoff investigations.

    Ms. Walker-Lightfoot’s review of Madoff documents revealed inconsistencies, such as certain transactions purportedly conducted by Mr. Madoff’s firm that settled on a Sunday. “Anyone in the securities business knows they don’t settle on the weekend,” she said.

    She also noticed that equities transactions reported by Mr. Madoff often settled in one, four or six days instead of three, which is the industry standard.

    Ms. Walker-Lightfoot said her role during nearly five years as an SEC staff attorney, where she worked from 2001 to 2006, was to provide advice and opinions. “My opinion was that we needed to ask more questions,” she said.

    But the SEC boxed up that opinion, and there it sat, she said.

    Ms. Walker-Lightfoot said she still hadn’t completely absorbed the effects of her SEC experience.

    “For me, as a federal employee with almost 10 years of service, I’m disappointed that experienced people who contributed greatly on those teams are now going to have their reputations sort of blemished,” she said.

    SEC inspector general, H. David Kotz, reached by telephone, said he considered it premature for Ms. Walker-Lightfoot to criticize the summary before the full response was released. He described himself as “befuddled” by her remarks. Mr. Kotz noted the decision to release the summary was made by SEC Chairman Mary Schapiro, not by his office.

    Write to Suzanne Barlyn at [email protected]

  14. I really wouldn’t exactly trumpet Gasparino, or anyone on CNBC(Criminals Not Being Caught), as a champion of real investors so much as gamers turning the market into a upside-down, cirque de soleil, whorehouse of a hellride.

  15. Good job Charlie. Maybe you should get ahold of Jeff Liddle and do an expose on all the shenanigans at Merrill Lynch over the years.

    Mr. Liddle knows of what he speaks. You might make a mint.

  16. With kudos to Dr. Brynes, some of us remember very well the day Patrick took a call during a company cc……. He listened politely while the coming naked short attack heading for ostk was explained to him. You could almost hear him thinking…. “Trouble with open conferences is you might have to listen to some wack job calling himself bob o brian, aka ‘THE EASTER BUNNY’ of all things How polite do I have to be to him?”LOL…… After the predictions bobo made had all come true, the wheels began to turn….. Soooo, I’ll stick with my greatest praise directed towards the Easter Bunny, and all the early fighters, who have mostly disappeared. Heroes, from the early obscure efforts, in the quest for justice……

  17. wouldnt it be real cool to see some prime time commercial spots about deepcapture around 8pm on the alphabet channels?
    HINT HINT!!!!

  18. Is it getting hotter in here or is it just me appreciating all the negative publicity of our Captured SEC officals? Well here goes some more…

    Major coverage of Pee-Qwat, Aguirre, Mack in Boston Globe

    Samberg’s Pequot hedge fund, Gary Aguirre’s investigation, cover ups, Senate inquiries, etc. all covered in this excellent summation of “L’Affaire Aguirre.”

    Renewed case peers at hedge fund

    SEC dropped early review, but new revelations force agency’s hand

    By Scot J. Paltrow, Globe Correspondent | September 6, 2009

    In 2005, just as the peril to his business and reputation looked most dire, legendary hedge fund pioneer Arthur Samberg got a surprise reprieve.

    The Securities and Exchange Commission was zeroing in on evidence investigators believed showed that the vaunted high returns to investors in his Pequot Capital Management had been boosted by illegal tips of inside information. The suspected leaks involved several of the biggest US companies, including Microsoft Corp. and General Electric Co., and leading Wall Street figures such as John Mack, now Morgan Stanley’s chairman and chief executive.

    As the investigation reached a fever pitch, though, the SEC abruptly backed off. Soon it dropped the case without filing charges.

    But beginning late last year, new evidence came from an unlikely source……

    Full story:

  19. Sean,

    I love the fact that the SEC persists in casing minnows while whales like Golden Slacks can take a large dump in the pool anytime they want – an increasingly dark pool – I would add…

  20. I was right..its getting very hot in here…

    ‘Capitalism: A Love Story’ Michael Moore

    This Is It! World Premiere of ‘Capitalism: A Love Story’ Tonight …a message from Michael Moore

    Sunday, September 6th, 2009


    Well, this is it!

    Tonight, at the Venice Film Festival, I will premiere my new movie, “Capitalism: A Love Story.” After 16 months of production, I am proud to present this work of mine to you. It is unlike anything you’ll see on the silver screen this year.

    Twenty years ago this week I premiered my first film, “Roger & Me.” Tonight, my new film will premiere at the oldest film festival in the world, the Venice Film Festival in Venice, Italy. It is an incredible honor they’ve bestowed on us, and we feel very privileged to be able to present “Capitalism: A Love Story” tonight in Venice.

    The director of the festival said that our movie was “incredibly symphonic” and that he was moved by its epic nature. Jeez, these Italians! Everything’s an opera to them!

    But seriously, I do believe we’ve made something that will knock your socks off. I showed it to a friend of mine last week and he said, “It’s your most dangerous film yet.” (But I assure you, you’ll be completely safe watching it in your local theater.)

    I’ve kept a pretty tight lid on what we’ve been up to while making this movie and you’re about to see exactly what that means. It isn’t easy, in the age of YouTube and the internet, to keep something like this under wraps, but we’ve pulled it off and I can’t wait to show you this latest effort of mine.

    So wish us well tonight. We’ll be home soon to open the movie all across the country (September 23rd in New York and L.A., October 2nd everywhere else).

    I’ll leave you with a quote from Thomas Jefferson: “Banking establishments are more dangerous than standing armies.”

    Michael Moore
    [email protected]

    P.S. If you haven’t seen the new trailer for the movie, check it out:

  21. “Enough!

    Both investors and other firms on Wall Street need to know what’s going on, or the financial markets will never be considered fair again.

    Some ambitious politician like Andrew Cuomo, New York State’s Attorney General, might be up to giving Goldman a full investigation.

    But this is really a job that Washington should do.

    Either the Congressional Oversight Committee or the Justice Department should start doing their job. And if any investigator gets grief from the Treasury, then we will automatically know that there has been wrongdoing.

    Meanwhile, investors should know they could be walking into the third act of a major drama.

    And with the stock market in a mini-bubble since March, even without justification in economic fundamentals, be prepared if the curtain suddenly drops. ”

    From the above mentioned N.Y.Post article

    Finally mainstream is taking the gloves off and only 2 years too late..not bad hh? IF THERE WERE ONLY A PATTERN!!!

  22. Those of you surprised by the Aguirre story should read around more in Deepcapture. All that is coming out now was written about in DeepCapture (or its predecessor, the Overstock Auctions Message board) years ago.

    Still, it is an amazing story when you first hear it.

    It may interest you to know that Mr. Aguirre spoke at a conference in October 2007 about his travails. i followed him: that speechw as recorded and turned into (on this site). in it, I mention how Aguirre is a true American hero, and for that, the Establishment press would vilify him forever. With today’s story in the Boston Globe, I am glad to see I turned out to be wrong.


  23. Since when does integrity and ethics have a relationship with any media outlet whether it be broadcast or print. Those who are OBJECTIVE know that one is either integrious/etheical/righteous or they are NOT. Gasparino’s is an investigative journalist. He didn’t do his job. He’s no hero. He’s no crusader. He’s one who could havve been a champion but chose to not do so. It doesn’t matter whether he works for CNBC or FOX. Intergity doesn’t know which is which. Shame on him and shame on those who are like him.

    Judd/Mark/Patrick/Patch/Bobo and the many who work tirelessly to present the truth are the heros.

    And they do it not for reward but because they know the TRUTH WILL SET YOU FREE.

    I realize that deals are being cut all over the place and as they are done some whitewashing is occurring. I’d appreciate it if we didn’t lose focus of the TRUTH. Gaspirino didn’t do his job years ago. And that’s the bottom line.

  24. Patchie. If Gasparino was integrous he would have been out front championing the truth YEARS AGO as YOU/Patrick have been doing for YEARS. Then again there are MANY who could have been doing such. Instead as you know Gasparino was just one of many who dissed those who were attempting to educate and protect investors. So what to do with him and the many like him. IGNORE HIM and support those who are champions. Mark/Judd/Yourself/Patrick and the many who post here that do comprehend what the words ethical/integrous/righteous mean. Thanks. It is appreciated and respected.

  25. Madoff, Stanford,Samberg, Mack, J. Paulsen and whoever else that was a billionaire that was accused of corruption amd passed over by the SEC while they were thoroughly investigating the real big Scams like CMKM Diamonds, USXP, Eagleteck, JAGH, SDNA. Not to forget companies that have no juice such as TASR, DNDN, OSTK and the many others that took precidence over the 65 billion and 8 billion dollar Ponzi scheme. “If there were only a pattern”

    The Lehman takedown

    Good one here:



    LET THE CHIPS FALL WHERE THEY MAY!!!! Someone has to go to JAIL!!!

  26. Jim, what’s the matter? Did the same link that I provided in my post before yours re” LEH being pushed not work?? It worked fine for me. LOL!!!

  27. Sorry Sean!

    Here’s a new quote from a NYT article on A New Gordon Gekko movie planned by Oliver Stone(D):

    “”Mr. Stone also had conversations with Jim Chanos, a prominent hedge fund manager who urged him to focus less on hedge funds and more on the banking system. “There was a much more important story, a bigger story, in what happened with the system,” Mr. Chanos said.””

  28. No problem Jim just kidding around with ya. But nice piece on the Chanos convo. with Oliver Stone.. There is more than enough corruption to go around huh?

  29. Sean, amazing how Chanos has likely bribed his way into the movie business. He probably calls it an ‘investment’.

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