Tag Archive | "Marc Cohodes"

Gary Weiss earns an F

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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

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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 (321)

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A hedge fund suite for Richard Sauer


In a recent interview, SEC whistleblower Gary Aguirre offered his insights into the regulatory failings that allowed the Bernie Madoff scheme to reach such enormous proportions for so long.

Aguirre places particular blame upon the “revolving door” culture that hangs over the SEC’s workforce, with its attendant promise of a lucrative move to the private sector in store for those whose approach to regulation is deemed acceptable to the regulated.

As Aguirre puts it:

The system maintains itself, because those that stay know their turn will come if they play the game. They see a director or associate director move onto a $2 million job with a Wall Street law firm. Then, the departed employee calls back to his former colleagues and says, “you know I really don’t think there is much of a case against so-and-so, I’d like for you to take a look at it.” And the case goes away; the system goes on in perpetuity … [There’s a] culture of ‘don’t rock the boat,’ the industry does not want ‘boy scouts,’ and if you can be effective with the SEC through your contacts, that is a very valuable asset you can bring to the table.

To summarize, Gary Aguirre says that a large part of the SEC’s widely-acknowledged (though not as yet fully comprehended) dysfunction results from the self-reinforcing cycle of:

  1. High level SEC staffers accepting positions with powerful institutional market participants, in order that they might…
  2. Pressure their former associates to take regulatory action beneficial to their employers, and in the process…
  3. Impressing upon former associates the value of regulating selectively – as the former staffer had done – in order to ensure their own eventual move to the private sector.

This revolving door dynamic is at the heart of the high degree of “regulatory capture” observed at the SEC and a central focus of this blog.

But enough of the theory of the SEC’s revolving door…let’s look at it in practice (as Mark Mitchell did in a superb item last month) through the example of Richard Sauer, former assistant director of the SEC’s Division of Enforcement.

First, a little background.

In June of 2003, after 13 years with the Commission – including seven as assistant director – Richard Sauer left the SEC for the law firm of Vinson & Elkins. There, among his clients, Sauer counted Rocker Partners hedge fund.

On October 6, 2006, the New York Times published Bring on the Bears, a rather lengthy opinion-editorial authored by Sauer, which argues, on the surface, that short sellers are as vital to healthy markets as predators are to healthy ecosystems.

Fair enough.

But set in the shadow of that well-worn market truism are some disconcerting clues as to Sauer’s mindset, both present and past.

For one, Sauer is dismissive of the uptick rule (a provision created to prevent bear raids intended to drive a company’s stock down) as an unfair vestige of a by-gone era, calling for its elimination.

For another, Sauer reveals that while at the SEC, he initiated many investigations into public companies based on the tips from short sellers betting on a drop in those companies’ stock prices. Indeed, he says short sellers were his only source for these kinds of investigations.

And for yet another, Sauer defends the relationship short-biased hedge funds have with journalists such as Herb Greenberg, Roddy Boyd, Carol Remond and Bethany McLean, while calling on the SEC to initiate enforcement actions against companies that “attribute their woes to conspiracies by short sellers,” and “retaliate against critics through defamation campaigns and manipulative short squeezes.”

As unsound as his logic is, on one point we can be certain: Sauer is at least telling the truth. A former co-worker confirms that while he and Sauer worked together at the SEC, Sauer had been involved, at least tangentially, in most of the investigations instigated by short-selling hedge fund Rocker Partners.

But the most telling sentence in Sauer’s op-ed piece is the one he didn’t even write, but which appears a the end, as an editor’s note. It reads:

Richard Sauer, a former administrator in the Securities and Exchange Commission’s enforcement division, joined the management at a short-biased hedge fund this week.

Of course, that short-biased hedge fund turned out to be Rocker Partners (which had recently changed its name to Copper River Partners).

In December of 2006 Institutional Investor Magazine published a small story on Sauer’s new gig, noting that “[hedge] funds regularly brought [Sauer] complaints of possible wrongdoing at companies they were betting against.”

When asked whether his job description at Rocker Partners might include getting future SEC investigations launched, Sauer responded, “it remains to be seen.”

In point of fact, thanks to emails produced through discovery in the Fairfax Financial (NYSE:FFH) vs. SAC Capital, et al, lawsuit, we know that there was nothing at all remaining to be seen, for by mid-November of 2006, Sauer had already emailed keyesr@sec.gov (someone he apparently knew well enough to address only as “Rob”), pointing him to one of the anti-Fairfax sites set up by Spyro Contogouris, and attempting to spin Contogouris’ then-recent arrest on embezzlement charges as a Fairfax-motivated act of retribution.

In light of what we’ve just learned, let’s revisit Gary Aguirre’s theory of regulatory capture at the SEC:

  1. Former Associate Director of Enforcement Richard Sauer accepts a position with Copper River Partners, a short-biased hedge fund known to be heavily shorting Fairfax Financial.
  2. Sauer pressures former SEC colleague Robert Keyes to take regulatory action likely to negatively impact the share price of Fairfax.
  3. Keyes is impressed by the need to regulate selectively – as Sauer had most likely done while at the SEC – in order to ensure his own eventual move to the private sector.

And the cycle continues.

Of Aguirre’s three requirements, we can state with certainty that in the case of Richard Sauer, the first two are satisfied. It is my opinion that the third requirement has been, as well.

What all this means is not that Richard Sauer is a bad person, for I don’t know a thing about his character. What I do know is that he has spent most of his professional career enabling bad people, first from within a fatally flawed regulatory agency, and later from without.

Mr. Sauer, if you’re reading this, given your recent unemployment following Copper River’s collapse, I sincerely hope you’ll hold out for a job that breaks the cycle of regulatory capture and actually makes the world a better place in the process.

If this article concerns you, and you wish to help, then:

1) email it to a dozen friends;

2) go here for additional suggestions: “So You Say You Want a Revolution?

Posted in Our Captured Federal Regulator the SEC, The Deep Capture CampaignComments (16)

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Rocker Partners and Bethany McLean: the smarmiest guys in the room


In a recent item, I concluded — based on my analysis of an email exchange between former Fortune reporter Bethany McLean and Copper River Partners (formerly known as Rocker Partners) hedge fund manager Marc Cohodes — that McLean wrote a highly critical article about Fairfax Financial Holdings (NYSE:FFH) with the expectation that her work would cause FFH stock to drop precipitously in value.

By way of review, the evidence shows that Marc Cohodes of Rocker Partners hedge fund first approached Bethany McLean about Fairfax on December 7, 2006. Bethany then met with Rocker Partners employee (and former SEC attorney) Richard Sauer 11 days later, and presumably began work on what would become her March 6, 2007 article The inside story of a Wall Street battle royal shortly thereafter.

The evidence further demonstrates that when, by March 21, 2007, FFH stock price had gone up 45 points instead of down as expected, both McLean and Cohodes were unhappy.

Why would this be?

Anybody familiar with the ongoing conversation held on this blog knows the answer, but not wanting to take for granted that all readers here are either sufficiently seasoned or in agreement, I offer the following, which was, like the above-referenced email exchange, gleaned from the many documents gained through discovery in the Fairfax Financial vs. SAC Capital, et al, lawsuit; specifically, from records of Rocker’s evolving short position in Fairfax stock during the months before and after the publication of McLean’s article.

Beginning on January 4, 2007: ten trading days after McLean met with Richard Sauer, Rocker Partners shorted $2.4-million in Fairfax stock.

In February, Rocker added just over $100,000 to their Fairfax short.

Then, on March 1, 2007, three trading days before McLean’s article, Rocker added another $1.5-million to their position.

All told, Rocker was betting at least $4-million that the price of Fairfax stock would drop.

But unfortunately for Rocker, that’s not what happened.

Indeed, Fairfax stock rose a healthy 20% between March 6th and 22nd, when Rocker’s Marc Cohodes emailed McLean, wondering why Fairfax wasn’t dropping as a result of her story, as expected.

Apparently satisfied that circumstances were unlikely to improve, that very day Rocker began covering its short position…97,000 shares worth, to be exact. By the end of May, Rocker’s entire Fairfax short position was closed out, at a substantial loss.

Of course that’s all interesting, but as always, there’s more.

An analysis of the failed trades in Fairfax stock recorded and disclosed by the SEC for that period proves instructive.

Most notable is the sharp decline in FFH failures to deliver observed at the end of May, 2007. In fact, with the exception of a transient spike on June 8, fails are essentially reduced to zero at precisely the same time Rocker Partners closes out its FFH short position.

Given such a deep commitment to cheating, I find it surprising Rocker Partners never managed to be a more successful hedge fund.

If this article concerns you, and you wish to help, then:

1) email it to a dozen friends;

2) go here for additional suggestions: “So You Say You Want a Revolution?

Posted in Journalists Tried to Be Players But Became Pawns, The Deep Capture CampaignComments (43)

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The word on TheStreet.com


One of the central theses of The Story of Deep Capture, Mark Mitchell’s epic work of media criticism, is that the staff of TheStreet.com is overwhelmingly beholden to the interests of a few criminal, short-selling hedge funds.

Herb Greenberg, Dan Calorusso, Dave Kansas, Jesse Eisenger: all launched their careers at TheStreet.com.

Such an ignominious list of alumni is matched only by the institution’s co-founder: Jim Cramer, and early investor: David Rocker (founder of Rocker Partners hedge fund).

There’s little doubt that TheStreet.com has been home to more than its fair share of captured journalists. What’s less clear is the matter of cause and effect: does the organization excel at breeding, or merely attracting such people?

Based on the example of former TheStreet.com writer Peter Eavis — contrasting what can be learned about him in the many documents recently made public in the lawsuit pitting Fairfax Financial against SAC Capital and several other hedge funds, with what he’s accomplished since — I’m inclined to believe that the dysfunction at TheStreet.com is a product of the toxic culture of the place, and that well-intended writers with talent who leave early enough have the capacity to redeem themselves.

Peter Eavis features prominently in several documents acquired through discovery in the Fairfax case. The earliest mention of him appears in an email dated July 10, 2002, in which John Hempton told Rocker employee Monty Montgomery “I have Peter interested” in his belief that Fairfax Financial was a fraud.

Later, short selling hedge fund manager Jim Chanos refers to Eavis as John Hempton’s “guy”.

On January 15, 2003, Eavis published his first column on Fairfax: Unsure times for insurer Fairfax Financial, making a special effort to attack the integrity and business acumen of Fairfax CEO Prem Watsa.

While the tone of that piece implies plenty about Eavis’s state of mind when he wrote it, somewhat more telling is the comment he uses to preface the article when sending it, just 20 minutes after publication, to Rocker hedge fund employees Marc Cohodes and Monty Montgomery:

“Watsa good old Canadian insurer to do?”

One month later, Eavis publishes Fairfax Tirade Can’t Obscure Sea of Red, comparing Prem Watsa to, among other things, a wounded animal.

Less than 20 minutes later, Eavis sends the column to Montgomery and Cohodes, prefaced by:

“Prem gets nasty.”

Exactly one month later, it was Eavis again, with Fairfax’s Buffett Pose Falls Short, which he again promptly sent to Montgomery and Cohodes, this time commenting:

“Imitation gives way to evisceration.”

On April 3, 2003, Eavis is back on the attack, with Fairfax Walks the High Wire on Rates, which he also wastes no time in sending Montgomery and Cohodes, noting:

Prem in the bunker.”

One month and two days later, Eavis writes Fairfax Fog Only Thickens, calling the company “beleaguered” despite its having just announced first quarter earnings of $10.60 per share. Eavis claims he offered Fairfax an opportunity to respond, but that the company “didn’t immediately return a call seeking comment.”

The lack of a prompt return call might have been a result of the fact that Eavis filed his column at 7:10am EDT.

While Fairfax employees likely were not in the office at that early hour, we know Eavis was, as he emailed the column to Montgomery and Cohodes within six minutes, prefaced by:

“More on the anti-Buffett.”

Finally, on May 15, 2003, we see the most telling email exchange of all, this time following Eavis’s column Fairfax Is Banking on the Luck of the Irish.

In stark contrast with the victorious tone of the emails alerting Montgomery and Cohodes to his four earlier columns, Eavis is sheepish when announcing this latest, saying:

“Two numerical errors in the first version, so I’m re-sending this. The mistakes made Fairfax look better than it should. A link to the corrections can be found at the bottom of the piece. Apologies.”

Apologies?

Apologies!

Hey, Peter…even the best reporters make mistakes. That’s why pencils have erasers, as they say, and why publications have “Corrections and Clarifications” sections. If you owe anybody an apology, it’s your readers, which was taken care of in the body of the correction itself.

And yet, Eavis apparently felt apologies were also due Rocker Partners hedge fund, where an anticipated payday depended upon Fairfax looking as bad as possible.

Why on earth would Eavis feel such a debt to Rocker?

A little less than an hour later, Monty Montgomery replied, writing:

“…….boy, hard to believe, but i think it’s very true…..this ends up with Hempton summoned to toronto to tell the authorities/regulators how he figured it out when no one else could……toronto’s just across the lake from the farm, that will be a good excuse for us all to get together there and throw back a couple of cold beers…….”

To which Eavis responded:

“sounds very tempting — both the farm and the ringside seat for watsa’s comeuppance.”

I’d be hard pressed to list all the standards of ethical journalism Peter Eavis violated in just his first five months of covering Fairfax Financial.

But if I were to try, I’d start by pointing out the deep conflict of interest inherent to obviously using his column as a tool to make David Rocker, one of his employer’s largest investors, rich.

Interestingly, in the months to follow, Eavis seemed to lose interest in Fairfax, his frequency of coverage plummeting from over one column a month to less than one per quarter. About that time, he also seems to have quit seeking the approval of anybody at Rocker Partners.

Then, in 2006, Eavis left TheStreet.com for the Wall Street Journal, where he has evolved into a quite prolific and skilled contributor, whose broad body of work appears not to include anything relating to Fairfax.

Is Peter Eavis corrupt? I’d have to say that no, I don’t think so. At least not corrupt after the tradition of Bethany McLean.

Instead, I suspect the culture at TheStreet.com to be very corrupting, though the condition does not have to be a terminal one.

Finally, I wish to point out that in seeking his comment, I did establish contact with Peter Eavis, and at his request provided copies of the above-referenced emails. I was disappointed when he failed to offer a response two days ago, as promised. Should Peter change his mind at any time, I will gladly append his comments below.

If this article concerns you, and you wish to help, then:

1) email it to a dozen friends;

2) go here for additional suggestions: “So You Say You Want a Revolution?

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Bethany McLean: your benefit of the doubt is hereby revoked


There’s no sense denying it: reporters depend on sources, and in the mind  of most business journalists, a connected hedge fund manager will always prove a more valuable source than even the CEO of a public company.

Hence, as I’ve reminded my fellow market reformers time and time again, it is not necessarily a sign of corruption that some business journalists — Bethany McLean included — regularly toe the hedge fund line.

However, as I’ve very recently learned — at least in the case of Bethany McLean — I was wrong.

What changed my mind?

Christmas.

Rather, the early Christmas that arrived for me in the form of about 1,000 pages of discovery just unsealed in the Fairfax Financial (NYSE:FFH) vs. SAC Capital, et al, lawsuit, in which Fairfax claims a conspiracy (or “Enterprise” as it is termed in the suit) involving multiple short-selling hedge funds, financial analysts and business journalists intent on destroying the company for monetary gain.

Included in this mass of documents are hundreds of emails and instant message transcripts between hedge fund managers, their operatives and such “journalists” as Bethany McLean, Herb Greenberg, and Roddy Boyd.

Almost without exception, each of these is immensely useful in understanding how these folks all relate to each other. But among them all, the most revealing — to say nothing of damning — are those between Bethany McLean, then of Fortune, and the upstanding folks at hedge fund Copper River Management.

The emails appear below in blue, with my comments in black.

From: Marc Cohodes
Sent: Thursday, December 7, 2006 3:21:12 PM
To: Bethany McLean
Subject: ffh

FFH is the Canadian Enron and it could even be worse…We are sending you stufff.. I suggest since [Copper River employee and former SEC attorney Richard] Sauer is on the East Coast (for now) that you 2 meet, and soon… there is an “enterprise” here and he can lay it out clear as day.

It bears noting that, according to filings in the Fairfax suit, the various participants in the attack on Fairfax stock referred to their effort collectively as “the Enterprise”. Whether or not this is what Cohodes was alluding to when using the term — which might not otherwise belong within quote marks in this context — is not clear, but certainly suggestive.

From: Bethany McLean
Sent: Thursday, December 7, 2006 3:48:43 PM
To: Marc Cohodes
Subject: Re: ffh

Makes sense. Send me whatever you can think of – the more documents the better!

Without Cohodes offering a bit of proof to back his Enron/Fairfax comparison, McLean finds it “makes sense” and commits to move ahead.

From: Marc Cohodes
Sent: Thursday, December 7, 2006 3:51:37 PM
To: Bethany McLean
Subject: Re: ffh

don’t you worry…where do you want the stuff fed-exed to… I would set up a time for Sauer to come and see ya.. His code name is “Lavaman”…

Cohodes then forwards this exchange to employee  Rick Sauer, who schedules a meeting between himself and an unusually eager McLean, set for one week thence.

The outcome of that process was McLean’s scathing March 6, 2007 Fortune piece: The inside story of a Wall Street battle royal.

How can I be certain that this particular story was the direct result of the Cohodes’s efforts? The answer to that question is where the situation becomes particularly disturbing…sufficient to leave me feeling physically ill, and prepared to officially add Bethany McLean to the short but distinguished list of truly captured and corrupt journalists.

From: Marc Cohodes
Sent: Wednesday, March 21, 2007 9:51 AM
To: Bethany McLean
Subject: ffh

you hear anything there??? the stock is up 45 points since your piece and I dont understand it…

Of note: on March 5, 2007 FFH closed at $190.09, and on March 21, 2007, FFH closed at $234.53, a difference of $44.43.

From: Bethany McLean
Sent: Wednesday, March 21, 2007 11:51:57 AM
To: Marc Cohodes
Subject: Re: ffh

I’m getting the same question from other people. No, I don’t have a clue. I’m worried they’ve gotten the SEC or the Southern District to take them seriously – the Spyro [Contogouris] stuff makes you realize anything is possible – and they’re leaking the news to shareholders ahead of time. What do you think?

A day later, Cohodes icily responds with nothing more than his cell phone number.

From: Marc Cohodes
Sent: Thursday, March 22, 2007 5:12 PM
To: Bethany McLean
Subject: Re: ffh

415-350-88**

Based on McLean’s reply, we can presume she followed Cohodes’s tacit demand, and that the conversation was less than pleasant.

From: Bethany McLean
Sent: Thursday, March 22, 2007 6:12:48 PM
To: Marc Cohodes
Subject: Re: ffh

Sorry to be a little bad-tempered. This FFH story almost killed me, so I hate hearing that it was pointless. Maybe it’ll be a long, slow thing..

I suspect the emails you’ve just read are the real reason Bethany McLean made a sudden departure from the world of business journalism earlier this year.

As for me, it’s been nearly 24 hours since I first encountered this exchange, and yet I still cannot read it without feeling like I’ve just taken a blow to the solar plexus.

Seeing proof that both a hedge fund manager and an ostensibly reputable business writer viewed the sacred institution of journalism as a means of wrecking a company, and that they both also felt disappointment when their efforts proved insufficient, with the “journalist” finding solace in the prospect that the company’s eventual destruction might simply be a “long, slow thing” literally leaves me breathless.

Stay tuned for still more of the explosive revelations found within the reams and reams of discovery in this case.

If this article concerns you, and you wish to help, then:

1) email it to a dozen friends;

2) go here for additional suggestions: “So You Say You Want a Revolution?

Posted in Journalists Tried to Be Players But Became Pawns, The Deep Capture CampaignComments (56)

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Roddy Boyd Sucks It Like He’s Paying the Rent (Fortune Magazine)


In the adult novelty & video arcade shop that is our New York financial establishment, one of the mop-and-spooge-bucket boys is Roddy Boyd, formerly of the New York Post (for folks who move their lips when they read Entertainment Weekly), and currently, of Fortune Magazine (also known as “People Magazine for Capitalists”). I have met Roddy on occasion, and a more seedy and furtive character would be difficult to name. Many years ago I knew a one-eyed Chinese guy named “Chaney” who ran a Bangkok pawn shop/mail-drop who was (it was rumored) working for Taiwanese, Chinese, and Soviet intelligence, simultaneously, but by appearances anyway, Chaney was a model of probity and fair-dealing when compared to Mr. Boyd.

Admittance into Roddy’s New York financial journalism spooge-bucket-brigade is conditional upon acceptance of The Fundamental Principle and First Corollary of that august fraternity:

The Fundamental Principle – Hedge funds can do no wrong, particularly if they belong to a small constellation whose brightest lights are Stevie Cohen, Dan Loeb, David Einhorn, Jim Chanos, David Rocker & Marc Cohodes.

The First Corollary –  If any corporation or individual appears to have been wronged by activities of any of these hedge funds, using methods up to and including stock counterfeiting and manipulation, blackmail, harassment, and intimidation, use of private eyes and internal moles, inciting endless and expensive investigations that go nowhere, and so on and so forth, it must only be because they deserved it (for proof, see The Fundamental Principle).

Today Fortune Magazine’s Roddy Boyd gives fine illustration of these rules in an article on  Copper River Partners (née Rocker Partners). This is the same Copper River/Rocker Partners whose exploits are chronicled throughout DeepCapture, and who have been frequent beneficiaries of reportorial lotion-jobs from Roddy, Karen Richardson (WSJ), Herb Greenberg (CBSMarketWatch), Joe Nocera (New York Times), and Jim Cramer (CNBC & TheStreet.com), and have been long-time recipients of  Bethany McLean’s highly-regarded regulars-only service. (Full disclosure: Copper River is also on the business end of a Marin County lawsuit filed by Overstock.com, in which I played modest role.)

In today’s think-piece, Roddy treats us to such insights as:


  • But for noted short-sellers Copper River Management, a $1 billion hedge fund based in Larkspur, Cal., the month turned into a perfect storm. A devastating combination of counter-party failure, sudden regulatory edicts and margin calls conspired to turn the fund’s performance on its ear, leading to a 55% loss in just two weeks.” Translation: In the last two weeks Copper River lost over half of its billion dollars, though not through any fault of its own. Instead, counter-party failure, regulators, and those pesky margin calls “conspired” to create “a perfect storm” that lost the half-billion dollars.


  • In case the point was lost that none of this had to do with the quality of Copper River’s investments, Roddy Boyd writes it out. He really does, in those words: “What’s worse for Copper River is that the battering had nothing to do with the quality of its investments.”


  • We are treated to a bit of financial arcana: “On top of that, as Lehman unwound its own internal hedges to the Copper River trades, its trading desks bought shares of these companies, driving up their prices and leading to losses for Copper River.” Translation: Lehman sold puts to Copper River that Lehman then hedged by shorting stock (most likely in abuse of the option market-maker exception), and when Lehman covered those shorts it hurt Copper River, whose investment strategy assumed an environment where shorts rarely need cover (and understandably so). As far as Roddy Boyd is concerned, the possibility that a short might “cover” (that is, “at some point obtain and deliver that which they have sold”) and thereby cause loss to a favored hedge fund has “nothing to do with the quality of its investments.”


  • As though that litany of impositions were not harrowing enough, Roddy chronicles further injustices suffered by Copper River: “That was bad enough, but on September 19, the bottom fell out for the fund. That was when the Securities and Exchange Commission ordered unprecedented restrictions in short sales” (as our nation’s financial system was imploding). And further, “As prices in those stocks shot upwards, Copper River was forced to cover – or buy back – some of its positions at steep losses. “ This is intolerable: how could a hedge fund such as Copper River make money if it has to deliver what it sells?


  • And lastly, this chestnut: “The rising stock prices also led to a series of margin calls (demands for additional cash collateral to be deposited in a margin account) from Goldman Sachs, Copper River’s prime broker.” I’m with Roddy on this one: it’s damn inconsiderate of Goldman Sachs to insist that Copper River have funds to back its play.


But perhaps I am too hard on Roddy. “Out of the crooked timber of humanity no straight thing will ever be made,” said Kant. A gal moves to the big city, gets behind, does things of which she is not proud. Molded are we all of imperfect clay.

But normally, she doesn’t write home about it.

It’s just Roddy’s ill fortune to have to perform these acts in national print.

Posted in Journalists Tried to Be Players But Became Pawns, The Deep Capture CampaignComments (3)

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Roddy Boyd Sucks It Like He's Paying the Rent (Fortune Magazine)


In the adult novelty & video arcade shop that is our New York financial establishment, one of the mop-and-spooge-bucket boys is Roddy Boyd, formerly of the New York Post (for folks who move their lips when they read Entertainment Weekly), and currently, of Fortune Magazine (also known as “People Magazine for Capitalists”). I have met Roddy on occasion, and a more seedy and furtive character would be difficult to name. Many years ago I knew a one-eyed Chinese guy named “Chaney” who ran a Bangkok pawn shop/mail-drop who was (it was rumored) working for Taiwanese, Chinese, and Soviet intelligence, simultaneously, but by appearances anyway, Chaney was a model of probity and fair-dealing when compared to Mr. Boyd.

Admittance into Roddy’s New York financial journalism spooge-bucket-brigade is conditional upon acceptance of The Fundamental Principle and First Corollary of that august fraternity:

The Fundamental Principle – Hedge funds can do no wrong, particularly if they belong to a small constellation whose brightest lights are Stevie Cohen, Dan Loeb, David Einhorn, Jim Chanos, David Rocker & Marc Cohodes.

The First Corollary –  If any corporation or individual appears to have been wronged by activities of any of these hedge funds, using methods up to and including stock counterfeiting and manipulation, blackmail, harassment, and intimidation, use of private eyes and internal moles, inciting endless and expensive investigations that go nowhere, and so on and so forth, it must only be because they deserved it (for proof, see The Fundamental Principle).

Today Fortune Magazine’s Roddy Boyd gives fine illustration of these rules in an article on  Copper River Partners (née Rocker Partners). This is the same Copper River/Rocker Partners whose exploits are chronicled throughout DeepCapture, and who have been frequent beneficiaries of reportorial lotion-jobs from Roddy, Karen Richardson (WSJ), Herb Greenberg (CBSMarketWatch), Joe Nocera (New York Times), and Jim Cramer (CNBC & TheStreet.com), and have been long-time recipients of  Bethany McLean’s highly-regarded regulars-only service. (Full disclosure: Copper River is also on the business end of a Marin County lawsuit filed by Overstock.com, in which I played modest role.)

In today’s think-piece, Roddy treats us to such insights as:


  • But for noted short-sellers Copper River Management, a $1 billion hedge fund based in Larkspur, Cal., the month turned into a perfect storm. A devastating combination of counter-party failure, sudden regulatory edicts and margin calls conspired to turn the fund’s performance on its ear, leading to a 55% loss in just two weeks.” Translation: In the last two weeks Copper River lost over half of its billion dollars, though not through any fault of its own. Instead, counter-party failure, regulators, and those pesky margin calls “conspired” to create “a perfect storm” that lost the half-billion dollars.


  • In case the point was lost that none of this had to do with the quality of Copper River’s investments, Roddy Boyd writes it out. He really does, in those words: “What’s worse for Copper River is that the battering had nothing to do with the quality of its investments.”


  • We are treated to a bit of financial arcana: “On top of that, as Lehman unwound its own internal hedges to the Copper River trades, its trading desks bought shares of these companies, driving up their prices and leading to losses for Copper River.” Translation: Lehman sold puts to Copper River that Lehman then hedged by shorting stock (most likely in abuse of the option market-maker exception), and when Lehman covered those shorts it hurt Copper River, whose investment strategy assumed an environment where shorts rarely need cover (and understandably so). As far as Roddy Boyd is concerned, the possibility that a short might “cover” (that is, “at some point obtain and deliver that which they have sold”) and thereby cause loss to a favored hedge fund has “nothing to do with the quality of its investments.”


  • As though that litany of impositions were not harrowing enough, Roddy chronicles further injustices suffered by Copper River: “That was bad enough, but on September 19, the bottom fell out for the fund. That was when the Securities and Exchange Commission ordered unprecedented restrictions in short sales” (as our nation’s financial system was imploding). And further, “As prices in those stocks shot upwards, Copper River was forced to cover – or buy back – some of its positions at steep losses. “ This is intolerable: how could a hedge fund such as Copper River make money if it has to deliver what it sells?


  • And lastly, this chestnut: “The rising stock prices also led to a series of margin calls (demands for additional cash collateral to be deposited in a margin account) from Goldman Sachs, Copper River’s prime broker.” I’m with Roddy on this one: it’s damn inconsiderate of Goldman Sachs to insist that Copper River have funds to back its play.


But perhaps I am too hard on Roddy. “Out of the crooked timber of humanity no straight thing will ever be made,” said Kant. A gal moves to the big city, gets behind, does things of which she is not proud. Molded are we all of imperfect clay.

But normally, she doesn’t write home about it.

It’s just Roddy’s ill fortune to have to perform these acts in national print.

Posted in Journalists Tried to Be Players But Became Pawns, The Deep Capture CampaignComments Off on Roddy Boyd Sucks It Like He's Paying the Rent (Fortune Magazine)

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