I remember not too long ago people who said that Wall Street is full of crooks were considered to be off-kilter. At the same time, it was commonly understood that they were saying the obvious, but for some reason they weren’t supposed to say it.

Things have changed.

Have a listen to a speech recorded in the video below. The speech begins at 2:08, after the intro by the off-kilter guy in a t-shirt (don’t know who he is), and the speech was given at (of all places) the Philadelphia Federal Reserve by (none other than) economist Jeffrey Sachs, named by Time magazine as one of the 100 “Most Influential” people in the world.

Sachs says that Wall Street is full of crooks.

Not just that. Sachs said that, “I meet a lot of these people on Wall Street on a regular basis. I’m going to put it very bluntly. I regard the moral environment as pathological. I’m talking about the human interactions I have. I have not seen anything like this, not felt it so palpably…they have  no responsibility to their clients, they have no responsibility to counterparties in transactions. They are tough, greedy, aggressive, and feel absolutely out of control, in a quite literal sense. And they have gamed the system to a remarkable extent, and they have a docile president, a docile White House, and a docile regulatory system that absolutely can’t find its voice….We have a corrupt politics to the core.”

Or in the DeepCapture vernacular, Washington has been “captured” by financial miscreants.

Sachs also rails against (among others) Goldman Sachs and short seller John Paulson for manufacturing synthetic CDOs (i.e mortgage derivatives deliberately designed by short sellers to self-destruct). Basically, he says what we’ve been saying for years, but what most prominent economic professors dared not say in speeches at the Federal Reserve—not, anyway, until now. And when prominent economists start talking like this (he even criticizes fractional reserve banking) in speeches at the Federal Reserve—well, that’s a revolution in the making. Wait and see.

Click here to listen to the speech.

 

 

 

 

The SAC Capital Advisors insider-trading scandal has inspired an episode of the fictional television program “Person of Interest.” The show features a plotline that was probably taken from recent media headlines about SAC Capital, but we might humbly suggest that the show instead feature a plotline that DeepCapture published more than three years ago.

The CBS crime drama told the tale of insider-trading at a hedge fund called “VAC Capital,” a clear reference to SAC Capital, and just as the real SAC trader Mathew Martoma has been accused of earning for SAC Capital a massive sum ($276 million) from trading on tips about Alzheimer’s drug trials that he received from a University of Michigan professor, so too does the VAC trader turn a massive profit (inflated to $500 million for the purposes of television titillation) from an inside tip. However, readers of DeepCapture might recall that the full (true) story is a lot worse than just that.

In 2009, DeepCapture published a book-length story (“Michael Milken, 60,000 Deaths, and The Story of Dendreon”) demonstrating that Milken had worked with “captured” doctors to derail FDA approval for a promising cancer treatment while promoting less-than promising treatments from which they stood to profit. That story also demonstrated that there was a high probability that a small group of hedge funds, including SAC Capital, had not just traded on inside information about the FDA’s decisions, but had perpetrated manipulative short selling attacks on the stock of the company, Dendreon, that was manufacturing the promising cancer treatment.

I am no TV producer, but it seems to me that Wall Street miscreants trying to destroy companies with promising medical treatments (i.e. killing people, which is exactly what they are doing) is better television than miscreants merely “making a killing” on inside information. Or maybe not. It could be that the old narrative of Gordon Gecko, the greedy but charming rogue scoring the big bucks from his clever reading of inside information, is what people want to see on their TV screens—not the far uglier truth. Even the major U.S. news organizations seem intent upon portraying SAC Capital’s insider traders not as destructive miscreants, but as basically harmless rogues, perhaps even worthy of our respect and admiration.

During the three years while hedge funds were attacking Dendreon’s stock price and Milken was successfully scheming with FDA doctors to derail Dendreon’s cancer treatment (more specifically, a treatment for prostate cancer), more than 60,000 men who would have benefited from that treatment instead died before their time. In fact, Wall Street miscreants nearly destroyed Dendreon, but thanks largely to citizen activists (and not the media) who exposed the corruption that led to the FDA initially denying approval to Dendreon’s cancer treatment, the FDA did (albeit three years too late) finally approve the drug–so maybe it was a Hollywood ending, after all.

Either way, Wall Street miscreants are attacking many other companies with promising medical treatments…and nobody (aside from a few citizen activists) is watching.

Evidence suggests that Bernard Madoff, the “prominent” Wall Street operator and former chairman of the NASDAQ stock market, had ties to the Russian Mafia, Moscow-based oligarchs, and the Genovese organized crime family.

And, as reported by Deep Capture and Reuters, Madoff did not just orchestrate a $50 billion Ponzi scheme. He was also the principal architect of SEC rules that made it easier for “naked” short sellers to manufacture phantom stock and destroy public companies – a factor in the near total collapse of the American financial system.

* * * * * * * *

I don’t know why, but this seems like a good time to tell you a little about my personal history. Along the way, I’ll mention a murder, two suicides (or “suicides”), a punch in the face, a generous bribe, three Armani suits in bar, and a “prominent” billionaire who might know something about a death threat and a Russian matryoshka doll.

But actually, this story isn’t about me. It’s about Patrick Byrne, the fellow who got me into this mess.

* * * * * * * *

The story, like so many others, begins on August 12, 2005 – the day that Patrick Byrne, the CEO of Overstock.com and future reporter for Deep Capture (a leading investigative news outfit), delivered a famous conference call presentation entitled, “The Miscreants Ball.”

To the 500 Wall Street honchos who listened in to this conference call, Patrick said that a network of miscreants was using a variety of tactics – including naked short selling (phantom stock) – to destroy public companies for profit. He said this scheme had the potential to crash the financial markets, but that the SEC did nothing because the SEC had been compromised – or “captured” – by unsavory operators on Wall Street.

Patrick added that he believed the scheme’s mastermind — “just call him the Sith Lord” — was a “famous criminal from the 1980s.”

In January 2006, I was working as an editor for the Columbia Journalism Review, a well-respected ( if somewhat dowdy) magazine devoted to media criticism. Patrick had claimed that some prominent journalists were “corrupt” and were working with prominent hedge funds to cover up the naked short selling scandal, so I called to discuss.

Patrick picked up the phone and said: “Chasing this story will take you down a rabbit hole with no end.” He said that the story had it all – diabolical billionaires, phantom stock, dishonest journalists, crooked lawyers, black box organizations on Wall Street, and a crime that could very well cause a meltdown of our financial system.

Not only that, Patrick said, but “the Mafia is involved, too.”

Well, Patrick seemed basically sane. I decided to write a story about the basically sane CEO who was fighting the media on an important financial issue while harboring some eccentric notions about the Mafia.

I figured it would take a week.

* * * * * * * *

Months later, my desk was buried under evidence of short seller miscreancy, I had done nothing but investigate this story since the day I first called Patrick, and I had just gone to a topless club to meet a self-professed mobster who told me all about a stockbroker who had peddled phantom shares for the Russian Mafia and the Genovese organized crime family.

The stockbroker had taken a bullet to the head – execution-style. And the mobster said he knew who did it.

* * * * * * * *

By this time, Patrick had long-since amended his “Sith Lord” analogy to say that the short selling schemes probably had multiple masterminds with a shared ideology – “like Al Queda.”

Be that as it may, my investigation now had two areas of focus. The first was the Mafia. The second was a network of crooked journalists, investors, short sellers, and scoundrels – a great many of whom were connected in important ways to two famous criminals or their associates.

The famous criminals were Michael Milken and Ivan Boesky.

In the 1980s, Milken and Boesky were among the most “prominent” investors in America. They were also the main protagonists in what James B. Stewart, a Pulitzer Prize winning reporter for The Wall Street Journal, later called “the greatest criminal conspiracy the financial world has ever known.”

In 1989, Milken was indicted on 98 counts of securities fraud and racketeering. He did some time in prison. Upon his release, he revved up a public relations machine that was as effective as it was ruthless (Milken’s detractors had their reputations torn to shreds).

Nowadays, the press generally refers to Milken as a “prominent philanthropist.” Often, he is hailed as the “junk bond king” – a financial “genius” who “fueled economic growth” and “built great companies” by “revolutionizing” the market for high-yield debt (junk bonds).

Boesky, who helped Milken destroy great companies, was indicted on several counts of securities fraud and stock manipulation. After his release from prison, in the early 1990s, he reportedly went to Moscow to build relationships with the Russian oligarchs who were then looting the former Soviet Union.

After that, nobody heard much from Boesky.

* * * * * * * *

In the spring of 2006, I doubted that Milken or Boesky had committed any wrong-doing since the 1980s. But it was clear that many of the people in their network were up to their same old tricks – destroying public companies for profit.

I did not think that Milken or Boesky worked for the Mafia – that would be crazy. But it was clear that the Mafia was destroying public companies for profit. And it was clear that a surprising number of people in the Milken-Boesky network did have ties to the Mafia.

At any rate, the “prominent investors” in this network seemed to have many schemes.

Sometimes they seized a public company, fattened it with debt, stripped out its assets, pocketed its cash, and then killed the company off. This is what mobsters used to call a “bust-out.” In the old days, it was neighborhood wiseguys taking over local restaurants. In the 1980s, Milken and his crowd introduced the technique to the world of high-finance.

Other times, the “prominent investor” thugs acquired large stakes in a company. Then the thugs suggested to the company that they would go away only if the company were to buy back its shares at a hefty premium. In the 1980s, the Milken crowd referred to this as “greenmail.” Mobsters called it “blackmail” or “protection money.”

In still other cases, the “prominent investors” attacked the companies from the outside, employing tactics – threats, harassment, extortion – that seem straight from the Mafia playbook.

Whatever the specifics of the scheme, it was often the case that “prominent” short sellers who were tied to the “prominent investors” would eventually converged on the target companies and use a variety of equally abusive tactics either to destroy the companies or put them on the defensive.

While I do not have SEC data going back to the 1980s, the data for more recent years shows that most of the companies attacked by this network were also victimized by abusive naked short selling.

That is, somebody sold massive amounts of the companies’ stock and “failed to deliver” it for days, weeks, months – or even years – at a time.

* * * * * * * *

So back in 2006, I had begun to ask a lot of questions.

That’s when I had a strange encounter with three dudes in Armani suits.

The encounter occurred on a Thursday evening in a quiet, neighborhood dive bar, around the corner from my apartment, near Columbia University in New York – a neighborhood that does not often attract men in Armani suits. I was alone, having a beer and reading a book about Wall Street.

The Armani suits entered the bar and sat down next to me.

“Whatcha reading?” one said.

When I told him, he asked: “Anything in there about Ivan Boesky?”

“Yes,” I said, “he’s mentioned”

“Haven’t read it,” the man said.

He was silent for a few minutes. Then he laughed and announced that, by the way, he used to work for Ivan Boesky’s family. He said Boesky “is a real asshole – thinks he has so much money he can do what he wants. Hell, he might have killed people, for all I know…Heh.”

Armani shook his head. Then he said, “Hey, I got to tell you a funny story.”

This turned out to be a long and convoluted tale, the gist being that a fellow had wandered into the ladies underwear department at Saks Fifth Avenue. Apparently, this fellow thought it would be a good idea to peek into a dressing room where a lady was trying on a new pair of panties. But the lady’s husband caught the fellow and the husband happened to be packing some high-caliber weaponry, so he blew the fellow’s brains out, and now there was a big mess in the ladies underwear department.

“The guy was a pervert,” said Armani. “You know what I mean? There are some things you keep your nose out of. I would have killed the guy, too.”

With that, Armani stood up and said he was pleased to have met me.

I asked for his name. He said, “It’s John — John from Saks Fifth Avenue.”

And then he and his friends were out the door. The other two guys hadn’t said a word. None of them had bought drinks or shown any other reason for having entered the bar.

This occurred shortly after I began asking my first serious questions about Boesky. I had just met with a CNBC public relations man and I had told him that I was conducting a full-scale investigation of Boesky, and was interested in knowing more about Boesky’s ties to CNBC reporter Jim Cramer. I had determined that most of the journalists who were deliberately blowing smoke over the naked short selling issue were connected to Cramer. These included four of the five founding editors of TheStreet.com, Cramer’s online financial news publication.

Cramer, a former hedge fund manager, had planned to work out of Boesky’s offices in the 1980s. When Boesky was indicted, Cramer worked instead with Michael Steinhardt, whose biggest initial investors were Boesky, Marc Rich (later charged with tax evasion and illegal trading with Iran), Marty Peretz (co-founder, with Cramer, of TheStreet.com) and the Genovese organized crime family.

Steinhardt’s father, Sol “Red” Steinhardt, spent several years in Sing-Sing prison after he was a convicted by a New York prosecutor who described him as “the biggest Mafia fence in America.”

Also at this time, a central target of my investigation was a hedge fund called SAC Capital, colloquially known as “Sak.” That, of course, is somewhat different from “Saks Fifth Avenue.” It seemed doubtful to me that either Boesky or SAC Capital had sent the Armani-suits to threaten me.

Possibly, I thought, Armani had misrepresented his relationship with Boesky and Saks Fifth Avenue. Perhaps Armani worked for people who were concerned that I had begun investigating that execution-style murder.

Either that, or this was just one of those weird coincidences and there really was a former Boesky employee who’d found work in the brain-splattered ladies underwear department at Saks Fifth Avenue.

* * * * * * * *

My investigation continued and sometime later – on Halloween, 2006 – a guy sat down next to me at a book store. He said he’d seen me with one of my closest relatives (he was specific, but I’d rather not name the relative) and he thought I needed to be more concerned about the safety of this relative.

He said he didn’t mean to be intrusive, but he knew how hard it was to take care of relatives and he just wanted everyone to be safe.

Then another guy sat down at a nearby table, and slammed down a book. On the front cover of this book, in big bold letters, it said: “MAFIA.”

I became paranoid enough to retreat to the back of the book store. I told one of the clerks about the two guys, and I called some colleagues, who offered to send the police.

As soon as I hung up, one of the guys came up to me, smiled, and said he hoped that he hadn’t upset me. Then he left.

I told my friends not to call the police. It was probably just a strange coincidence.

Two years later, as my investigation deepened, I began receiving Internet messages from Sam Antar, a convicted felon who orchestrated the famous fraud at Crazy Eddie, the electronics retailer. In an upcoming story, I will describe Antar’s relationship with Michael Milken. I will also tell you more about the $250,000 in cash that Antar delivered to a Milken-funded entrepreneur who orchestrated a massive fraud with the Genovese organized crime family.

For now, though, I’ll just say that Antar’s messages to me have not been friendly.

In one, he wrote, “Mitchell: Do you remember what happened last Halloween?”

I had spent the previous Halloween interviewing Rotarians in Oklahoma about their Halloween canned food drive. The Halloween before that, I was in a book store where there was either a strange coincidence or a veiled death threat.

I sent Antar an email, asking what he meant. He did not reply.

* * * * * * * *

In November 2006, one of the hedge fund managers I was investigating appeared in my office and announced that he had become the primary financial backer of my department at the Columbia Journalism Review. Traditionally, the Columbia Journalism Review (a not-for-profit magazine) had been funded by large philanthropic foundations – not by hedge fund managers who were under investigation by the Columbia Journalism Review.

But now my salary would depend entirely on the beneficence of this hedge fund.

The hedge fund was called Kingsford Capital, and in upcoming stories, I will tell you more about this hedge fund.

I’ll tell you about Kingsford’s ties to naked short sellers.

I will tell you about the large sums of money that were offered to other journalists who had been working the naked short selling story.

I will tell you why it is significant that one of Kingsford Capital’s managers was Cory Johnson – a founding editor, along with Jim Cramer and the other dishonest journalists I was investigating, of TheStreet.com.

I will publish emails that shed light on Kingsford’s relationship with hedge funds that are tied to both SAC Capital and Michael Steinhardt, Cramer’s former office-mate.

In still other stories, I’ll tell you more about Steinhardt and his partners’ ties to the Genovese Mafia, Ivan Boesky, an angry Russian hooker, and a man who wanted the world to believe that he was dead.

I will also tell you about the former Genovese Mafia soldier who told a former manager of SAC Capital that he could make one of the manager’s business associates disappear in the Nevada desert. And I’ll tell you that the man who volunteered to commit this murder had once been hired to put a dead fish and a bullet hole in the car of a journalist who was investigating one of Michael Milken’s closest friends.

I’ll tell you all about it in upcoming stories.

But let me stress that I have no idea who was responsible for the strange things that occurred in 2006. That is to say, I know that Kingsford bribed the Columbia Journalism Review.

But as for the other strange occurrences – all I can say is that they were strange.

* * * * * * * *

Two days after I learned that Kingsford Capital and its cronies would be paying my salary while I finished my exposé on Kingsford Capital and its cronies, I had dinner with an economist who was exploring the naked short selling problem.

On my way home, I stopped in a café around the corner from my apartment. As I was putting on my coat to leave the cafe, a man grabbed me from behind and forcefully escorted me to the sidewalk. Outside, there were two more guys – not big guys, just regular looking fellows. They grabbed me, and the first guy delivered a single powerful punch to my eye.

I was stunned. When I finally held up my fists, the three men laughed and embraced me in a bear hug. Then they virtually carried me to the front stoop of my apartment, which was a block away. It seemed as if they knew that I lived there.

After brushing off my lapel, they said they were very sorry. They said they hoped I wasn’t offended, it wouldn’t happen again, but they were there for my own good – and, please, just “stay away from your Irish Mafia friend.”

Then they were gone. It all happened in about three minutes.

It occurred to me that this might have been just a random act of violence. It also occurred to me that the thugs might have bungled the message – that they had meant to say, “Just stay away from the Mafia and your Irish friend.”

Patrick Byrne (full name: Patrick Michael Xavier Byrne), with whom I was working extensively on the naked short selling story, is Irish. In interviews I had conducted for the story, many people had commented on Patrick’s Irishness. (In some Wall Street circles, it seems to be common for people to refer to others’ ethnicity – “Byrne, he’s an Irish guy, right?” or “The stock loan business, that’s the Italians.”)

In any case, I went to work the next day with a black eye. I said it was “just a bar fight.”

A woman in my office told me she thought it was “really cool” that I had been in a bar fight.

Later, Sam Antar, the convicted felon, posted an Internet message asking whether I “had ever been forcefully escorted out of a public building.”

As this had happened only once, I sent Antar an email asking if he was referring to the thugs who’d ambushed me in a café.

Antar did not answer my question. Instead, he quickly proceeded to write a blog saying that he had just received information that I had been “forcefully escorted out of the Columbia Journalism Review.”

* * * * * * * *

During the fall of 2006, Patrick Byrne had some strange experiences as well.

Somebody broke into Patrick’s home, and soon after, somebody broke into the home of a woman who was Patrick’s girlfriend at the time. Then somebody threw a pair of metal gardening shears through the window of the girlfriend’s restaurant.

Around the same time, Patrick’s then-girlfriend discovered that for some mysterious reason, her phone records were being sent to the home of a Russian man working for Goldman Sachs Execution and Clearing (formerly Spear, Leeds, and Kellogg – in its day, one of the most egregious naked short selling outfits on the Street).

I asked Goldman Sachs about this. I was told that the bank had investigated thoroughly and found no reason to believe that the Russian man, Elliot Faivinov, had obtained the phone records. (For anyone interested, the phone company can confirm that he did receive the phone records.)

At any rate, I have since learned that Goldman Sachs became a large donor to the Columbia Journalism Review sometime not long after Kingsford Capital announced that it would be paying my salary. Wall Street has never been so devoted to the dowdy world of media criticism.

As if all of this were not enough, one day in the fall of 2006, U.S. Senator Orrin Hatch invited Patrick to his home. As soon as Patrick entered the lobby of the apartment building, the Senator pulled him aside and said that he had credible information that Patrick’s life was in danger.

“You are up against some really nasty, vicious people,” the Senator said, “They will not hesitate to kill you.”

* * * * * * * *

Patrick kept on fighting.

As for me, I’d been investigating the Mafia, there’d been an execution-style murder, now there were these strange incidents, which might have been nothing, but getting beat up kind of freaked me out, and now I was staying up all night, squinting at my computer through my punched-in eye (which was black and blue, full of puss and swollen shut), trying to finish a story about a scandal involving the people who would now be directly paying my salary.

And so, maybe it isn’t all that surprising what happened next, which is that I snapped.

I couldn’t work anymore. I checked-out.

In the middle of November, a week or so after getting the Kingsford news, but still on perfectly good terms with my editors, I quit my job, and walked out the door.

Within a few days, I had shut down my New York apartment, and was on a plane to Chicago, where I planned to take some time off.

I had told my editor that I thought I might be killed. But I never specified, and I didn’t make an issue of the Kingsford Capital bribe until later. So I am hopeful that the good people at the Columbia Journalism Review never really knew that they were taking tainted money.

That said, my questions about this have gone unanswered.

* * * * * * * *

A few weeks later, Patrick accepted an invitation to meet an offshore investor in a greasy spoon diner in Long Island. They had never met, but over the previous year the man had fed Patrick bits and pieces of information about the workings of the phantom stock scam. The hope was that the man might have something more to say in person.

But that day at the diner, all he had was a message.

“I’ll make this quick,” the businessman said, with two other witnesses present. “I have a message for you from Russia. The message is, ‘We are about to kill you. We are about to kill you.’ Patrick, they are going to kill you. If you do not stop this crusade, they will kill you. Normally they’d have already hurt someone close to you as a warning, but you’re so weird, they don’t know how you’d react.”

In a later phone conversation with an associate of Patrick’s the man described how he received this message. He said he returned home one night and his wife told him there was a package on his desk. “And there was a beautiful little box, and inside was a matryoshka.”

Matryoshkas are those lacquered Russian dolls – the kind with multiple dolls of decreasing size inside of them.

“And I opened up the last matryoshka,” said the man, “and inside is an `F’ with a cross on it — which is from Felix…”

* * * * * * * *

A year later, I was working for a charitable service organization. Patrick called me to catch up. Pretty quickly, he was suggesting to me that I quit my job and return to the naked short selling story.

I thought about shopping the story around to magazines, but I never did. There was no way that the story could be told in a few magazine pages.

Moreover, the story represented the joint efforts of myself, Patrick, reporter Judd Bagley and many independent, volunteer researchers. This was an unprecedented collaboration, and it occurred to me that if this collaboration were to continue — as Deep Capture, the website — it could put the major news organizations to shame.

So I wrote the story – our story, filled with hard facts about a scandal.

The story that I wrote was not a magazine story. It was not a news story. It was 69 pages long, and it was “The Story of Deep Capture.”

But that was only half the story. There is much more.

For example, you do not yet know the name of the famous billionaire who might be able to tell us more about Felix, his matryoshka doll, the Russian Mafia, and the Genovese organized crime family.

* * * * * * * *

To be continued….

* * * * * * * *

Mark Mitchell is a reporter for DeepCapture.com. He has previously held writing and editing positions with the Wall Street Journal editorial page, Time Magazine in Asia, the Far Eastern Economic Review, and the Columbia Journalism Review. Email: mitch0033@gmail.com

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?“

Summary – For over 10 years Gary Weiss (once a reporter with BusinessWeek, and recently, a columnist with Forbes) has been posting under fake names to confuse, distort, and hijack Usenet groups, stock message boards, and Wikipedia, using social media to prevent the public from understanding criminal activity.

I now turn to Gary Weiss. Last year one of the most prominent journalists on Wall Street warned me, “I’ve known Weiss for years. Be careful. He’s a psychopath.” As you will see, he was neither joking nor exaggerating. I think, however, that Gary is better described as a “Scaramouch.”

In a series of brilliant investigations, Judd Bagley, a reporter-investigator-technologist friend of mine (and more recently, I am proud to say, a colleague) studied the IP footprints Gary’s computers have left scattered across the Internet for over a decade, and posted his extraordinary analyses of them on his cleverly-titled site, “Antisocialmedia.net”. Judd’s posts are as disturbing with regard to what they reveal about our society’s discourse, as they are regarding the activities of Gary himself.

It is a complex story that I recount below in as clear and straightforward a manner as I can muster. The best way for me to do that is to break it into 7 short stories. Embedded within each are links to carefully documented research . I respectfully suggest the reader try to understand these as individual stories, before synthesizing them into one complete picture.

#1) Gary’s start in social media

Gary started with simple Usenet group posting in the mid 1990’s, often making productive contributions to newsgroups devoted to matters Judaic. However, as this analysis shows, by the late 1990’s Gary had become a chronic “sock-puppeter,” that is, he maintained a stable of identities and personalities under which he could post in order to steer conversations to his ends (Gary even posted anti-Semitic statements that he could then respond to under other names). Another user caught Gary red-handed and confronted him. Establishing a pattern that would become Gary’s hallmark, when he was caught red-handed Gary Weiss practiced the “deny-deny-deny-then-disappear” school of personal responsibility.

Another pattern of Gary’s emerged as well: that of accusing anyone who disagrees with him about anything as being anti-Semitic. One person whom he has accused of hundreds of times of anti-Semitism complained to the Anti-Defamation League. Showing immense class, the ADL looked into it all and dismissed Gary out-of-hand. Notwithstanding this, Gary continues to level this allegation against that same man (under the assumption, presumably, that he understands anti-Semitism better than the ADL).

#2) Gary’s manipulation of Amazon reviews

For years Gary posted numerous reviews on Amazon praising his own books and trashing the work of other business journalists, as this analysis shows. While Gary’s sock-puppets trash other journalists (e.g., Charles Gasparino), there is one journalist whom he never bashes, but whom he uses his sock-puppets to promote: Jim Cramer. Hilariously, though they were supposed to be the work of various disinterested strangers, Gary’s sock-puppets’ glowing Amazon reviews of his own work began disappearing the moment Judd began exposing Gary’s methods.

#3) Gary goes beserk against another journalist and that journalist’ wife at the United Nations

The following remarkable history is recounted, with thorough documentation, on these two posts.

a) Ian Williams, a British journalist, was president of the United Nations Correspondents Association (UNCA) and UN correspondent for The Nation. Mr. Williams’ wife, a BBC World Service journalist (and native of Uzbekistan), also held a position within the UNCA.

b) Gary’s wife (an Indian national holding herself out as a correspondent for the Indian newspaper The Pioneer of India) applied to work within the United Nations Correspondents Association. To be admitted to the UNCA she had to demonstrate that she was in fact a journalist who covered the UN. Towards that end she submitted copies of her stories from the front page of The Pioneer of India, along with a letter from The Pioneer‘s editor, Chandan Mitra, attesting to her employment there. On that basis she was admitted to the UNCA and began working in the UN offices in Manhattan.

c) Gary’s wife coveted the UNCA position above her that was then held by Ian Williams’ wife. Gary attempted to dislodge Ian Williams’ wife from that position by claiming that Mrs. Williams had lied in order to get her visa to enter the US, so as to create an opening which his own (Gary’s) wife could take. Gary’s allegations proved false.

d) Journalists at the UNCA noticed that the stories which Gary’s wife was regularly submitting from The Pioneer to document her ongoing UN coverage were of identical size and location on the front page of The Pioneer. A bit of investigation proved that they were all forged, and had been photo-shopped on a computer. The Pioneer was contacted, and its Editor Chandan Mitra stated that Mrs. Weiss had “never been engaged by The Pioneer for any purpose,” his signature on her documentation was “an outright forgery,” as was the letterhead upon which it had been generated. Simply put, Gary’s wife was a fake : she never was a reporter for The Pioneer of India. Gary’s wife’s UN credentials were revoked and she was escorted from UN premises under armed guard.

e) Within days of the exposure of Gary’s wife and her being escorted out of the UN, Gary was on Amazon writing reviews under the name “Ted Dichtler” trashing Ian Williams’ work, and within 30 days, had founded “Mediacrity,” a blog putatively devoted to media criticism, but actually largely engaged in (anonymously) hammering away at journalist Ian Williams for being “a fourth rate hack” and continuing the demonstrably false smears against Ian Williams’ wife.

f) It should also be noted that when confronting a man on a Usenet group, Gary posted that man’s wife’s name and home address. Pretty sleazy (although the man in question was a bigot, I think good manners demand that one not get even with a guy by revealing his wife’s name and address). In contradistinction to Gary, however, Judd, ever the gentleman, wrote:

“AntiSocialMedia.net has issues with Gary Weiss, not his wife. As it happens, one of the more startling examples of abuse of social media we’ve discovered anywhere and the central theme of this, the third part of this series on Gary Weiss – cannot be told without making reference to that relationship. However, because her identity is ultimately not material to this situation, we shall only refer to her as ‘Mrs. Weiss’ (though Weiss is not her real last name) and have set this site’s comment filter to immediately reject any comments that contain either her first or last name. Comments containing any other personally identifying information belonging to Mrs. Weiss will be immediately deleted and the commenter barred from further use of this site.”

I will follow the same principle here on DeepCapture.

g) Aside from the general zaniness of the story, there are at least two take-aways from this:

i) Gary had accused Mrs. Williams of lying to get her visa, but those accusations were false. Gary did this while Gary’s own wife was forging her credentials, which credentials were the basis of her own employment at the UN. Thus, Gary and his own wife were engaged in the act of which they were falsely accusing another journalist’s wife. That act takes a sociopath (e.g., the kind who could post anti-Semitic comments while continuously accusing others of anti-Semitism).

ii) What was Mrs. Weiss doing for those years when she was given access to the UN, under the guise of being a correspondent for The Pioneer of India?

#4) Gary manipulates stock message boards

Gary also stays busy posting thousands of times per year on stock message boards, as this remarkable piece by Judd exposes. Gary’s stock message board sock-puppeting and “bashing” sometimes involves switching among 6 sock-puppets while going at it for over 24 hours at a stretch, in a remarkable display of intensity and duration. What an odd “hobby.” Curiously, the stocks with which he concerns himself generally mirror the positions of Jim Cramer, Roddy Boyd, Bethany McLean, Herb Greenberg, Carol Remond, etc.

If only there were a pattern…

#5) Gary Weiss, Pyschopath: The Prequel

At this point you are probably wondering, “Who in the hell is Gary Weiss?” Allow me to give you seven pieces of background, a-g.

a) In the 1990’s, Gary made a name for himself with a BusinessWeek series exposing the Italian Mob (in particular, the Gambino Crime Family) and its infiltration of Wall Street. Bravo. But he relied heavily on two sources. One journalist who interviewed them told me that after debriefing them, and examining materials they supplied, “I can safely say that Gary Weiss built his career in the 1990’s just typing up whatever two sources gave him.”

b) In the mid-1990’s a Forbes reporter based in Russia named “Paul Klebnikov” wrote an expose called, “The Godfather of the Kremlin?” about an alleged Russian Mafia figure named Boris Berezovsky.

c) In 1999 Al Chalem and Laier Lehmann, two New Jersey stockbrokers operating a New Jersey securities firm called “Harbor Securities,” were executed in a New Jersey mansion. The same two sources who had supplied Gary so much other material presented him with evidence that this time it was not the Italian Mafia, but the Russian Mafia, and in particular, Boris Berezovsky. Gary then ran a story that (they maintained) fabricated everything they had told him in an attempt to divert attention from Russian involvement and focus it on (in this case non-existent) Italian Mob involvement. One of Gary’s sources actually sued Gary in an attempt to get public that which he felt Gary was suppressing.

d) In 2000, Forbes’ Paul Klebnikov completed a book, The Godfather of the Kremlin. It reiterated his earlier allegations about Mr. Berezovsky, but without the question mark. Quickly there appeared a series of anonymous Amazon reviews trashing Mr. Klebnikov’s book and discounting its conclusions. On the same days these reviews appeared on Amazon, Gary had a rash of positive reviews of his work. This and the language of the reviews trashing Mr. Klebnikov’s work raise an obvious question: if these startling coincidences of timing were not in fact coincidences, why was Gary adding to his normal routine (that is, going on Amazon with sock-puppets to promote his own work) the additional labor of trying to discredit the work of a Forbes journalist (Paul Klebnikov) who was trying to expose the Russian Mob? And is this related to the claim of his own two sources that his coverage of the execution of the two stockbrokers was designed to move attention away from the Russians and onto the Italian Mob?

e) On July 9, 2004, Paul Klebnikov was assassinated leaving the Moscow offices of Forbes.

f) Days later in July, 2004, Gary left BusinessWeek. If you ever want to shut a BusinessWeek reporter up, ask, “What were the circumstances surrounding the departure of Gary Weiss from BusinessWeek?” In a notoriously gossipy crowd, it is a closely guarded secret.

g) One of the first things Gary seems to have done after departing BusinessWeek was to join Project Klebnikov, “The global media alliance investigating the July 9th, 2004 murder of Paul Klebnikov, the editor-in-chief of the Russian edition of Forbes magazine.” I’ll bet O.J. Simpson finds his wife’s real killer before Gary solves that investigation.

#6) Gary covers-up for the DTCC from within DTCC offices:

Speaking of strange places from which to post: at the heart of our nation’s stock settlement system, and hence, at the heart of the issues of concern to DeepCapture, is a nearly unknown corporation called “The DTCC.” The company provides settlement for the nation’s capital market: $1.5 quadrillion in trades are settled there every year (that is, about 30X the economic output of the entire planet). For most of its history it has largely escaped regulation: state regulators are admonished that they cannot peer inside because the DTCC is federally regulated, and the DTCC has told federal regulators it escapes their regulation due to its strange ownership structure (one former federal regulator, and one former employee of the DTCC, have both told me the feds would not know where to begin if they tried to regulate it).

In short, at the heart of the world’s economy is an enourmous black box that is regulated except on the days it’s not, and through which 30X the economic output of the world flows. It is my contention that much of Wall Street’s illegal activity is funneled through this strange entity.

The huge, nondescript building in downtown Manhattan that houses the DTCC is something of a Fort Knox. Long-gun toting guards watch the entrances, and journalists who have been inside tell me that entering it is tougher than getting into the Federal Reserve or any comparable institution.

Gary recently made a slip that revealed he was inside the offices of the DTCC, using one of their computers to post on Wikipedia about the DTCC. Given that it’s like getting into Fort Knox, I’m pretty sure that’s odd. However, it casts some light on why Gary has been stridently denying that the DTCC is dirty and that none of the issues I have been raising regarding stock market manipulation are legitimate, and why he has (according to a colleague of his in the financial press sympathetic to me) devoted 93% of his blogs to criticizing my efforts to expose the illegal Wall Street activity which, I claim, intersects within the DTCC. Just as interestingly, when given opportunity to comment, the DTCC went into cover-up mode straight out of Bizarro World.

#7) The Finale

The following heavily-documented story qualifies as “mind-blowing.” It is so extraordinary, in fact, many people find it almost impossible to synthesize. Therefore I am going to tell it by first giving a three paragraph synopsis, then by recounting the story in 14 steps, a-n, with documentation for each.

The synopsis:

The intellectual battle over the existence of criminal naked short-selling has been won. As is demonstrated throughout DeepCapture, what was dismissed three years ago as a fringe theory is now no longer in serious dispute. There is an ongoing criminal prosecution and regulators and SRO’s have recently imposed multimillion fines over it. Papers by academic and government economists have confirmed it and reputable journalists have broken news stories concerning its effects. A Bloomberg documentary concerning naked short selling was nominated for an Emmy for long-form investigative journalism. Last summer SEC Chairman Christopher Cox aknowledged that it is real and illegal. Just last week, SEC Chairman Cox again publicly and matter-of-factly discussed the reality of this crime in a hearing at the United States Senate, in answer to sharp questioning from US Senator Bob Bennett. Earlier this week, Dr. Robert Shapiro, a Fellow of the National Bureau of Economic Research, Brookings, Harvard, and a former US Undersecretary of Commerce for Economics, explained the reality and implications of this crime on Canada’s Business News Network (start at minute 17).

Yet throughout the evolution of this awareness, the Wikipedia page on naked shorting has fought a steadfast rearguard action. It will be a matter for a future historian to reconstruct in detail, but at all times the thrust of that page has been to deny and deride the emerging understanding of the issue. Since the time when complete denial became impossible, it has labored mightily to minimize the problem of naked short-selling and all the attendant issues discussed in Deep Capture, citing every critic (Gary Weiss, Floyd Norris, Joe Nocera, and Holman Jenkins of the WSJ) while allowing only barest mention of the positive attention it has received from investigative journalists and economists.

I believe that the chief reason this happened was because Gary Weiss used the name “Mantanmoreland” (and later, “Samiharris”) to hijack the Wikipedia articles on naked short selling, Patrick Byrne, and Overstock.com (as well as the page on Gary Weiss himself). In addition, all the mechanisms within Wikipedia which are supposed to prevent such an act were subverted by Wikipedia’s elites on Gary’s behalf. Judd exposed Gary within Wikipedia, but Wikipedelites suppressed Judd’s evidence. When he began posting it off-Wikipedia on AntisocialMedia.net, Wikipedelites fought to make mention of “Antisocialmedia.net” or “Judd Bagley” a thought-crime within Wikipedia (under the spurious reasoning that someone mentioning either of them had to be a sock-puppet of Judd). Hence, no evidence contrary to official doctrine was permitted at “the free encyclopedia that anyone can edit.” However, evidence slowly circulated within the Wikipedia-in-Exile-community until the conventional Wikipedians began looking into Gary. Wikipedia ‘s founder Jimbo Wales did everything possible to stop their investigation, although it turns out he knew all along that Judd was right. It has turned into a civil war within the Wikipedia community.

I turn take the paragraph immediately preceding this one, and serve its full story, cut into 14 bite-sized pieces, a-n.

The evidence:

a) Judd posted evidence that Gary was manipulating Wikipedia under the name “Mantanmoreland” (and later, “Samiharris”).

b) When confronted, Gary denied it, saying, “Similarly [Judd Bagley] continues to publish the lie that I am this ‘Mantanmoreland’ long after it was, again, denied by both myself and Jimbo Wales of Wikipedia.”

c) Judd sent evidence to a Wikipedia uber-administrator named “SlimVirgin,” who was posing as a neutral arbiter. However, as this demonstrates, when SlimVirgin received Judd’s evidence she immediately forwarded it to Gary (without even opening it herself).

d) A community debate ensued over whether Mantanmoreland was guilty of a Conflict Of Interest violation when he created and dominated the “Gary Weiss” page (i.e., whether or not he was in fact Gary Weiss). A highly regarded Wikipedia figure named “Cla68” (apparently a former military officer living in Asia with encyclopedic knowledge of so many subjects that he is revered within Wikipedia) got close to taking sides against Gary. In a step that was extremely unusual given Wikipedia’s philosophies of transparency and strict retention of all sides of a debate, Wikipedia-founder Jimbo Wales personally intervened to delete the record of the debate. As Jimbo Wales wrote:

“The page contained wildly inappropriate speculation that a notable author was sock-puppeting. As I am sure you are aware, many authors have had their careers badly damaged by being caught sockpuppeting at Amazon, etc., and it is deeply wrong for people to ask me to restore a page with such speculations in Wikipedia after the claims have already been investigated and dismissed. If there are further problems in the future, there will be no problem restoring the article at that time. In the meantime, it is my position that MOST AfD pages for living persons or active companies should be courtesy blanked (at a minimum) as a standard process, and deleted in all cases where there was inappropriate commentary. This is not the current policy, but current policy does allow for deletions of material which is potentially hurtful to people.–Jimbo Wales 01:42, 13 November 2006 (UTC)”

e) Taking things to an Orwellian extreme the “ArbCom” (“Arbitration Committee”) attempted to pass a “BADSITES” policy prohibiting mention of “Judd Bagley” and “antisocialmedia.net,” the site Judd had started to post evidence as he gathered it (all evidence having been prohibited within Wikipedia itself). The debate ran for many weeks, but throughout it, it was prohibited even to name “Judd Bagley” or “antisocialmedia.net.” That is, for many weeks a debate raged in which the accused (Judd Bagley and his site antisocialmedia.net) could not be named, nor was the accused allowed to have a voice, nor were dissenting opinions permitted (on the grounds that anyone who wrote one must be a sock-puppet of the accused). All this happened on Wikipedia, “the free encyclopedia that anyone can edit.”

f) Throughout that process, anyone trying to mention Judd or Antisocialmedia.net, or positions supported by either, was banned as a Wordbomb sock-puppet (note the circularity of this position: WikiTruth demands that Goldstein be banned, and anyone sounding like he might agree with Goldstein will be banned, because clearly, he must be a sock-puppet of Goldstein. Hey, it worked in 1984, right?)

“Any user who creates links to the attack site or references it (other than in the context of this Arbitration) may be banned.”

g) Eventually, this was actually proposed as a matter of official policy for Wikipedia (“the free encyclopedia that anyone can edit.”)

“After warning, or without warning in the case of users familiar with the issue, users who link to the attack site or reference it may be blocked for an appropriate period of time.” (emphasis added)

h) As if that were not enough, in an attempt to prevent Judd Bagely from pointing out to observers the manifest circularities, fabrications, and sheer Orwellianism of the BADSITES debate, Wikipedia blocked Overstock and 1,000 homes around Judd Bagley’s neighborhood, as was exposed in this article that appeared in the well-regarded online British tech journal, The Register.

i) That effort collapsed of its own foul weight. However,  as this other investigative piece in The Register exposed, it did spawn the creation of a secret email list for Wikipedia elites wherein they plotted how to shape the discourse within Wikipedia.

j) Just when you thought this story could not be any weirder, an email has surfaced that was written by Jimbo Wales in September, 2007 at the start of this conflagration, where he admitted already believing that Mantanmoreland was Gary Weiss (this exchange occurred on another of those secret elite-only email lists):

Mantanmoreland@gmail.com: “…I am not going to reveal my real identity to prove that just because Judd Bagley is making a fuss. Rest assured that after all that has happened I am more determined than ever to not reveal my real identity to any person associated with Wikipedia.”

jwales@wikia.com(Jimbo Wales): “I just want to go on record as saying that I believe the reason for this is that Mantanmoreland is in fact Gary Weiss.”

k) Despite this private admission, Jimbo spent the next four months publicly defaming Judd and intimidating anyone who explored Gary Weiss’s activities on Wikipedia. For example, he wrote to the renowned Wikipedian Cla68:

“I fear that you have been manipulated by lying stalkers and trolls, and I am happy to talk to you about it privately, but I am sick of the drama around this issue on this page, and it absolutely has to come to an end…– Jimbo Wales 01:32, 21 October 2007 (UTC)”

l) Despite Jimbo’s opposition (and in the face of his attempts to derail it), over the last two weeks the Wikipedia community has to its credit performed exhaustive analysis of the Mantanmoreland account (as well as “Samiharris”, an additional Gary Weiss sock-puppet) and come down overwhelmingly in favor of Judd’s original thesis.

m) Even in that setting, Wales again attempted to derail the process and deny his earlier recognition of a link between Gary Weiss and Mantanmoreland. Here Jimbo dances on an arcane postmodern distinction between “knowing” and “believing it is a fact that” (in this context it’s a distinction without a difference, Jimbo). Jimbo’s statement is a compendium of fallacies from Logic 101 (e.g., argument from authority, ignoring contravening evidence, ad hominem attacks, non sequiturs, and straw-man rebuttals).

“Because there has been unseemly and false speculation in some quarters that I know this (or related claims) to be true, and that I have admitted as such in private forums, it is important for me to state what I know and what I don’t know.

“Claims about Mantanmoreland being author Gary Weiss have been floating around for a long time. Various claims of ‘proof’ have been made, none of which I have found convincing. At times I have believed one way, at times I have believed another way. I have investigated the claims to the best of my ability and I have been unable to find proof one way or the other.

“An email I sent to Mantanmoreland and others has been widely quoted as evidence that I supposedly ‘know’ this claim to be true. Such interpretations are malarky, and most of the people making the claims appear to me to be acting in bad faith. What I said, at a point in time, was that I believed it to be true that Mantanmoreland == Gary Weiss. This was specifically in the context of a conversation in which I was trying to get more evidence… a proof, one way or the other. Me believing at a point in time in an investigation that something was true, is not the same thing as an assertion that it is true, nor of an “admission” or anything else.

“Mantanmoreland steadfastly denies being Gary Weiss. Ask him yourself if you want to know.

“Related allegations that I am protecting a ‘friend’ are nonsense. Mantanmoreland and I do not get along well at all.

“Related allegations that I have some vested interest in the underlying content dispute are even worse nonsense. I have no opinion about ‘naked short selling’. I have never sold a stock short in my life. I have no financial interests of any kind in this case. If you read anything otherwise, or hints to that effect, on the overstock.com blog or elsewhere, well, I don’t know was else to say but: nonsense. I think such allegations tell more about the people who are making them than anything else.

“Regarding the specific claim at issue here, whether Samiharris and Mantanmoreland are the same user, I can say quite firmly that I do not believe it to be true. I have interacted (argued!) with both users over an extended period of time by private email, and I have not seen any reason to think it true. The offsite ‘evidence’ relating to this comes from a highly questionable source, and furthermore strikes me as completely unpersuasive. For all we know, these are faked screenshots from someone who has engaged in a campaign of harassment and bad behavior (on-wiki and off-wiki) that has been really astounding to witness.

“I have reviewed my email archives to look for similarities between the users. I have examined email headers. I have looked for textual similarities, time patterns, etc. I see nothing to lead me to a conclusion that Sami Harris and Mantanmoreland are the same user.

“For these reasons, I do not believe it to be true that Mantanmoreland == Samiharris. —Jimbo Wales (talk) 02:19, 15 February 2008 (UTC)”

n) All but Weiss’s most dogmatic defenders were silenced, however, when a law student from Chicago published a graph showing the dates and times of all Mantanmoreland’s Wikipedia edits. In it, one can clearly note two things: the rich posting patterns of Mantanmoreland and Samiharris never overlap (statistically, highly improbable); and more importantly, a perfect “phase shift” of precisely the right duration corresponding to a period in which Gary’s own Forbes work revealed him to be in India.

Conclusion

Gary Weiss is a psychopath and a Scaramouch, but this is incidental. Here is the moral of the tale: the great dilemma that journalists face is that they want to be first with a story, but most do not have the nerve to publish a story that is too far ahead of the pack. I believe Gary Weiss went to such effort to hijack these Wikipedia articles because somewhere, someone understands that professional journalists, much as they deride Wikipedia, will never depart more than a few degrees from a Wikipedia consensus. Thus if one can hijack a page so that it simply repeats the accusations of a few co-opted journalists, then rare is the new journalist who will come along and escape that equilibrium. Thus, by hijacking the Wikipedia consensus one can corral much of the industry of modern journalism (this is all the more reason why those few journalists who departed from that consensus over the last year, however meekly or bravely, deserve admiration).

The deeper question, then, is this: how many social institutions have failed when a “journalist” is manipulating the discourse within both the news and social media, and all the mechanisms that should curtail him are short-circuited? Or, more to the point of DeepCapture, trying to drown out a scandal while simultaneously manipulating social media from within the corporation that is at the heart of that scandal?

Postscript: There is a side matter that, in all fairness to Gary, I should mention to condition your reading of what I wrote about him. It is this: I have a lady friend who for 13 years has managed and been part-owner of a superb Italian restaurant in Manhattan. Her restaurant generally receives a Zagat’s rating of 23 or 24 (with a 24-rating being the threshold for the serous foodies). In fact, the restaurant is regularly one of the lowest-priced Zagat-24’s in Manhattan. Its reviews generally range from good to stellar. Weeks after Gary joined Forbes, a harsh, puerile review of her 10-employee restaurant appeared in Forbes magazine. I’m pretty sure that’s odd, too. Because the writing was florid and made no sense it is natural to suspect Gary of having written it (note to Gary: how does a pasta dish like orecchiette taste like it is from Bombay? And “branzino” is Mediterranean sea-bass, which explains why it tastes like fish.) Of course, it could have been just a coincidence that, weeks after Gary began his relationship with Forbes, the magazine suddenly felt the need to review a small Italian restaurant managed by the woman then displaying the unfortunate judgment of dating me (full disclosure: since then she has decided to display better judgment). I don’t really know if Gary was behind it, pursuing a personal vendetta by misusing his position as a journalist to hurt my magnificent lady friend.

But it sure is his style.

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

1) Let Forbes know how you feel about their columnist by writing Forbes Managing Editor Carl Lavin at clavin@forbes.net (post a copy in the comment section here!);

2) email it to a dozen friends;

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

Summary – For over 10 years Gary Weiss (once a reporter with BusinessWeek, and recently, a columnist with Forbes) has been posting under fake names to confuse, distort, and hijack Usenet groups, stock message boards, and Wikipedia, using social media to prevent the public from understanding criminal activity.

I now turn to Gary Weiss. Last year one of the most prominent journalists on Wall Street warned me, “I’ve known Weiss for years. Be careful. He’s a psychopath.” As you will see, he was neither joking nor exaggerating. I think, however, that Gary is better described as a “Scaramouch.”

In a series of brilliant investigations, Judd Bagley, a reporter-investigator-technologist friend of mine (and more recently, I am proud to say, a colleague) studied the IP footprints Gary’s computers have left scattered across the Internet for over a decade, and posted his extraordinary analyses of them on his cleverly-titled site, “Antisocialmedia.net”. Judd’s posts are as disturbing with regard to what they reveal about our society’s discourse, as they are regarding the activities of Gary himself.

It is a complex story that I recount below in as clear and straightforward a manner as I can muster. The best way for me to do that is to break it into 7 short stories. Embedded within each are links to carefully documented research . I respectfully suggest the reader try to understand these as individual stories, before synthesizing them into one complete picture.

#1) Gary’s start in social media

Gary started with simple Usenet group posting in the mid 1990’s, often making productive contributions to newsgroups devoted to matters Judaic. However, as this analysis shows, by the late 1990’s Gary had become a chronic “sock-puppeter,” that is, he maintained a stable of identities and personalities under which he could post in order to steer conversations to his ends (Gary even posted anti-Semitic statements that he could then respond to under other names). Another user caught Gary red-handed and confronted him. Establishing a pattern that would become Gary’s hallmark, when he was caught red-handed Gary Weiss practiced the “deny-deny-deny-then-disappear” school of personal responsibility.

Another pattern of Gary’s emerged as well: that of accusing anyone who disagrees with him about anything as being anti-Semitic. One person whom he has accused of hundreds of times of anti-Semitism complained to the Anti-Defamation League. Showing immense class, the ADL looked into it all and dismissed Gary out-of-hand. Notwithstanding this, Gary continues to level this allegation against that same man (under the assumption, presumably, that he understands anti-Semitism better than the ADL).

#2) Gary’s manipulation of Amazon reviews

For years Gary posted numerous reviews on Amazon praising his own books and trashing the work of other business journalists, as this analysis shows. While Gary’s sock-puppets trash other journalists (e.g., Charles Gasparino), there is one journalist whom he never bashes, but whom he uses his sock-puppets to promote: Jim Cramer. Hilariously, though they were supposed to be the work of various disinterested strangers, Gary’s sock-puppets’ glowing Amazon reviews of his own work began disappearing the moment Judd began exposing Gary’s methods.

#3) Gary goes beserk against another journalist and that journalist’ wife at the United Nations

The following remarkable history is recounted, with thorough documentation, on these two posts.

a) Ian Williams, a British journalist, was president of the United Nations Correspondents Association (UNCA) and UN correspondent for The Nation. Mr. Williams’ wife, a BBC World Service journalist (and native of Uzbekistan), also held a position within the UNCA.

b) Gary’s wife (an Indian national holding herself out as a correspondent for the Indian newspaper The Pioneer of India) applied to work within the United Nations Correspondents Association. To be admitted to the UNCA she had to demonstrate that she was in fact a journalist who covered the UN. Towards that end she submitted copies of her stories from the front page of The Pioneer of India, along with a letter from The Pioneer‘s editor, Chandan Mitra, attesting to her employment there. On that basis she was admitted to the UNCA and began working in the UN offices in Manhattan.

c) Gary’s wife coveted the UNCA position above her that was then held by Ian Williams’ wife. Gary attempted to dislodge Ian Williams’ wife from that position by claiming that Mrs. Williams had lied in order to get her visa to enter the US, so as to create an opening which his own (Gary’s) wife could take. Gary’s allegations proved false.

d) Journalists at the UNCA noticed that the stories which Gary’s wife was regularly submitting from The Pioneer to document her ongoing UN coverage were of identical size and location on the front page of The Pioneer. A bit of investigation proved that they were all forged, and had been photo-shopped on a computer. The Pioneer was contacted, and its Editor Chandan Mitra stated that Mrs. Weiss had “never been engaged by The Pioneer for any purpose,” his signature on her documentation was “an outright forgery,” as was the letterhead upon which it had been generated. Simply put, Gary’s wife was a fake : she never was a reporter for The Pioneer of India. Gary’s wife’s UN credentials were revoked and she was escorted from UN premises under armed guard.

e) Within days of the exposure of Gary’s wife and her being escorted out of the UN, Gary was on Amazon writing reviews under the name “Ted Dichtler” trashing Ian Williams’ work, and within 30 days, had founded “Mediacrity,” a blog putatively devoted to media criticism, but actually largely engaged in (anonymously) hammering away at journalist Ian Williams for being “a fourth rate hack” and continuing the demonstrably false smears against Ian Williams’ wife.

f) It should also be noted that when confronting a man on a Usenet group, Gary posted that man’s wife’s name and home address. Pretty sleazy (although the man in question was a bigot, I think good manners demand that one not get even with a guy by revealing his wife’s name and address). In contradistinction to Gary, however, Judd, ever the gentleman, wrote:

“AntiSocialMedia.net has issues with Gary Weiss, not his wife. As it happens, one of the more startling examples of abuse of social media we’ve discovered anywhere and the central theme of this, the third part of this series on Gary Weiss – cannot be told without making reference to that relationship. However, because her identity is ultimately not material to this situation, we shall only refer to her as ‘Mrs. Weiss’ (though Weiss is not her real last name) and have set this site’s comment filter to immediately reject any comments that contain either her first or last name. Comments containing any other personally identifying information belonging to Mrs. Weiss will be immediately deleted and the commenter barred from further use of this site.”

I will follow the same principle here on DeepCapture.

g) Aside from the general zaniness of the story, there are at least two take-aways from this:

i) Gary had accused Mrs. Williams of lying to get her visa, but those accusations were false. Gary did this while Gary’s own wife was forging her credentials, which credentials were the basis of her own employment at the UN. Thus, Gary and his own wife were engaged in the act of which they were falsely accusing another journalist’s wife. That act takes a sociopath (e.g., the kind who could post anti-Semitic comments while continuously accusing others of anti-Semitism).

ii) What was Mrs. Weiss doing for those years when she was given access to the UN, under the guise of being a correspondent for The Pioneer of India?

#4) Gary manipulates stock message boards

Gary also stays busy posting thousands of times per year on stock message boards, as this remarkable piece by Judd exposes. Gary’s stock message board sock-puppeting and “bashing” sometimes involves switching among 6 sock-puppets while going at it for over 24 hours at a stretch, in a remarkable display of intensity and duration. What an odd “hobby.” Curiously, the stocks with which he concerns himself generally mirror the positions of Jim Cramer, Roddy Boyd, Bethany McLean, Herb Greenberg, Carol Remond, etc.

If only there were a pattern…

#5) Gary Weiss, Pyschopath: The Prequel

At this point you are probably wondering, “Who in the hell is Gary Weiss?” Allow me to give you seven pieces of background, a-g.

a) In the 1990’s, Gary made a name for himself with a BusinessWeek series exposing the Italian Mob (in particular, the Gambino Crime Family) and its infiltration of Wall Street. Bravo. But he relied heavily on two sources. One journalist who interviewed them told me that after debriefing them, and examining materials they supplied, “I can safely say that Gary Weiss built his career in the 1990’s just typing up whatever two sources gave him.”

b) In the mid-1990’s a Forbes reporter based in Russia named “Paul Klebnikov” wrote an expose called, “The Godfather of the Kremlin?” about an alleged Russian Mafia figure named Boris Berezovsky.

c) In 1999 Al Chalem and Laier Lehmann, two New Jersey stockbrokers operating a New Jersey securities firm called “Harbor Securities,” were executed in a New Jersey mansion. The same two sources who had supplied Gary so much other material presented him with evidence that this time it was not the Italian Mafia, but the Russian Mafia, and in particular, Boris Berezovsky. Gary then ran a story that (they maintained) fabricated everything they had told him in an attempt to divert attention from Russian involvement and focus it on (in this case non-existent) Italian Mob involvement. One of Gary’s sources actually sued Gary in an attempt to get public that which he felt Gary was suppressing.

d) In 2000, Forbes’ Paul Klebnikov completed a book, The Godfather of the Kremlin. It reiterated his earlier allegations about Mr. Berezovsky, but without the question mark. Quickly there appeared a series of anonymous Amazon reviews trashing Mr. Klebnikov’s book and discounting its conclusions. On the same days these reviews appeared on Amazon, Gary had a rash of positive reviews of his work. This and the language of the reviews trashing Mr. Klebnikov’s work raise an obvious question: if these startling coincidences of timing were not in fact coincidences, why was Gary adding to his normal routine (that is, going on Amazon with sock-puppets to promote his own work) the additional labor of trying to discredit the work of a Forbes journalist (Paul Klebnikov) who was trying to expose the Russian Mob? And is this related to the claim of his own two sources that his coverage of the execution of the two stockbrokers was designed to move attention away from the Russians and onto the Italian Mob?

e) On July 9, 2004, Paul Klebnikov was assassinated leaving the Moscow offices of Forbes.

f) Days later in July, 2004, Gary left BusinessWeek. If you ever want to shut a BusinessWeek reporter up, ask, “What were the circumstances surrounding the departure of Gary Weiss from BusinessWeek?” In a notoriously gossipy crowd, it is a closely guarded secret.

g) One of the first things Gary seems to have done after departing BusinessWeek was to join Project Klebnikov, “The global media alliance investigating the July 9th, 2004 murder of Paul Klebnikov, the editor-in-chief of the Russian edition of Forbes magazine.” I’ll bet O.J. Simpson finds his wife’s real killer before Gary solves that investigation.

#6) Gary covers-up for the DTCC from within DTCC offices:

Speaking of strange places from which to post: at the heart of our nation’s stock settlement system, and hence, at the heart of the issues of concern to DeepCapture, is a nearly unknown corporation called “The DTCC.” The company provides settlement for the nation’s capital market: $1.5 quadrillion in trades are settled there every year (that is, about 30X the economic output of the entire planet). For most of its history it has largely escaped regulation: state regulators are admonished that they cannot peer inside because the DTCC is federally regulated, and the DTCC has told federal regulators it escapes their regulation due to its strange ownership structure (one former federal regulator, and one former employee of the DTCC, have both told me the feds would not know where to begin if they tried to regulate it).

In short, at the heart of the world’s economy is an enourmous black box that is regulated except on the days it’s not, and through which 30X the economic output of the world flows. It is my contention that much of Wall Street’s illegal activity is funneled through this strange entity.

The huge, nondescript building in downtown Manhattan that houses the DTCC is something of a Fort Knox. Long-gun toting guards watch the entrances, and journalists who have been inside tell me that entering it is tougher than getting into the Federal Reserve or any comparable institution.

Gary recently made a slip that revealed he was inside the offices of the DTCC, using one of their computers to post on Wikipedia about the DTCC. Given that it’s like getting into Fort Knox, I’m pretty sure that’s odd. However, it casts some light on why Gary has been stridently denying that the DTCC is dirty and that none of the issues I have been raising regarding stock market manipulation are legitimate, and why he has (according to a colleague of his in the financial press sympathetic to me) devoted 93% of his blogs to criticizing my efforts to expose the illegal Wall Street activity which, I claim, intersects within the DTCC. Just as interestingly, when given opportunity to comment, the DTCC went into cover-up mode straight out of Bizarro World.

#7) The Finale

The following heavily-documented story qualifies as “mind-blowing.” It is so extraordinary, in fact, many people find it almost impossible to synthesize. Therefore I am going to tell it by first giving a three paragraph synopsis, then by recounting the story in 14 steps, a-n, with documentation for each.

The synopsis:

The intellectual battle over the existence of criminal naked short-selling has been won. As is demonstrated throughout DeepCapture, what was dismissed three years ago as a fringe theory is now no longer in serious dispute. There is an ongoing criminal prosecution and regulators and SRO’s have recently imposed multimillion fines over it. Papers by academic and government economists have confirmed it and reputable journalists have broken news stories concerning its effects. A Bloomberg documentary concerning naked short selling was nominated for an Emmy for long-form investigative journalism. Last summer SEC Chairman Christopher Cox aknowledged that it is real and illegal. Just last week, SEC Chairman Cox again publicly and matter-of-factly discussed the reality of this crime in a hearing at the United States Senate, in answer to sharp questioning from US Senator Bob Bennett. Earlier this week, Dr. Robert Shapiro, a Fellow of the National Bureau of Economic Research, Brookings, Harvard, and a former US Undersecretary of Commerce for Economics, explained the reality and implications of this crime on Canada’s Business News Network (start at minute 17).

Yet throughout the evolution of this awareness, the Wikipedia page on naked shorting has fought a steadfast rearguard action. It will be a matter for a future historian to reconstruct in detail, but at all times the thrust of that page has been to deny and deride the emerging understanding of the issue. Since the time when complete denial became impossible, it has labored mightily to minimize the problem of naked short-selling and all the attendant issues discussed in Deep Capture, citing every critic (Gary Weiss, Floyd Norris, Joe Nocera, and Holman Jenkins of the WSJ) while allowing only barest mention of the positive attention it has received from investigative journalists and economists.

I believe that the chief reason this happened was because Gary Weiss used the name “Mantanmoreland” (and later, “Samiharris”) to hijack the Wikipedia articles on naked short selling, Patrick Byrne, and Overstock.com (as well as the page on Gary Weiss himself). In addition, all the mechanisms within Wikipedia which are supposed to prevent such an act were subverted by Wikipedia’s elites on Gary’s behalf. Judd exposed Gary within Wikipedia, but Wikipedelites suppressed Judd’s evidence. When he began posting it off-Wikipedia on AntisocialMedia.net, Wikipedelites fought to make mention of “Antisocialmedia.net” or “Judd Bagley” a thought-crime within Wikipedia (under the spurious reasoning that someone mentioning either of them had to be a sock-puppet of Judd). Hence, no evidence contrary to official doctrine was permitted at “the free encyclopedia that anyone can edit.” However, evidence slowly circulated within the Wikipedia-in-Exile-community until the conventional Wikipedians began looking into Gary. Wikipedia ‘s founder Jimbo Wales did everything possible to stop their investigation, although it turns out he knew all along that Judd was right. It has turned into a civil war within the Wikipedia community.

I turn take the paragraph immediately preceding this one, and serve its full story, cut into 14 bite-sized pieces, a-n.

The evidence:

a) Judd posted evidence that Gary was manipulating Wikipedia under the name “Mantanmoreland” (and later, “Samiharris”).

b) When confronted, Gary denied it, saying, “Similarly [Judd Bagley] continues to publish the lie that I am this ‘Mantanmoreland’ long after it was, again, denied by both myself and Jimbo Wales of Wikipedia.”

c) Judd sent evidence to a Wikipedia uber-administrator named “SlimVirgin,” who was posing as a neutral arbiter. However, as this demonstrates, when SlimVirgin received Judd’s evidence she immediately forwarded it to Gary (without even opening it herself).

d) A community debate ensued over whether Mantanmoreland was guilty of a Conflict Of Interest violation when he created and dominated the “Gary Weiss” page (i.e., whether or not he was in fact Gary Weiss). A highly regarded Wikipedia figure named “Cla68” (apparently a former military officer living in Asia with encyclopedic knowledge of so many subjects that he is revered within Wikipedia) got close to taking sides against Gary. In a step that was extremely unusual given Wikipedia’s philosophies of transparency and strict retention of all sides of a debate, Wikipedia-founder Jimbo Wales personally intervened to delete the record of the debate. As Jimbo Wales wrote:

“The page contained wildly inappropriate speculation that a notable author was sock-puppeting. As I am sure you are aware, many authors have had their careers badly damaged by being caught sockpuppeting at Amazon, etc., and it is deeply wrong for people to ask me to restore a page with such speculations in Wikipedia after the claims have already been investigated and dismissed. If there are further problems in the future, there will be no problem restoring the article at that time. In the meantime, it is my position that MOST AfD pages for living persons or active companies should be courtesy blanked (at a minimum) as a standard process, and deleted in all cases where there was inappropriate commentary. This is not the current policy, but current policy does allow for deletions of material which is potentially hurtful to people.–Jimbo Wales 01:42, 13 November 2006 (UTC)”

e) Taking things to an Orwellian extreme the “ArbCom” (“Arbitration Committee”) attempted to pass a “BADSITES” policy prohibiting mention of “Judd Bagley” and “antisocialmedia.net,” the site Judd had started to post evidence as he gathered it (all evidence having been prohibited within Wikipedia itself). The debate ran for many weeks, but throughout it, it was prohibited even to name “Judd Bagley” or “antisocialmedia.net.” That is, for many weeks a debate raged in which the accused (Judd Bagley and his site antisocialmedia.net) could not be named, nor was the accused allowed to have a voice, nor were dissenting opinions permitted (on the grounds that anyone who wrote one must be a sock-puppet of the accused). All this happened on Wikipedia, “the free encyclopedia that anyone can edit.”

f) Throughout that process, anyone trying to mention Judd or Antisocialmedia.net, or positions supported by either, was banned as a Wordbomb sock-puppet (note the circularity of this position: WikiTruth demands that Goldstein be banned, and anyone sounding like he might agree with Goldstein will be banned, because clearly, he must be a sock-puppet of Goldstein. Hey, it worked in 1984, right?)

“Any user who creates links to the attack site or references it (other than in the context of this Arbitration) may be banned.”

g) Eventually, this was actually proposed as a matter of official policy for Wikipedia (“the free encyclopedia that anyone can edit.”)

“After warning, or without warning in the case of users familiar with the issue, users who link to the attack site or reference it may be blocked for an appropriate period of time.” (emphasis added)

h) As if that were not enough, in an attempt to prevent Judd Bagely from pointing out to observers the manifest circularities, fabrications, and sheer Orwellianism of the BADSITES debate, Wikipedia blocked Overstock and 1,000 homes around Judd Bagley’s neighborhood, as was exposed in this article that appeared in the well-regarded online British tech journal, The Register.

i) That effort collapsed of its own foul weight. However,  as this other investigative piece in The Register exposed, it did spawn the creation of a secret email list for Wikipedia elites wherein they plotted how to shape the discourse within Wikipedia.

j) Just when you thought this story could not be any weirder, an email has surfaced that was written by Jimbo Wales in September, 2007 at the start of this conflagration, where he admitted already believing that Mantanmoreland was Gary Weiss (this exchange occurred on another of those secret elite-only email lists):

Mantanmoreland@gmail.com: “…I am not going to reveal my real identity to prove that just because Judd Bagley is making a fuss. Rest assured that after all that has happened I am more determined than ever to not reveal my real identity to any person associated with Wikipedia.”

jwales@wikia.com(Jimbo Wales): “I just want to go on record as saying that I believe the reason for this is that Mantanmoreland is in fact Gary Weiss.”

k) Despite this private admission, Jimbo spent the next four months publicly defaming Judd and intimidating anyone who explored Gary Weiss’s activities on Wikipedia. For example, he wrote to the renowned Wikipedian Cla68:

“I fear that you have been manipulated by lying stalkers and trolls, and I am happy to talk to you about it privately, but I am sick of the drama around this issue on this page, and it absolutely has to come to an end…– Jimbo Wales 01:32, 21 October 2007 (UTC)”

l) Despite Jimbo’s opposition (and in the face of his attempts to derail it), over the last two weeks the Wikipedia community has to its credit performed exhaustive analysis of the Mantanmoreland account (as well as “Samiharris”, an additional Gary Weiss sock-puppet) and come down overwhelmingly in favor of Judd’s original thesis.

m) Even in that setting, Wales again attempted to derail the process and deny his earlier recognition of a link between Gary Weiss and Mantanmoreland. Here Jimbo dances on an arcane postmodern distinction between “knowing” and “believing it is a fact that” (in this context it’s a distinction without a difference, Jimbo). Jimbo’s statement is a compendium of fallacies from Logic 101 (e.g., argument from authority, ignoring contravening evidence, ad hominem attacks, non sequiturs, and straw-man rebuttals).

“Because there has been unseemly and false speculation in some quarters that I know this (or related claims) to be true, and that I have admitted as such in private forums, it is important for me to state what I know and what I don’t know.

“Claims about Mantanmoreland being author Gary Weiss have been floating around for a long time. Various claims of ‘proof’ have been made, none of which I have found convincing. At times I have believed one way, at times I have believed another way. I have investigated the claims to the best of my ability and I have been unable to find proof one way or the other.

“An email I sent to Mantanmoreland and others has been widely quoted as evidence that I supposedly ‘know’ this claim to be true. Such interpretations are malarky, and most of the people making the claims appear to me to be acting in bad faith. What I said, at a point in time, was that I believed it to be true that Mantanmoreland == Gary Weiss. This was specifically in the context of a conversation in which I was trying to get more evidence… a proof, one way or the other. Me believing at a point in time in an investigation that something was true, is not the same thing as an assertion that it is true, nor of an “admission” or anything else.

“Mantanmoreland steadfastly denies being Gary Weiss. Ask him yourself if you want to know.

“Related allegations that I am protecting a ‘friend’ are nonsense. Mantanmoreland and I do not get along well at all.

“Related allegations that I have some vested interest in the underlying content dispute are even worse nonsense. I have no opinion about ‘naked short selling’. I have never sold a stock short in my life. I have no financial interests of any kind in this case. If you read anything otherwise, or hints to that effect, on the overstock.com blog or elsewhere, well, I don’t know was else to say but: nonsense. I think such allegations tell more about the people who are making them than anything else.

“Regarding the specific claim at issue here, whether Samiharris and Mantanmoreland are the same user, I can say quite firmly that I do not believe it to be true. I have interacted (argued!) with both users over an extended period of time by private email, and I have not seen any reason to think it true. The offsite ‘evidence’ relating to this comes from a highly questionable source, and furthermore strikes me as completely unpersuasive. For all we know, these are faked screenshots from someone who has engaged in a campaign of harassment and bad behavior (on-wiki and off-wiki) that has been really astounding to witness.

“I have reviewed my email archives to look for similarities between the users. I have examined email headers. I have looked for textual similarities, time patterns, etc. I see nothing to lead me to a conclusion that Sami Harris and Mantanmoreland are the same user.

“For these reasons, I do not believe it to be true that Mantanmoreland == Samiharris. —Jimbo Wales (talk) 02:19, 15 February 2008 (UTC)”

n) All but Weiss’s most dogmatic defenders were silenced, however, when a law student from Chicago published a graph showing the dates and times of all Mantanmoreland’s Wikipedia edits. In it, one can clearly note two things: the rich posting patterns of Mantanmoreland and Samiharris never overlap (statistically, highly improbable); and more importantly, a perfect “phase shift” of precisely the right duration corresponding to a period in which Gary’s own Forbes work revealed him to be in India.

Conclusion

Gary Weiss is a psychopath and a Scaramouch, but this is incidental. Here is the moral of the tale: the great dilemma that journalists face is that they want to be first with a story, but most do not have the nerve to publish a story that is too far ahead of the pack. I believe Gary Weiss went to such effort to hijack these Wikipedia articles because somewhere, someone understands that professional journalists, much as they deride Wikipedia, will never depart more than a few degrees from a Wikipedia consensus. Thus if one can hijack a page so that it simply repeats the accusations of a few co-opted journalists, then rare is the new journalist who will come along and escape that equilibrium. Thus, by hijacking the Wikipedia consensus one can corral much of the industry of modern journalism (this is all the more reason why those few journalists who departed from that consensus over the last year, however meekly or bravely, deserve admiration).

The deeper question, then, is this: how many social institutions have failed when a “journalist” is manipulating the discourse within both the news and social media, and all the mechanisms that should curtail him are short-circuited? Or, more to the point of DeepCapture, trying to drown out a scandal while simultaneously manipulating social media from within the corporation that is at the heart of that scandal?

Postscript: There is a side matter that, in all fairness to Gary, I should mention to condition your reading of what I wrote about him. It is this: I have a lady friend who for 13 years has managed and been part-owner of a superb Italian restaurant in Manhattan. Her restaurant generally receives a Zagat’s rating of 23 or 24 (with a 24-rating being the threshold for the serous foodies). In fact, the restaurant is regularly one of the lowest-priced Zagat-24’s in Manhattan. Its reviews generally range from good to stellar. Weeks after Gary joined Forbes, a harsh, puerile review of her 10-employee restaurant appeared in Forbes magazine. I’m pretty sure that’s odd, too. Because the writing was florid and made no sense it is natural to suspect Gary of having written it (note to Gary: how does a pasta dish like orecchiette taste like it is from Bombay? And “branzino” is Mediterranean sea-bass, which explains why it tastes like fish.) Of course, it could have been just a coincidence that, weeks after Gary began his relationship with Forbes, the magazine suddenly felt the need to review a small Italian restaurant managed by the woman then displaying the unfortunate judgment of dating me (full disclosure: since then she has decided to display better judgment). I don’t really know if Gary was behind it, pursuing a personal vendetta by misusing his position as a journalist to hurt my magnificent lady friend.

But it sure is his style.

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If President-elect Obama is serious about pulling the economy out of its death spiral, he must urgently appoint a task force to investigate our nation’s clearing and settlement system. Specifically, the American people need to know how it has come to be that a black box outfit on Wall Street is empowered to handle (or, rather, completely fumble) securities transactions worth more than $1.5 quadrillion – that’s 30 times the gross product of the entire planet – without any real government oversight.

This black box organization–the Depository Trust and Clearing Corporation (DTCC)–claims to “centralize, standardize and streamline processes that are critical to the safety and soundness of the capital markets.” In other words, if somebody sells a security, the DTCC is supposed to make sure that a real security is cleared, settled, and delivered to its purchaser.

But it does not do that. We have long known that the DTCC enables brokers to routinely fail to deliver the stock that they have sold on behalf of their hedge fund clients. All the while, the DTCC has waged a fierce and grossly misleading public relations campaign aimed at convincing the public that illegal naked short selling (which results in extended failures to deliver) is not a problem.

This is appalling given that even the exchanges’ limited data show that failures to deliver peaked at more than 2 billion shares last summer, just before the SEC issued its temporary “emergency order” protecting 19 financial companies from naked short selling. That is, on most days in June, there were more than 2 billion phantom shares circulating in our markets.

In fact, the problem is much larger than that. Many fails occur “ex-clearing” and in other parts of the system that are not monitored by the exchanges. But we do not know precisely how large the problem is because the DTCC has refused to release complete data.

What is certain, though, is that 70% of those failures to deliver were concentrated on no more than 100 companies – driving down the companies’ share prices, and making it difficult for them to raise the capital they needed to survive. The affected companies included Bear Stearns, Lehman Brothers, Washington Mutual, Merrill Lynch and several dozen other now-defunct financial firms.

And it is not just stock that isn’t getting delivered. Euromoney, the most respected financial publication in Europe, has revealed that there are massive failures to deliver even of U.S. Treasuries. “Failures in U.S. Treasuries were 8.6% of all treasuries outstanding in the first five months of this year, compared with 1.2% in the first five months of 2007,” Euromoney reported last week. “That has ballooned further over the past three months, hitting more than $2 trillion for almost the entire month of October – more than 20% of the daily treasuries trading volume.”

More than $2 trillion worth of phantom Treasuries – that cannot be good for the economy.

Bloomberg Newswires, meanwhile, recently reported that investors are complaining that Goldman Sachs is routinely failing to deliver corporate loans that it sells. According to the complainants, Goldman’s traders are selling debt that they do not own in order to further the destruction, and profit from the short selling, of public companies that are its own clients.

This is not surprising. Goldman is the proud owner of what used to be called Spear, Leeds & Kellogg – a brokerage that was long known as the most egregious perpetrator of naked short selling. Goldman has, of course, joined the DTCC and few miscreant hedge funds in trying to cover up the problem.

A similar outrage is occurring in the market for credit default swaps (bets that borrowers will default on their debt). Hedge funds and brokers are selling (quite often to themselves) virtually unlimited numbers of these swaps, even when they do not correspond to any real underlying debt. These are phantom swaps – and the increased volume creates the perception that target companies are on the verge of collapse, which of course, benefits the hedge funds, which are simultaneously short selling the phantom stock..

The DTCC has the authority to crack down on delivery failures. It has the power to tell us who, exactly, is committing the crimes.

Unfortunately, the government has no power over the DTCC. Officials from the Securities and Exchange Commission, which has limited oversight, admit that they have no clue how the DTCC operates and that they visit the organization only once a year.

So, of course, the DTCC protects the criminals. It protects the criminals because it is owned by the criminals. That is, the DTCC is a quasi-private organization owned by Wall Street brokers – the very same people who serve the hedge funds who seek to profit from the destruction of our economy.

This seems to me like a pretty big scandal.

And yet, aside from the excellent but sporadic reports from Bloomberg and Euromoney, the media continue to act as if there is nothing to see. The financial crisis, we read over and over in The Wall Street Journal, was caused by those bad subprime mortgages—end of story.

This is what we read because too many journalists have only two kinds of sources: hedge fund managers and people who do nothing more than repeat what they hear on CNBC. And CNBC has two kinds of sources – those same hedge fund managers and people who do nothing more than repeat what they read in The Wall Street Journal.

And thus is the conventional wisdom woven from a vicious cycle.

We can only “hope” that the new president’s economic advisers are honest people who know that truth resides in the details – not in the noise, not in a black box, and not in the tacky mansions of Greenwich, Connecticut.

* * * * * * * *

P.S. One encouraging sign is that former Deputy Secretary of Commerce Robert Shapiro has been named to Obama’s transition team. Shapiro is one of the world’s foremost experts on naked short selling and failures to deliver. He has plowed through the data — he knows all the details – and he understands the seriousness of the problem. Maybe he can make the president understand, too.

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The Wall Street Journal stated in a lead editorial last week that the SEC was “reasonable” to “clamp down” on naked short selling. Well, that was progress of sorts, though one wonders how it could have taken all these years for the nation’s most important newspaper to suggest that it might be “reasonable” to put an end to criminal activity that has eviscerated hundreds of companies and destroyed countless lives.

And now that this criminal activity has been implicated in the Humpty Dumptying of our financial system, one grows wistful for the golden age of journalism when editorialists (people working for famous newspapers, not just cyber weirdos) would express a little outrage, demand that heads roll – muster something better than “reasonable” to describe the limpid “clamp down” of an SEC that bows in oily servitude to the very short-sellers who manhandled our markets.

Alas, The Wall Street Journal is not angry about the scandal of naked short selling. To the contrary, it devotes most of its editorial to tut-tutting the SEC for taking the mild step of requiring hedge funds to disclose their short positions. This, the Journal laments, means the government wants to “slap a scarlet letter on short sellers.” And (shed a tear) hedge funds will now have to “worry that their strategies will be put on display for the world to see.”

Might the world like to see which hedge funds are employing the strategy of illegal naked short selling – offloading huge chunks of stock that they do not possess – phantom stock – in order to drive down prices? No, nothing to see there, says the Journal. Having thoroughly investigated the matter, the editorialist reports that there is “no evidence of widespread naked shorting of financial stocks in this panic.” Indeed, the Journal assures us that there is no evidence that short sellers have engaged in any market manipulation whatsoever.

That is a mighty bold claim. As the Wall Street Journal itself reported, the SEC has ordered two dozen hedge funds to turn over trading records as part of its investigation into possible short-seller manipulation of six big financial institutions — American International Group, Goldman Sachs, Lehman Brothers, Morgan Stanley, Washington Mutual, and Merrill Lynch.

The SEC has never in history prosecuted a major case against a short seller, and there is no reason to believe that it is actually going to nail someone now. But it is not difficult to see why the SEC feels that is has no choice but to investigate.

It must investigate, or at least appear to investigate, because the data scream, “Investigate!”

Take the case of Washington Mutual, which met its demise on the same day that the Journal published its editorial. While the SEC has not yet released data covering the last couple weeks of turmoil, the data through June show that at one point that month “failures to deliver” of Washington Mutual’s stock reached an astounding 9 million shares. From June 5 to June 19 there were, on any given day, at least 1 million WaMu shares that had “failed to deliver.”

In other words, hedge funds and brokers sold as many as 9 million shares that they did not possess (which is why they “failed to deliver” them), and they kept the market saturated with at least 1 million phantom shares for more than two weeks. WaMu’s stock price dropped by more than 30% during this period. Similar attacks, with similar effects, occurred one after another in the months leading up to June.

That is very good evidence of illegal market manipulation.

Aside from Washington Mutual, Bank of America, Fannie Mae, MBIA, Ambac, and close to 50 smaller financial firms – not to mention a couple hundred non-financial companies – have appeared on the SEC-mandated “threshold” list of companies whose stock has “failed to deliver” in excessive quantities.

That, too, is very good evidence of illegal market manipulation.

A number of the big banks never appeared on the SEC’s “threshold” list. Perhaps that explains the Journal’s claim that there is “no evidence” that naked short selling contributed to our financial crisis. If so, the Journal does not understand the methods that naked short sellers use to manipulate the markets. The Journal also does not understand how powerful financial elites manipulate the government (and the media).

Peter Chepucavage, the former SEC official who authored Regulation SHO (the rules that governed short sales from 2005 until the SEC temporarily banned short-selling of financial stock last week) has told us that the rules were watered down under fierce pressure from the hedge fund lobby.

One result is that Regulation SHO did not force short sellers to borrow real shares before they sold them. They were given three days to produce stock before it was declared a “failure to deliver.” If they missed the three-day deadline, they were given another ten days, after which they were supposed to buy (not borrow) real shares and deliver them, or face penalties.

In practice, many hedge funds and brokers ignored the deadlines without repercussions. But even traders who met the deadlines were able to churn the markets. Since they were not required to possess real shares before they hit the sell button, they could offload a large block of phantom stock and let it dilute supply for three to 13 days. When the deadline arrived, they might borrow real shares and deliver them, and then sell another block of phantom stock, which would hammer prices for another three to thirteen days.

Or, rather than borrow real shares, the hedge fund might buy stock (the price having been knocked down during 13 days of diluted supply) from a friendly broker. Often, the brokers did not have any stock to sell the hedge fund, but they pushed the sale button anyway. The hedge funds then used the broker’s phantom stock to settle its initial sale of phantom stock, and when the broker’s deadline came, he bought an equal quantity of phantom stock from another broker, and so on.

A lot of journalists have portrayed this naked short selling as “legal.” In fact, it is grossly illegal assuming the goal is to manipulate markets. But the SEC until recently shied away from making that assumption. So long as the hedge funds met the delivery deadlines, they could distort and destroy at will.

Another result of the short-seller lobby’s intervention is that a company does not appear on the SEC’s “threshold” list unless there are failures to deliver of more than 10,000 of the company’s shares (and at least 0.5% of its total shares outstanding) for five consecutive days. So long as there are no failures on day six, there are no flashing red lights at the SEC. That is, threshold (excessive) levels of phantom shares can float around the system for a total of eight days (three days before they are registered as “failures to deliver,” plus five more) without a company being designated a victim of naked short selling.

An eight-day blast (or even just a one day blast) of, say, a couple-hundred thousand phantom shares can knock down a stock’s price very nicely. Blasts of a million-plus shares, which are common, can do even more damage.

If a company has weaknesses that can be blown out of proportion with help from the media, and if hedge funds blast the company with phantom stock, then pause, then blast again, then pause, then blast again — over and over — for a couple of months, then the company’s share price can soon be in the single digits. – without ever having appeared on the SEC’s threshold list.

Unsurprisingly, the data through June shows this blast-pause-blast pattern in the stocks of nearly ever major financial institution that has been wiped off the map, and quite a few that were in death spirals before the SEC temporarily banned short-selling. Very often, huge failures to deliver have occurred in stretches of precisely five days – just long enough to keep a stock off the threshold list.

The attack on Bear Stearns, for example, began on January 9, when hedge funds naked shorted more than 1.1 million shares. The shares “failed to deliver” at the end of Friday, January 11 (the three-day deadline). For the next four days, beginning Monday, January 14, there were massive failures to deliver, peaking at 1 million shares on January 17. That is, the attack lasted a total of eight days, with failures to deliver lasting precisely five days. On day six, there were few failures to deliver, so Bear did not appear on the threshold list.

Over the next few weeks, there were several more blasts – with failures to deliver ranging from 200,000 to 500,000 shares. Those were threshold levels, but the failures lasted less than five consecutive days, so no flashing red light at the SEC.

On February 28, 800,000 shares of Bear Stearns failed to deliver. For the next five business days, anywhere from 100,000 to 350,000 shares failed to deliver. On day six, there was a pause — few failures to deliver. So no threshold list – no flashing red light at the SEC.

A week later, just before CNBC’s David Faber reported the false information (given to him by a hedge fund “friend” whom he had “known for twenty years”) that Goldman Sachs had cut off Bear’s credit, somebody naked shorted more than a million shares of Bear’s stock.. Over the course of the next couple of weeks, there was a sustained effort to drive the stock to zero, with massive failures to deliver every day — peaking at 13 million shares.

This attack lasted long enough to put Bear Stearns on the threshold list, but by then, it was too late. The bank’s mangled remains had been swallowed by JP Morgan. Ultimately, at least 11 million shares of Bear Stearns were sold and never delivered.

Meanwhile, the naked short sellers began their attack on Lehman Brothers. On March 18, Lehman’s stock had begun to increase sharply, so somebody unleashed more than 1.5 million phantom shares. Those failed to deliver on March 20. For the next three days, there were failures to deliver of between 400.000 and 800.000 shares — far exceeding the daily “threshold.” That helped the share price to fall sharply, but on day five, there were no failures, so Lehman didn’t appear on the threshold list of companies victimized by naked short selling.

On April 1, another round of naked short selling commenced, coinciding with a wave of false rumors about Lehman’s liquidity. That continued until April 3, when SEC Chairman Christopher Cox, for the first time, told a Senate committee hearing that naked short selling was a big problem. Using the words “phantom stock,” he said many companies had been affected and vowed to crack down.

For a few weeks after that, there was not much new naked short selling.

Then, on May 21, short-seller David Einhorn gave his famous speech accusing Lehman’s executives of cooking their books. Though Lehman, like most banks, was guilty of participating in the dodgy business of securitized debt, it was not cooking its books. It had, however, failed to mark some of its assets down to levels prescribed by Einhorn, who waved the CMBX index as the proper barometer of commercial mortgages.

The CMBX comes from a company called Markit Group, which is owned by four hedge funds, the names of which the Markit Group will not disclose. I don’t know if the managers of those hedge funds are friends of David Einhorn, but the Wall Street Journal’s Lingling Wei published a story in February noting that the CMBX “doesn’t make sense.” It grossly undervalues commercial property, implying default rates, for example, that are four-times higher than they are in reality.

Nonetheless, the media, including the Wall Street Journal, trumpeted Einhorn’s analysis, which was distorted in many other ways – but that is a tale for a future blog.

For now, it is enough to know that coinciding with Einhorn’s speech, somebody naked shorted more than 200,000 shares (the settlement date for that sale was May 27, three business days after the speech, owing to a holiday weekend). Thus began a five day stretch of failures to deliver (ranging from 120,000 to 450,000 shares). On day six, as usual, there were few failures to deliver, so Lehman did not appear on the threshold list.

After a pause of a few days, somebody circulated the falsehood that Lehman had gone to the Fed for a handout. Coinciding with that rumor, hedge funds naked shorted close to 1.5 million shares. Those shares failed to deliver three days later, on June 9. The next day, there were 650,000 failures. The day after that, 263,000 failures. On day four, there were 510,000 failures. On day five, there were 623,000 failures. Time for Lehman to appear on the threshold list. But, on day six, of course, the failures to deliver stopped. No list – no flashing red light at the SEC.

Throughout this time, Einhorn continued to appear on CNBC and in the major newspapers, doing his best to make Lehman’s problems (which were real, but probably, at this stage, manageable) appear to be both catastrophic and criminal. From May 21, the day of Einhorn’s speech, to June 15, the stock lost almost half its value.

For reasons that I cannot fathom, Lehman then opted for a strategy of appeasement. Rather than challenge Einhorn’s assumptions, Lehman aimed to silence him and his media yahoos by doing what they asked. It “reduced its exposure” to mortgages, primarily by marking them down to levels dictated by Einhorn’s bogus index – the CMBX. This is the main reason why it booked a 2.8 billion loss in the second quarter.

When Lehman announced its quarterly results, on June 16, there was another blast of naked short selling, with failures to deliver at threshold levels from June 19 to June 24. Exactly five days. Then the failures stopped. No threshold list. No flashing red light.

I look forward to the day (in a few months) when the SEC will release data covering July to September. But I can tell you right now what happened next.

On June 30, somebody floated the false rumor that Barclays was going to buy Lehman at 15 dollars a share (it was then trading at 20). Simultaneously, hedge funds no doubt naked shorted large blocks of shares. It’s a safe bet that the data will show failures to deliver lasting precisely five days.

On July 10, somebody (SAC Capital?) circulated the false rumor that SAC Capital was pulling its money out of Lehman. Hours later, there was another false rumor — that PIMCO was pulling out its money. Quite certainly, these rumors were accompanied by naked short selling, with failures to deliver beginning three days later, and probably continuing at threshold levels for precisely five days. Lehman’s stock lost almost 50% of its value in the four weeks leading to July 15..

At this point, the SEC finally came to realize what was happening to Lehman. It realized that similar madness had destroyed Bear Stearns. It realized that AIG, Citigroup, Fannie Mae, Freddie Mac, Bank of America and fifty other financial companies were getting clobbered in exactly the same fashion.

Clearly, naked short selling posed a real threat to the stability of the financial system. So the SEC issued an emergency order forcing hedge funds to borrow real stock before they sold it. No more saying “Yeah, my cousin Louie has the stock in a drawer somewhere.” No more naked short selling.

This order protected only 19 big financial institutions – which is as far as the SEC thought it could go and still retain friendly relations with its short-selling paramours – but it was something. During the three weeks that the emergency order was enforced, Lehman’s stock price increased by around 50 percent. The other companies that had been under attack enjoyed similar rebounds.

The short-sellers, of course, fumed. Some of those fumes wafted to The Wall Street Journal and other prestigious publications, which lambasted the SEC for issuing the emergency order. They published all manner of mumbo-jumbo about the emergency order wrecking “market efficiency” – though the only evidence of this was an utterly dubious report circulated by the short seller lobby (see here for the details), and it was hard to comprehend what could possibly have been “efficient” about a market getting smothered with false information and fake supply.

Of course, the SEC, captured by the short-sellers, and ever mindful of the media, decided to let its emergency order expire, and announced no new initiatives to stop naked short selling..

The day after the emergency order expired, Lehman’s stock nosedived. So did a lot of other stocks that had enjoyed a temporary reprieve.

Mark my words, the data for August and September will show that soon after the order was lifted, rampant naked short selling began anew.

It will show a sustained attack on Fannie Mae and Freddie Mac, with failures to deliver exceeding one million shares, until the day the two companies were nationalized. It will show Lehman getting hammered (blast-pause-blast) until its stock was so low that there was no way it could raise capital. And it will show that in Lehman’s final days, hedge funds sold unprecedented amounts of phantom stock, knowing that the stock would never, ever have to be delivered.

Two days after Lehman was vaporized, AIG watched its stock fall to as low as one dollar. The data through June shows that AIG was repeatedly blasted with phantom stock, often in stretches of eight days (three + five), with peak failures to deliver reaching 2 million shares. It’s a safe bet that the data will show that these attacks continued, and grew in magnitude, until a price of one buck per share resulted in paralysis, and AIG had to be nationalized. But the company never appeared on the SEC’s threshold list.

After AIG, the rumor was that Citigroup would go down next. The data through June shows that Citigroup was bombarded – blast, pause, blast – with massive amounts of phantom stock. Failures to deliver peaked at 8 million shares. No doubt, the blasts continued and grew in magnitude in the days leading up to September 16, when Citigroup’s stock went into a death spiral.

On September 17, the SEC rushed out new rules governing naked short selling. The new rules seemed a lot like the old rules. Hedge funds would not have to actually possess stock before selling it. Instead, they would merely have to “locate” the stock. The SEC would have no way of knowing whether hedge funds had “located” stock, but if they lied and told their broker, “Yeah, I located the stock, I got it somewhere, push the sell button,” then that would be “fraud.” Presumably, the brokers, who depend on the hedge funds for most of their income, and are complicit in their naked short selling, would line up to inform the SEC that their clients were telling them lies.

Meanwhile, the hedge funds would still have three days to deliver stock, with no strong penalties for failing to do so, and no mechanism for determining whether a hedge fund had delivered real stock, as opposed to new phantom stock that it had received from a friendly broker. As for the “threshold” of five consecutive days before a company could get on the list that sets off the flashing red lights that the SEC ignores – that would remain the same.

When these rules were announced, the short-seller lobby cheered loudly. The media transcribed the lobby’s cheerful press releases, and then the naked short sellers eliminated Merrill Lynch. After that, they turned on Goldman Sachs and Morgan Stanley, at which point both stocks went into death spirals and the companies’ CEOs treated us to the spectacle of calling the SEC to complain that Morgan and Goldman (ie., the companies that housed the brokerages that invented and profited the most from naked short selling) were now getting mauled by their own monstrous creations.

A week later, the Wall Street Journal stated in an editorial that there was “no evidence” of naked short selling or market manipulation during this financial crisis.

* * * * * * * *

P.S. I am a former employee of The Wall Street Journal editorial page. I think it is the finest editorial page in the world. I enjoyed my time at the Journal. They let me live in Europe. I got to write mean things about socialists.

But with genuine respect, I say to my former colleagues –you are like the boy in the bubble. You live and breath the “free markets” paradigm. This is healthy, but it is limiting. It is not the real world..

Please, get out of that bubble. Get dirty with the data. Behold the slop in our clearing and settlement system. Consider how this slop is affecting our market, and tell me what is free or efficient about it.

Please, do it quickly.

If you do not, this nation is screwed.

Mark Mitchell

Mitch0033@gmail.com

The closing minutes of “There Will Be Blood” handily dramatizes naked short selling and, more generally, Wall Street’s relationship to the United States (WARNING: movie spoiler).

Oilman Daniel Plainview (Daniel Day-Lewis) discovers oil near Bakersfield, California, and buys up property in the area for drilling. He covets in particular the vast oil reserves under the land of William Bandy. Bandy refuses to sell on the advice of his preacher, Paul Sunday. Plainview goes on to build a fortune pumping oil from the tracts he has purchased.

Years later, a down-on-his-luck Preacher Sunday approaches Daniel Plainview and offers to help him purchase “the Bandy tract” to Plainview (in return for a kick-back, naturally). Here is Plainview’s response:

The movie ends on this cheery note:

These clips provide fine metaphor for the issue which Deep Capture seeks to expose: naked short selling. Wall Street has figured out how to drink America’s milkshake. The “straw” used is the act of taking investors’ savings in return for stock that Wall Street never actually had, never really borrowed, and consequently, never delivered. But they took the cash. This “straw” is composed of loopholes and rationalizations: loopholes that let them drain the capital of Americans, and rationalizations that let them do it with a straight face on the grounds that _______ (insert meaningless rationalization here: “They’re rich and thus good for it”; “All liquidity is good, even liquidity based on fraud”; “People who complain about paying for things they never receive are whining”; “The folks doing this are smarter than everyone else and have $45 million apartments” etc.)

The US is the supine Preacher Sunday, bleeding to death with a crushed skull. And Wall Street is, most definitely, finished with us.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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