gary-weiss.com

Nasdaq, Please Don't Delist Overstock.com!

2009-11-20T17:05:00.020-05:00

At a time when the world seems to be falling apart, it's nice to know that there is a ray of sunshine: the always fascinating story of the corporate crime petri dish, Overstock.com.

I honestly don't know what I'd do without Overstock. What else could I write about that would be so endlessly entertaining? The arrogance, the contempt for law, the lying, the hypocrisy, the bullying, the hubris, the self-righteousness, and above all--I think this is the clincher--the total absence of a sense of irony.

If Overstock were to go bankrupt due to lack of funding or be delisted by Nasdaq (for something silly like having unreliable financial reports and filing an unreviewed 10-Q), life would be less bright.

By the way, look at when the delisting notice was released by Overstock--two minutes after market close today, a day after the letter was received. Friday after market close is the traditional time for dumping bad news by crappy, fraudulent, book-cooking penny stock companies. I doubt they even know that. They just figured, "Gee, this is a good time to dump bad news." There is a freshness in the way these people act, a kind of "We can get away with that, can't we?" attitude that I just adore.

Overstock.com's wack-a-doo CEO Patrick Byrne had a conference call on Wednesday to discuss his latest little, minor, unimportant, unmaterial boo-boos like firing his auditor and filing a bogus financial report... Silly little stuff.

The source of all his troubles, apart from his own incompetence--white collar crime-fighter Sam Antar--was, of course, excluded from this "transparent" conference call, which Byrne arrogantly boasted about on his "Deep Capture" smear site (which is devoted to investigating "bad people" who all happen to be critical of this bozo).

But even without Sam asking pertinent questions, Byrne and his minions provided quite a show. Below is a message board post that I think sums up the conference call fairly. I've put the commentary in italics:

Has everybody had a chance by now to look over the transcript of the Chuckles the Clown conference call held on 11/18? All of Overstock's conference calls are truly in a class by themselves.

[CFO Steven] Chestnut: "...people will sense the complexity of the question too, because this is not a pretty simple right/wrong; there's a lot of facts and information that, hopefully, we'll disclose through this conference call that will be helpful."

[President Jonathan] Johnson: "....yes, I agree -- this is arcane -- how many accounting angels can dance on the headof a pin?"

Complexity; arcane? We're talking about whether to recognize revenue in the quarter it was earned. There's nothing "complex" or "arcane" about Overstock's books except the constant attempt to cook them.

"Dr." Byrne: "Can I put this on my balance sheet, because I know I'm going to -- I found $100 somebody owes me, can I put $100 on my balance sheet and run that through my income statement?" Yeah. It's called accounts receivable! If you're not sure you'll collect all of it, you establish a reserve. Arcane, huh?

Chestnut: "...remember, Patrick, fourth quarter 2008 was a retail Armageddon. And so all of this was put in the context of a pretty uncertain fourth quarter and where is the environment going to go?" So: The environment being less than rosy (or possibly, resembling the final batle between good and evil), one doesn't post earnings properly, just to be "conservative"?

Byrne: "Now, the SEC, at least in their questions, seemed to be saying, well, isn't it true that anything -- and I'm not dissing the SEC. I am dissing [is people on the scene] {can't account for the previous meaningless "is people on the scene" "correction" in the original transcript}-- I mean, I think Grant Thornton -- we're not going to be exchanging Christmas cards."

Why didn't you finish that thought about the S. E. C.? We don't care who's on your Christmas card list. (And, by the way, you certainly are "dissing"--if you can't find a better term--the S. E. C.)

Byrne: "The SEC is just doing its job ...God bless them, that's their right' Nice of you to acknowledge that!

Johnson: "Let's just take a look at what the fog of war was like then." The fog of war? Ah, then, all is forgiven. People do lose their heads during a bayonet charge, and of course the whole world always looks like a bayonet charge to "Dr. Byrne".

Byrne: "...what did the balance sheet in God's eye look like as of December 31...?" Ah, I am checkmated again. Invoking the deity, whose knowledge you presume to have duplicated, will always win an argument.

"We had a choice -- you know, this isn't some mistake that slipped under everyone's radar. There was a choice...." That doesn't square very well with "Antar's ramblings are gibberish. Show them to any accountant and they will confirm. He has no clue....It's just a guy on a street corner, spouting gibberish, hoping someone will toss him a quarter," which statement [from a previous conference call] I presume now apples to the S. E. C.

It just goes on and on like that. . . .

David Brooks Misses the Point

2009-11-20T15:11:00.002-05:00

David Brooks' New York Times op-ed column today on Tim Geithner (mentioning in the lead my Portfolio cover story) misses the point, I think.

The problem with Geithner's approach is not whether or not the banks are recovering because of the TARP program, but the degree to which the profits of the biggest banks have not been matched by a commensurate ability to lend.

Money is still tight. A couple of weeks ago, the Federal Reserve reported that banks "kept tightening lending standards for companies and consumers last quarter, reinforcing the central bank’s decision to leave its benchmark interest rates at record lows for a long time."

Simply put, the absence of a continued bank-caused financial crisis is not a reason to cheer. The public is justifiably upset that all those billions of dollars have made bankers richer without showing any benefits in terms of loosened lending policies. That's not an unreasonable expectation, and enough time has passed that people have a right to ask: what's in it for me? Why have we not seen any benefits to the population as a whole (apart from the banking system not falling apart) from the TARP program?

I don't believe that history will be kind to Geithner, or President Obama, if all he can show for his efforts, and our billions, is the absence of a crisis.

© 2009 Gary Weiss. All rights reserved.

The New BusinessWeek Will Look Like.....?

2009-11-20T11:40:00.008-05:00

The layoffs taking place at BusinessWeek, as it gears up to melt into Bloomberg, are much larger than had been anticipated--a third of the staff--and raise some interesting questions about what the magazine is going to look like, and how it will be staffed.

It's not even clear to what extent the new BW will have its own writing staff. Higher-level editors are being retained for the magazine, but so far I haven't heard of any BW writers being retained to work exclusively for the magazine. This is crucial to the magazine's identity, if one cares about such things.

I've heard from multiple sources that the new BW will use the Bloomberg wire's staff to cover Wall Street and finance, and that the people in my old department who have been retained will be going to the wire, not the magazine. Stock market columnist Gene Marcial is being let go, along with the rest of the magazine's columnists. He had a substantial following, surviving previous layoffs that had already gutted the staff, but he's history.

The impression I get is that BW people are a bit in a state of shock over the extent to which the staff is being gutted. Can't say I blame them. But it was obvious from the moment BW was put up for sale that this outcome was always in the cards. The fault, dear Brutus, is not in their stars, but in Terry McGraw.

UPDATE: Bloomberg denies the 130-fired figure. The number dismissed is important because the federal WARN act kicks in if at least 33% of a work force is laid off. 130/400 would be under that number.

Some of the media accounts have talked about BW people "staying with the magazine." I know that at least one of those reports is incorrect, and I have my doubts about the extent to which the new BW will have a dedicated writing staff. It's possible. But Bloomberg has a large staff of experienced writers, some of whom had worked for the Wall Street Journal, Portfolio and, of course, BW itself. It would be logical for them to contribute to the new Bloomberg-BW.

© 2009 Gary Weiss. All rights reserved.

Should a Banned Broker Become a Journalist?

2009-11-19T17:52:00.009-05:00

I was being bombarded with word of the ongoing BusinessWeek slaughter, when I heard of the squabble between Felix Salmon and Henry Blodget.

The question is whether it's kosher that Blodget (and other banned securities industry people) should take away jobs from out of work journalists--like the ones being tossed out onto Avenue of the Americas today.

Blodget isn't actually the main focus of Salmon's piece, but he got riled and responded, so thus it became a squabble.

I guess my feeling is that it's OK, as long as it's disclosed. Blodget's troubles with regulators are well known. If people don't know this guy's past, they're too out-to-lunch to read Business Insider.

I'm a great believer in redemption. Personally I feel that Eliot Spitzer, even though not exactly redeemed, belongs at least in journalism, and perhaps back in a position of responsiblity.

Certainly one of the best sources of information on my Marley, Overstock.com, is the admitted crook Sam Antar. Of course, Sam is functioning as an unpaid blogger, not a journalist taking the bread out of the mouths of other journalists.

Let's face it, journalists are losing their jobs not because there are too many banned brokers in our ranks, but because our industry has lost its way.

Right now, as I write these immortal words, people are being canned right and left from BW. Apparently the entire staff is being dispersed and cut to ribbons. Why? Because the magazine was driven into the ground by mismanagement, and McGraw-Hill, having used BW as a cash cow for decades, felt that it was better to cut the magazine loose rather than have faith in its future.

Journalism is a tough, cold, shrinking business, and a few people with shady pasts in our midst is the least of our worries.

© 2009 Gary Weiss. All rights reserved.

Layoffs Commence at BusinessWeek

2009-11-19T14:11:00.006-05:00

Layoffs have begun as Bloomberg begins to absorb BusinessWeek, and the list of people leaving is growing ever-longer with, it seems, every passing minute.

Chris Roush is keeping a running total. Among the people leaving, at last look, are Steve Baker, Steve Wildstrom, Jon Fine, and Lauren Young. Baker is the author of a well-received book, The Numerati, Wildstrom wrote a technology column, Fine covered media and Young was a personal business editor. I'm surprised by these departures, and by others I've heard about in confidence.

Here's what's interesting: so far I haven't heard of anyone under the rank of assistant managing editor who is being retained by the magazine. All the retained people who are writers or line editors are going to the wire.

What I'll be curious to see is to what extent the new BW has its own substantial staff of writers, or whether it will draw primarily on contributions from upon the staff of the Bloomberg wire.

The former had been expected. The latter would be something of a surprise.

One saving grace, albeit a tiny one: I hear that people are being given the bad news with dignity and respect. That's better than what happened a few years ago, when one longtime BW editor I know, who retired and stayed on part-time, was let go via email. Classy.

© 2009 Gary Weiss. All rights reserved.

A New Insight on the Wall Street Mob Hit

2009-11-19T11:01:00.006-05:00

Jerry Capeci has an interesting column today (subscription only) on the unsolved 1999 slaying of two Mob-linked stock promoters, Alan Chalem and Maier Lehmann.

In a BusinessWeek article at the time, I pointed out that Chalem had business dealings with DeCavalcante crime family capo Phil Abramo, now imprisoned, who controlled Toluca Pacific Securities and another penny stock house called A.S. Goldmen.

Capeci reports:

The so-called real Sopranos’ main man on Wall Street, capo Philip Abramo, (left) had controlled Toluca Pacific, and soldier Anthony Capo was quickly fingered as one of the gunmen.

Capo, however, squelched that theory after he was indicted on racketeering and murder charges, and began cooperating that December with federal prosecutors in Manhattan. Capo admitted several mob killings, but insisted he had nothing to do with the Colts Neck murders.

At that point, he said, investigators began probing the Russian mob:

For several years, federal prosecutors in Newark, working with state police, the FBI and SEC, used a federal grand jury investigation in an effort to get to the bottom of the double homicide. Despite several leads that pointed in that direction, including a cooperating witness who told the feds he had seen several gun-toting Russian gangsters in Chalem’s house, that also turned out to be a dead end.

Now, here's where it gets interesting. Capeci says that the slayings are now believed to be linked to Alphonse "Allie" Persico of the Columbo crime family, who's now serving life in prison. Persico had business dealings with Chalem, and there is still a link with Toluca Pacific:

[Persico family member] Sean Persico. . . and Chalem were also “silent partners” in a classic “pump and dump stock scheme” that the men allegedly operated out of Toluca Pacific Securities, one of two shady brokerages that Chalem worked for during the late 1990s.

Neither man was ever charged, but authorities and other sources say that Sean Persico used a crew of corrupt brokers he controlled to “pump up” the prices of stocks that Chalem gave him. The crooked brokers touted the stocks to unsuspecting investors who would buy them and end up with worthless paper when Chalem would “dump” his own holdings at artificially high prices.

A person who knows these kinds of things tells me that Abramo would have had to approve the killing even if it was carried out by the Columbo family. After all, Chalem was his money-maker. One doesn't kill one's milch cows if one can avoid doing so.

I've never really understood why these guys were killed. The mob people involved in Wall Street at the time, even the Russian mob guys (who were fifty times as violent as their Mafia brethren) did not leave a trail of bodies behind them. It doesn't seem likely they'd have been killed unless there was either a massive ripoff or it was believed that one or both of them was about become an informant.

Complicating the investigation is that Lehmann may be a red herring. Capeci says that state and federal authorities believe that Chalem was the target, and that Lehmann might just have been in the wrong place at the wrong time.

This is shaping up to be just another of the thousands of mob killings over the years that have never been solved, and never will be.

© 2009 Gary Weiss. All rights reserved.

Goldman's PR Offensive: What's in it for Them?

2009-11-18T13:29:00.009-05:00

Once upon a time I called Goldman Sachs to see if I could get cooperation for a story I was working on. Goldman was not the subject of the story, but played a role. The spokesperson's response was enjoyably candid: "What's in it for us?" The answer was no.

These people are sweethearts and always have been. It surprised me that Matt Taibbi's "vampire fish" article, flawed as it was, received such an unfavorable reception from the financial press, given the storied arrogance of this company.

Today I read about the Goldman Sachs "$500 million and an apology" p.r. offensive with that question in mind. What's in it for them?

Obviously nobody over the age of seven is going to believe that there is any sincerity affixed to the aforementioned apology. And that $500 million is as crass a p.r. maneuver as one can find.

So why engage in an insincere p.r. maneuver and give an "apology" that is absolutely meaningless--particularly since CEO Lloyd Blankfein didn't specify what exactly he was apologizing for?

I'm honestly flummoxed. It won't placate anybody. It won't satisfy anybody. And as for those "small business owners" that $500 million is going to benefit: does anyone truly believe that Goldman gives half a hoot about them?

A page one story in the New York Times, perhaps, so as to divert attention from this kind of thing?

Won't work.

It was, in short, a waste of money. But Goldman can afford it.

© 2009 Gary Weiss. All rights reserved.

They Don't Call it 'Jonestown' For Nothing

2009-11-17T17:00:00.010-05:00

Privacy? Never heard of it.

The Internet nickname for the Investor Village message board is "Investors Jonestown" because of its singleminded fealty to corporate management--enforced by kicking off corporate critics, as they did with Sam Antar, whose investigation of Overstock.com's accounting was vindicated by reopening of an SEC investigation.

With most critics of the company kicked off, it's little wonder that the IV board has had a grand total of one post on Overstock.com's recent firing of its auditors and late filing of its 10-Q. Hell, even in the real Jonestown there were more than one who wouldn't drink the kool-aid.

IV may be even kookier than I thought. One IV member claims that IV's owner, in violation of every privacy precept in creation, actually knew his account password, chastising him for it because it was critical of Overstock CEO Patrick Byrne. ("Blue" in the message duplicated above is Ralph "Blue" Kidd, the "CEO" of this message board, which he runs out of his house in a working-class suburb of New Orleans.)

I find this account a bit hard to believe because (as the person who replied to him pointed out) ordinarily passwords are not available to board managers.

True, but this is a message board whose business model is based on censorship and kowtowing to corporate managers. I wouldn't put anything past those guys.

© 2009 Gary Weiss. All rights reserved.

Don't Worry, Folks: Frank DiPascali is Still in Jail

2009-11-17T13:31:00.004-05:00

In the past I've decried the behavior of U.S. District Court Judge Richard J. Sullivan, who has pandered to public sentiment by refusing to release on bail the chief cooperating witness in the Bernie Madoff case, Frank DiPascali Jr.

Doing so, I've pointed out, makes the job of cracking white collar cases harder, not just in the Madoff cases but in future cases. Hey, that's how our system works. It depends on rats.

Today, Sullivan issued a simply amazing order, reproduced below, reaffirming that yes, Frank DiPascali is still in jail.

The order was prompted by an email by some guy who wrote the judge, thinking (wrongly) that Sullivan had shown some sense. No sir! Not this judge.

Now, I'm not a lawyer, but this is one of the oddest court filings I've ever seen.

© 2009 Gary Weiss. All rights reserved.

A New Editor, and Layoffs, Coming to BusinessWeek

2009-11-17T12:04:00.004-05:00

The process of watching the BusinessWeek-Bloomberg integration is starting to get discomfiting (not that it was ever especially pleasant) for BW alumni like myself.

The good news is that BW has a new editor-in-chief with an intriguing resume: Josh Tyrangiel, a deputy m.e. at Time magazine and head of its online operations.

The bad news comes in the form of a memo leaked to Gawker, quoting Norm Pearlstine hinting pretty strongly at layoffs.

For a while I had thought that there might be a "Sully Sullenberger" situation--a landing without casualties. Ain't happening.

UPDATE: Looks more like TWA Flight 800 than a soft splashdown in the Hudson. The Wall Street Journal says a 25% staff cut is expected, with 100 staffers thrown out on the street.

© 2009 Gary Weiss. All rights reserved.

Look Out Below! Overstock.com Jumps Off a Cliff

2009-11-16T17:55:00.029-05:00

Not to worry, the CEO has plenty of lies if you don't believe his latest ones

People sometimes ask me about my fascination with Overstock.com. I've compared it to Marley, very much in jest of course. (Comparing such a nice dog to such awful people!) The serious answer is that this company is about as close to street criminals as you can find in corporate America--openly cooking its books, openly stalking its critics.

Now, very much in the open, the company has jumped off a cliff, proverbially speaking. This afternoon, the company belatedly announced that it fired its auditors on Friday, and today it filed an unaudited un-vouched-for, late Form 10-Q in violation of a host of SEC regulations.

So now Overstock is not current with its filings, which means that its access to the capital markets is essentially crippled. Which means bankruptcy, unless Byrne can figure out some other source of cash (his trust fund?) Profits, except those obtained through numbers-juggling, are not in the cards.

Bad companies are often not current what their filings. What is amazing is that Overstock went ahead and filed its 10-Q without an auditor reviewing it. Even the most sleazebucket penny stock outfits, even Bernie Madoff, manage to get some accountant somewhere to review their filings before sending them in to the SEC. I have never heard of even the most irresponsible company filing an unreviewed financial statement.

To top off all this, Overstock issued a press release by its wacky CEO, Patrick Byrne, replete with an unctuous quote from Nietzsche, that is so totally full of crap that I doubt that even the most brain-dead regulator will fail to take note.

The letter says:

In February 2009, we were notified by a partner that we had overpaid it approximately $700,000, but that the partner wanted to reach a mutual solution to this overpayment and another open issue (the partner has asserted that we might owe it in excess of $400,000 regarding this other issue). At that time, we doubted our ability to recover this overpayment and we could not reasonably estimate what we might recover.

This statement, if true, presupposes that Overstock's management is so completely FUBAR, its accounting controls so screwed up, that it managed to overpay somebody by a sum that is substantial for a company of this size and unprofitability. No company is that inept, not even this one. There are a number of reasons why a company would overpay but... well, let's not get into that right now.

But even if you swallow this obvious hoo-ha, it's plain that Byrne is covering up for the "cookie jar reserve" that has been described in detail in the past by white collar crime expert Sam Antar.

The rest of the letter spins the fact that its auditors at Grant Thornton disagree with the way the above "overpayment" was handled. So it was, naturally, fired. But previous auditors at PriceWaterhouse Coopers, no longer in the company's employ, agree.

So, PWC is coming back on board... right? I'm sure that PWC, or any other reputable accounting firm, would be only too happy to work for such upstanding people.

There will be another conference call, on Wednesday, to give Byrne yet another opportunity to duck questions from Sam Antar, spin and lie.

Here's one question somebody might want to ask: who got fired for the "overpayment"? The answer, I'm sure, is that it's all a personnel matter... or the accountants are good Mormons..... or maybe that it wasn't an accidental, ohmygosh-type overpayment after all but something else....

Oh my, I am so suspicious! Shame on me.

Obviously Byrne is expecting the SEC to get off its duff and, this time, end its ongoing investigation with action. Under "risk factors," the company disclosed as follows:

Public statements we or our chief executive officer, Patrick M. Byrne, have made or may make in the future may antagonize regulatory officials or others.

We and our chief executive officer, Patrick M. Byrne, have from time to time made public statements regarding our or his beliefs about matters of public interest, including statements regarding naked short selling. Some of those public statements have been critical of the Securities and Exchange Commission and other regulatory agencies. These public statements may have consequences for us, whether as a result of increased regulatory scrutiny or otherwise.

I can't find a better explanation for Byrne's anti-shorting jihad: to give him a handy excuse if his mismanagement of the company were to ever result in regulatory sanctions.

Again, "mismanagement" is the kindest possible explanation one can find for an "overpayment" of that magnitude. Something tells me that we may wind up in a situation in which a "cookie jar reserve" is the kindest thing you can say about this company's accounting.

Well, as they say, to be continued. . .

UPDATE: Sam Antar has an analysis, calling this a "real dumb move," and Henry Blodget expresses amazement. Blogger Chris Faille compares Overstock to Refco. and William Wolfrum weighs in. So does Floyd Norris, who evidently enjoys Byrne almost as much as I do.

"Dumb" is an understatement. "Suicidal" is more like it. Overstock now can be delisted by Nasdaq, which has a strict auditor requirement, and its stock trading halted by the SEC. Byrne can keep that from happening by finding an accounting firm stupid enough to work for him, but here's something that's guaranteed: since the company is no longer current in its filings, it can't issue stock to raise cash for the next twelve months. That is acknowledged in the 10Q, on page 3:

Filing an amendment to this report, when the independent registered public accountants’ review is complete, would eliminate certain consequences of a deficient filing, but the Company may become ineligible to use Form S-3 to register securities until all required reports under the Securities Exchange Act of 1934 have been timely filed for the 12 months prior to the filing of the registration statement for those securities.

With more money going out than coming in, and no access to borrowing or stock issuing... oh my.

Look out below!

Later, Byrne was quoted in the Salt Lake Tribune as telling the SEC to go to hell, though apparently his medication set in and he withdrew the remark:

"We refuse to knuckle under the SEC's and Grant Thornton's insistence that we abandon generally accepted accounting principles," Byrne said Tuesday, later softening the statement to include only Grant Thornton, saying the Securities and Exchange Commission has a right to look into the company's financials. "Hopefully in the next six weeks, we'll get this cleared up with the SEC."

What's going to happen in the next six week? Does the expect the SEC to revoke the securities laws? This guy is beginning to remind me of Bob Brennan, the head of the First Jersey Securities penny stock house, who took a similarly defiant stance toward the SEC--and wound up in prison.

© 2009 Gary Weiss. All rights reserved.

Asleep in Connecticut

2009-11-14T11:20:00.005-05:00

My very first job was at the Hartford Courant's Groton-New London bureau, so I had a very personal interest in the front page New York Times story the other day on how New London was royally screwed by Pfizer--pulling out of a redevelopment project after the city fought up to the Supreme Court, in Kelo vs. New London, to fight for the right to take property for private purposes.

But according to Columbia Journalism Review's Audit column, the local newspapers in Connecticut missed the boat, with both the The Day of New London and the Hartford Courant giving short shrift to the Kelo angle.

The Courant's local bureau was shuttered many years ago for obvious economic reasons. We had very few readers in southeastern Connecticut. But that part of the state generated numerous state-wide stories because of its massive military-industrial complex, which included (and still includes) a big Pfizer plant in Groton.

I can't see the old, stodgy Courant de-emphasizing the national implications of such a story. But the belated response of The Day is even more shocking, because that's long been one of the best small papers in the country. The reaction of the Times was the most comprehensive, but even its take on the story was several days late.

As the Audit points out, blogs and websites got there first. This has been a sad week in Connecticut journalism.

© 2009 Gary Weiss. All rights reserved.

One Benefit of Bloomberg's BW Purchase: Goodbye Maria Bartiromo

2009-11-12T22:58:00.004-05:00

One of the many cockamamie decisions of the former BusinessWeek editor-in-chief, the soon-departing Steve Adler, was to hand over precious editorial space to fluff, ranging from a wine column to "Face Time" puff pieces by CNBC's Maria Bartiromo.

The column is gone, according to BW's Monica Roman Gagnier's Twitter feed:

Norm Pearlstine tells BW staffers Maria Bartiromo's FaceTime column is being killed in BusinessWeek, after the Bloomberg acquisition closes

Reminds me of what somebody said about the departure of Lou Dobbs from CNN: an "improvement by subtraction."

© 2009 Gary Weiss. All rights reserved.

Study: Bear Stearns and Lehman Brothers Not 'Destroyed' by Naked Short Selling

2009-11-12T18:16:00.007-05:00

Readers of this blog may find this article in the Big Money of interest, particularly the last part, in which I cite an academic study that debunks the theory that Bear Stearns and Lehman Brothers were brought down by naked shorting.

The study was based on "fails to deliver" data, which naked shorting conspiracy theorists have been using as a proxy for naked shorting.

I think that fails are a questionable way of plotting naked shorting, but even if you use it as a proxy for NSS, as the NSS conspiracy theorists do, the numbers show very clearly that such trading did not cause the decline in share prices for Bear and Lehman. The fails took place after both companies tanked.

Matt Taibbi based his entire recent, wretched Rolling Stone article on that same premise, which turns out to be false. No surprise, as most of his named sources were related to Overstock.com's wack-a-doo CEO Patrick Byrne, or were otherwise old veterans of the NSS conspiracy circuit. Among them were someone from the Haverford Group, which he didn't mention is a Byrne-owned company, and ex-Overstock lawyer Brent Baker, without his mentioning that his client list includes two of the most wretched companies to use NSS as an excuse, Universal Express and the recently-indicted CMKM Diamonds.

You'd think that Taibbi could have at least discovered that Byrne owned Haverford. Isn't that hard, for chrissakes.

Looks like Taibbi was really conned--again.

© 2009 Gary Weiss. All rights reserved.

Eureka! The SEC Enforced Regulation G!

2009-11-12T14:03:00.008-05:00

Will wonders never cease?

This isn't likely to get much notice, but it's pretty big news: the SEC actually enforced one of the most crucial regulations preventing public companies from cooking the books, known as Regulation G. The agency reached a settlement today with SafeNet Inc. and two former senior officers, for Reg. G and options backdating.

Reg. G is designed to protect investors whenever companies stray from Generally Accepted Accounting Principles. Shamefully, the SEC has never gotten around to enforcing this rule until today. It dates back nearly a decade to the Enron era.

Reg. G also figures in the ongoing Overstock.com circus, in which the company has repeatedly strayed from GAAP and brazenly manipulated its earnings. The latest chapter in the Overstock saga came on Monday, when the company--increasingly behaving like a sleazy penny stock shop--announced that it was going to miss the legal deadline for filing its third quarter 10-Q.

White collar crime-fighter Sam Antar, who has been repeatedly stalked and harassed by Overstock for scrutinizing the company, pointed out in his blog that the typically ambiguous filing may disclose yet more Regulation G-GAAP delinquency.

Overstock.com's wacky CEO Patrick Byrne, who refused to field any questions from Sam at a sham conference call on Nov. 3, was asked by Sam flat-out if Overstock was in compliance with Reg. G. Instead of responding with his typical bluster and bullying, Byrne meekly hid behind Regulation FD--ironic, since he has routinely violated that other unenforced rule numerous times, releasing material information on bulletin boards and blog posts.

Here's what I think is interesting about the late filing notice. It says that Overstock "is continuing to analyze the proper accounting treatment for $785,000 the registrant received during the first quarter of 2009." It goes on to say that the company "believes the amount is properly recognizable in the first quarter of 2009, when the cash was received. However, the registrant is continuing to review the issue, and may ultimately conclude that the amount should have been recognized in 2008."

As one longtime watcher of this sleazebag company pointed out to me, "if you believe an accounting treatment is correct, then why would you be analyzing it to determine if it is in fact correct?" One can only imagine what's going on behind the scenes. From what I've heard (and you'd be surprised who's talked with me), Overstock's executive offices have the atmosphere of a loony bin.

Sam has made this company's Reg. G violations crystal clear in his blog. It's now up to the SEC to, for the second time in its history, enforce that crucial investor-protection rule.

Oh, I almost forgot SafeNet. The allegations against that company read as if they were taken out of Sam's blog, if you substitute "Overstock" for "SafeNet." It's all there--manipulating earnings, using non-GAAP measures to mislead investors. Its top officials got slap-in-the-wrist fines, promised not to do it again, all the while neither admitting nor denying liability.

Wouldn't it be great if the SEC, one of these days, actually forced one of thee crumb-bum companies to actually admit that they did something wrong?

© 2009 Gary Weiss. All rights reserved.

'Translating Byrnespeak'

2009-11-05T13:48:00.006-05:00

Ask him no questions and he'll tell you no lies

I stumbled on this post in a stock message board today, analyzing the recent Wall Street Journal video interview of my Marley, Overstock.com's ever-slippery CEO Patrick Byrne.

The interview is available here. I assume the interviewer picked Byrne because he is "controversial," sort of the way the H1N1 virus is "controversial."

According to the transcript, Byrne is hanging tough on the company's accounting, calling his fourth quarter earnings numbers GAAP-compliant when they clearly are not.

But the real thing to treasure about this interview is its Nixonian quality. I'm taking the liberty of reprinting the message board post in its entirety below:

An amusing portion of a transcript on the Wall Street Journal website in which Julia Angwin interviews Patrick Byrne. (The transcript is shot through with typos and anomalies, which I will not bother to correct or cite within the quotation, which has been pasted here.) Her question: "Angwin: Jeff Matthews says, 'Patrick Byrne has said thousands of companies have been destroyed by naked short-selling. Ask him to name 100, or just 10.'”

Answer in Byrnespeak:

First of all, I quote Robert Shapiro on that. Shapiro was, is a Harvard PhD, former undersecretary of commerce for economics. He wrote a paper in ‘04 that said at least 200 had been damaged. He later upped his estimate to a thousand. You basically look at any company that’s been on the RegSHO list, which is this of companies, publicly traded companies that are seeing a certain technical defect in their stock settlement. And that’s a pretty good sign –it’s possible to appear on that list without anybody have [sic] been purposely doing anything wrong, but it’s overwhelmingly likely that if you’re on that list, it’s because somebody at some point has been manipulating your stock. In fact, to me, then, the naked short-selling issue is just one problem of the whole bear raid issue, which is a question of stock manipulation. The SEC has clearly been in the pocket of hedge funds, and inappropriately close to hedge funds, which is why Bernie Madoff was able to get away with it for so long. And, I think, there’s some unseemly relationships developed on Wall Street–I won’t go into any more detail–that let companies, that let hedge funds basically take out fire insurance on a company and then set a match to it.
Number of words: 216. Responsiveness: none. Twisting of facts: equating "damage" with "destruction", and "thousands" with "a thousand", within the context of the question and answer. Irrelevant distracting arguments and attacks: 4, at a minimum, depending on how you count them: Equating the SHO list with destruction; citing authority for a basic underlying opinion without answer the question, which was as to specifics; subsuming the question, without answering it, into a larger category, thus trying to make the answer look irrelevant; and attacking the SEC and other unspecified Wall Street figures rather than answering the question.

Appropriate answer in English, fleshed out with proper politeness:

I'm sorry. I can't name any.

Number of necessary words: 6. Responsiveness: perfect. No irrelevancies or distractions.

What a boob. It's a pity Angwin isn't more adept at follow-ups.

Another typical Brynesian example: "Angwin: There’s all this talk about Lord Sith, or Sith Lord. So, for people who don’t know, I guess you, in August of 2005, said that there were people who were trying to drive your stock down and you believe that there was somebody named a Sith Lord who was orchestrating this. And so Phil Painter, our reader, wants to know, 'Who is the Sith Lord?' And he wants you to say it’s a real, identifiable person."

The answer in Byrnespeak:

Well, first of all, the call I gave was about much more than my own company. And, in fact, it seems to be one of the elements of the cover-up not to talk about what I disclosed on that call. Which was basically that there were a set of hedge funds, who were playing these games. They had an inappropriate–I think the intersection, as long as we’re asking–the intersection of these hedge funds and the journalists, this guy named Jim Cramer, I supplied a certain video of Jim Cramer to a certain comedy show, that was used in revealing and exposing Jim Cramer. I also went after the SEC for being captured; I went after Kroll, which is sort of the Blackwater of corporate intelligence, who I said builds networks of corporate insiders for hedge funds. Well, if you look in the indictment of Raj Rajaratnam, you’ll see a lot of these things I was talking about in ‘04 and ‘05 seem to be bubbling to the surface. The sith–when the public is ready to acknowledge that there is a sith, that there is a sith among us, we’ll get to the Sith Lord.
An even more evasive answer than the previous example. I won't even bother to translate it into English, since it's just 198 words, all of them meaningless and irrelevant to the question until we get to the part where the public is to blame for his inability to answer. Yes, sir. When the public is ready, Byrne will speak out with a clarion voice. Don't hold your breath, though. I have an idea that Byrne won't ever find that the body politic has a sufficient appreciation of his fantasy world to warrant his condescending to provide the information requested.

Yes, what a boob: a boob for the ages.

UPDATE: Apparently the "Sith Lord" is a sensitive point for my Marley, sufficient to send him growling into his computer, rewriting history in this rubbish.

To recapitulate: Byrne used "Sith Lord" to describe a specific person who was manipulating Overstock shares. There's no doubt about it at all, and the problem is not "choagies" but Byrne's deceit. See Bethany McLean's Fortune article.

He lied in a conference call, and now he's lying about his lie. This guy is really a phenom.

© 2009 Gary Weiss. All rights reserved.

Patrick Byrne Can Run From Tough Questions, But He Can't Hide

2009-11-04T08:46:00.003-05:00

To no great surprise, Overstock.com CEO Patrick Byrne turned off the microphone at his quarterly conference call yesterday, refusing to allow questions from white collar crime-fighter Sam Antar--and even breaking his promise to respond to questions that Sam had previously emailed.

As Sam points out in his blog, Byrne's numbers are useless. They can't be accurately compared with prior quarters.

You really have to wonder: Where is the SEC?

The agency now had two investigations pending against Overstock: one probing previous earnings restatements, which clearly pertain to Byrne's creation of a "cookie jar reserve" to manipulate his financial statements, and another, disclosed yesterday, regarding its 2008 Form 10 K/A and second quarter 2009 10Q.

But as the Madoff investigation proved, a determined miscreant can easily shrug off an SEC probe by simply lying. A previous investigation ended without action. Will the SEC drop the ball again this time?

© 2009 Gary Weiss. All rights reserved.

RIP, Sharesleuth Business Model

2009-11-03T09:08:00.010-05:00

When Mark Cuban opened his Sharesleuth website three years ago, with a "business model" based on his trading in advance of Sharesleuth items, Cuban smugly heralded the site as the Next Big Thing in financial journalism in a series of arrogant blog posts.

It hasn't turned out that way, as is evident from the latest item. Today the site had an item on Michael J. Xirinachs, a "financier" enmeshed in the fraud involving naked shorting poster child Universal Express. As usual, Cuban hasn't taken a position in any of the stocks mentioned in the item.

That's significant because Cuban is supposed to be financing this site by doing just that. And he hasn't taken a position in any Sharesleuth stocks since this item on a Chinese company in March 2008.

Maybe the reason is his ongoing insider trading case. But I suspect that he hasn't been trading in advance of these items because he can't. There are a lot of good shorting opportunities available among microcaps, but very few of these stocks can be shorted.

In fact, I think it's pretty plain by now that the Sharesleuth business model is dead. Good riddance. It's failure was pretty obvious back in 2007, after it emerged that his trading wasn't the money machine he had anticipated.

This disclosure, if current, shows that Cuban has taken positions in a grand total of three companies, and that just two of his short positions are still pending.

Sharesleuth also has been pretty much of a flop from a journalistic standpoint, and not just because of the obvious ethical issues. It just has not been a particularly useful website. Sharesleuth's output has been sparse--he has embarked on full-scale "investigations" on a grand total of five companies in the past three years, and "short takes" on a few others. The items tend to be overlong and written in police-report fashion, with little context.

When he startd up Sharesleuth, Cuban said as follows in a blog post entitled "Business Journalists Should be Thankful":

If Sharesleuth is successful, you can bet that any of the above with billions of dollars at stake will gladly hire the best and brightest business journalists they can find.Bigger the rolodex, the better. Old is the new young. Crusty is the new Yuppy.They will unleash those journalists to uncover stories that can give them an edge.

That hasn't happened and you know what? I don't know of any investigative journalists who are too broken up about it.

© 2009 Gary Weiss. All rights reserved.

Madoff Lesson: Liars Can Thwart an SEC Investigation

2009-11-01T11:08:00.009-05:00

The 536 exhibits released by the SEC Inspector General late Friday on Bernie Madoff don't seem to contain any explosive new revelations, but underscore an essential point about SEC investigations: if you are the target of a probe, just lie, again and again.

The SEC won't check up, even if it's obvious.

Ask Bernie. The documents show that he lied on the most obvious thing possible -- whether he managed money for people. He said no. The SEC either knew this was a lie or was brain-dead not to check up on it, if for no other reason than that there had been two articles in the media in 2001, in Barron's and MAR/Hedge, about what an astounding money manager he was, and raising questions about just how he performed such a fete. (Included among the exhibits is the transcript of a 2009 interview with the author of the MAR./Hedge article, in which he complained that he was ripped off by Barron's.)

Notes to one interview with the SEC in April 2005 say that "Based upon [name deleted] algorithm and capacity to manage money, this led us to ask if [name deleted] (or anyone at the firm) has ever managed money for an outsider. Bemie said, Never."

A few days later, an SEC investigator reported: "I specifically asked Bernie if the London office manages money for outside investors. Bemie said it is my money."

And lastly, here's a record of the cock-and-bull story that Madoff gave the SEC during an interview a few weeks later:

One thing I've learned over the years is that the SEC has a very poor sense of what is actually happening out there in the real world, that it relies too much on documents supplied by the target of the probe, and that it fails to do elementary, shoe-leather investigation. In this case, some basic investigation would have proven that Madoff was lying about a fundamental fact.

The SEC simply didn't have the contacts and street-level sources required to contradict Madoff on something as simple as whether the man ran money for people.

Instead, the probe showed the SEC investigators--one of whom wound up marrying Madoff's niece--tripping over their own shoelaces. Madoff himself marveled at the incompetence of the SEC.

We've seen the SEC's ineptness proven time and time again, such as in its botching of an investigation of Overstock.com's accounting, despite in-your-face GAAP violations uncovered by a whistleblower. The probe has been reopened, but Overstock.com CEO Patrick Byrne has already learned the Madoff' Lesson: Lie, early and often. Lie on your financial statements. Lie in your conference calls. Put aside a "cookie jar reserve" to manipulate your earnings.

The SEC doesn't give a damn.

There are more large and material lies, I hear, unrelated to the financial statements, that haven't publicly surfaced.

Will the Overstock strategy of deception work? The Madoff case is depressing precedent that it will, but the jury is still out.

© 2009 Gary Weiss. All rights reserved.

Patrick Byrne, in Early-Morning Rampage, Makes Another Mess

2009-10-31T15:44:00.008-04:00

This is getting monotonous.

I don't call him "my Marley" for nothing. Overstock.com's wacky CEO Patrick Byrne went on a rampage in the wee hours this morning, overturning tables, chewing carpets--and, while he was at it, destroying any pretense of separation between Overstock.com and his personal smear site, Deep Capture.

Seems that Byrne received an email from white collar crime-fighter Sam Antar, whose analysis of Overstock's accounting recently caused the SEC to reopen an investigation of the company. He had made a polite request to appear on Byrne's upcoming third quarter conference call. His email read as follows:

Patrick:

I recently learned that Overstock.com scheduled its Q3 2009 conference call for November 3, 2009. If you agree, I would like to participate in that call like other analysts and ask questions about Overstock.com’s financial disclosures. Please let me know by Monday if you will let me participate in the conference call.

Sam

That will never do. After all, Byrne was expecting his usual audience of quietly terrified brokerage house analysts, asking softball questions and ignoring the elephant in the room--that Overstock has systematically cooked the books.

So Byrne immediately went berserk on his Deep Capture smear site, posting Sam's email and a sneering, Jew-baiting response denying the request, saying that Sam could only ask four questions of up to 25 words, sent in advance via email.

This happened shortly before dawn Utah time. That assumes Byrne actually is in Utah, where he makes believe he runs the company, and not in New York, preparing to march in the Halloween Parade, perhaps disguised as a law-abiding corporate executive.

Byrne has every reason to be terrified of Sam, and to go off his nut whenever he hears from him. After all, if it wasn't for Sam, he wouldn't be under a newly reopened SEC investigation.

But evidently Byrne forgot that he has repeatedly argued that Deep Capture has "nothing to do with Overstock," even though he founded it, funds it, it focuses on trashing the company's critics, and it runs on Overstock's Internet servers. Sam's email had nothing to do with Byrne's pet "naked short selling" cause.

Byrne also forgot that he makes it a practice to open the conference call to persons unaffiliated with brokerage houses when it serves his purposes, notably when he allowed a character named Phil Saunders, a/k/a "Bob O'Brien," to participate in a January 2005 conference call.

If the SEC is serious in its current investigation--which has yet to be demonstrated--it won't shrug off this latest episode as merely another example of a crazy CEO not acting his age.

© 2009 Gary Weiss. All rights reserved.

Bernie Madoff Speaks! (and lies) While Arthur Levitt's Memory Fails Him

2009-10-31T12:02:00.014-04:00

Notes of Bernie Madoff's interview with the SEC inspector general were released yesterday, and they make fascinating reading--as long as you keep in mind that Madoff was lying through his teeth, primarily to protect people.

Here's the SEC exhibits page, and here (PDF) is the record of Madoff's interview.

You can be sure that Madoff was lying because of this:

When questioned as to whether he was concerned about Frank DiPascali giving testimony, Madoff answered,"No, he didn't know anything was wrong, either."

In fact, DiPascali, who was Madoff's number two man, has already pleaded guilty, and at the time of his plea in August he said as follows:

“I knew I was participating in a fraudulent scheme,” DiPascali told U.S. District Judge Richard Sullivan. “I knew everything I did was wrong, and it was criminal, and I did it knowingly and willfully. I accept complete responsibility for what I did. I apologize to every victim and to my family and the government. I am very, very, very sorry.”

This is the clearest example I can find of Madoff lying to government officials during the period following his arrest.

However, I'm less dubious about Madoff's statements about how tight he was with former SEC officials and commissioners. Madoff said the following about the super-hyped ex-SEC chairman Arthur Levitt:

Madoff stated that he knew Levitt at Amex, before he was at the SEC, and stated that he knew Levitt "very well." Madoff stated that he went to lunch with Levitt once, to complain to Levitt that he "had to do something about intemet stocks." Madoff stated that Levitt subsequently "went on t.v. and gave a warning about it."

In his interview, Levitt tried hard to convey the impression that he didn't know Madoff from a hole in the ground, though his response was... well, let's call it a "lawyer's response." His memory has failed him when it comes to Madoff, poor dear, preventing him from giving an unequivocal answer:

Mr. Levitt stated that he met Bernard Madoff on an infrequent basis while he was Chairman of the SEC, mostly at seminars or outside functions. He approximated that he saw Mr. Madoff once a year while he was the Chairman of the SEC. He did not recall having lunch with Mr. Madoff and did not believe he ever met with Mr. Madoff alone. Mr. Levitt stated he did not have a personal friendship with Mr. Madoff, had never socialized with him, and did not know his family, other than having met Bernard Madoffs brother.

Note what I've put in boldface italics. He approximated, he did not recall, he did not believe.That's my Artie! The Investor's Champion, to quote a puff piece that I'm ashamed to say once appeared in my alma mater, BusinessWeek.

Yes indeed, you can rest assured that Artie Levitt was no pal of Bernie Madoff (that being an approximation and belief to the best of his recollection).

© 2009 Gary Weiss. All rights reserved.

If Zelnick Had Bought BusinessWeek

2009-10-30T16:40:00.004-04:00

It's still unclear how many former BusinessWeek editors will be hired by Bloomberg L.P., but one thing is increasingly clear: it could have been a hell of a lot worse. Peter Kafka describes the nightmare scenario: a purchase by private equity bloodhounds ZelnickMedia that would have been only marginally better than a simple shutdown of the magazine.

This is how one-sided the Zelnick offer would have been: McGraw-Hill would have wound up paying Zelnick to take BW off its hands. In return, BW would have been ripped limb from limb, and the entire staff would have been laid off.

Kafka reports that the sale would have entailed:

Wind down BusinessWeek’s print business “as profitably as possible”–the company would have to honor existing subscriptions and could still sell ads in the magazine. But the focus would be on building up BusinessWeek’s Web site, which has a decent-sized footprint, though not a huge one.

Dump almost all of the company’s newsgathering staff and outsource most of that work to Thomson Reuters (TRI).
Employ a small handful of editorial employees–perhaps 20, down from the 200-plus who are there now. Some of them would run a Huffington Post-style aggregation site that produces no original content, and some more expensive hires would produce a smattering of high-quality reporting and writing designed to burnish/sustain the BusinessWeek brand. “Just to give it uniqueness and sizzle,” my source tells me.
Dump most of the existing business side, as well, but overhaul and bulk up the sales force.

These are known as "bullet points" in the business. And how. Bullets as in firing squad, with BW--and McGraw-Hill's reputation, being the blindfolded prisoner. It would have been an enormous humiliation for Terry McGraw.

Fortunately, the cavalry stepped in, in the form of Bloomberg. Compared to other media shutdowns, then, BW's sale turned out to be far better than expected.

That still doesn't let M-H's management, and the magazine's, off the hook for a redesign that failed to keep the magazine alive and was a major departure from the magazine's traditions.

Kafka reports that BW president Keith Fox is stepping down, as expected, but somewhat surprisingly is staying with the company. Fox's departing memo says, "I am humbled by BusinessWeek’s 80-year history." He sure ought to be.

© 2009 Gary Weiss. All rights reserved.

My Marley Growls at the SEC

2009-10-27T14:12:00.004-04:00

My Marley, Overstock.com's wacky CEO Patrick Byrne, has made a mess again. Oh my! Seems that he's peed all over the legs of the SEC, again.

White collar crime-fighter Sam Antar points out in his blog that Byrne has chosen to tough it out with the SEC, which just relaunched an investigation of the company.

Sam reports:

Earlier today, Overstock.com filed a registration statement in connection with its 2005 Equity Incentive Plan. CEO Patrick M. Byrne, CFO Steven J. Chesnut, audit committee members Allison H. Abraham, Clay Corbus, and Joseph J. Tabacco Jr. all signed off on Overstock.com's SEC filing. In addition, PricewaterhouseCoopers (PWC), Overstock.com's former auditors, consented to the company using flawed financial reports in its SEC filing.

The problem is that none of Byrne's financial statements have been in accordance with Generally Accepted Accounting Principles. Byrne created a "cookie jar reserve" in order to manipulate the numbers, thereby inflating the share price.

There he goes again, making a mess. It's not the first time, and it won't be the last. Ruff! Ruff! Down boy.

© 2009 Gary Weiss. All rights reserved.

How Did Fox Business News Wind Up With Patrick Byrne as an 'SEC Expert'?

2009-10-22T10:01:00.005-04:00

William Wolfrum's blog picks up the amazing story of how Fox Business News embarrassed itself badly the other day, by using the twice-investigated SEC target, Overstock.com CEO Patrick Byrne, as an "expert on".... the SEC! (HT: Talking Biz News)

I observed the other day that the wacky Byrne is "my Marley"--a source of never-ending amusement. But I didn't count on the budding Fox biz network to use Byrne as a straight man. While he is a tempting guest for Fox, given his far-right politics, you'd think that Fox bookers would do a bit of checking. Or is that an unrealistic expectation?

A gent I know who is far more acquainted with these cable networks points out that FBN may not have known that Byrne was himself the target of his second SEC investigation--even though it has been widely reported, most recently by Crain's New York Business. Crain's even described how the probe was prompted by whistleblower ex-con Sam Antar.

Still, you'd think that Byrne would have had the courtesy to spare his guests embarassment (assuming they didn't know) by volunteering that information. But if so, he might have found himself actually asked about the probe, as he once was by a Fox host.

Bill Wolfrum concludes that "when FBN can’t bring themselves to mention a massive conflict-of-interest from one of their guests - who happens to be a long-time Republican - there’s really no need to treat FBN like a real business network." I'd only reach that conclusion if they put Byrne on the air knowing full well that he was the target of an SEC investigation, and didn't ask him about it.

© 2009 Gary Weiss. All rights reserved.

First Casualty of the BusinessWeek Sale

2009-10-21T11:30:00.004-04:00

That was fast. Steve Adler's resignation from BusinessWeek was announced late yesterday, and according to Keith Kelly it is likely to be followed by others. Kelly makes it seem as if the staff is in chaos, with one other top editor likely to go and the status of another unclear.

Bloomberg has a reputation for being no-nonsense in such matters--in contrast to McGraw-Hill, which kept the magazine's top masthead in stasis even as it drowned in red ink. Still, I was expecting a bit more of a transition period.

In the current issue, Adler has an editor's memo in which he ends by saying "We look forward to continuing to serve you—and continuing to make ourselves indispensable." Seems his use of the word "we" was premature.

Folio reports ominously: "Bloomberg is not expected to ask all, if any, BusinessWeek employees to stay on following the acquisition."

If there are to be massive layoffs, I imagine it's only fair for the top editors to go first. It's a tragedy, and one gets the sense that it didn't have to be this way.

Initially I thought Adler was taking BW in the right direction. His selection for the magazine seemed to be a surprisingly good choice at the time, and I remember early reports that he was shedding deadwood and making good personnel decisions. But then came a redesign that didn't jell, massive layoffs and advertiser defections. It was a sad end to 80 years of stewardship of the magazine by McGraw-Hill.

© 2009 Gary Weiss. All rights reserved.