Friday, February 23, 2007

The Faulking Truth on Market Reform, Liz Moyer, Overstock, Patrick Byrne, Abortion, Naked Shorting, Obama, Hillary, CMKX, and Hope for America


Overstock Director Bails

Liz Moyer, 02.23.07, 4:10 PM ET's $3.5 billion lawsuit against 10 Wall Street banks has cost it a long-time board member.

John Fisher resigned from the Salt Lake City Internet retailer's board on Friday, citing his disagreement with management's pursuit of the lawsuit, which was filed earlier this month in a California state court and accuses the banks of engaging in a "massive, illegal stock market manipulation scheme" to distort its stock price through naked short selling.

The lawsuit is just one aspect of a two-year-old jihad that Overstock Chief Executive Patrick Byrne has been waging against trading abuses market-wide, not just in Overstock shares. Nevertheless, shares of the company are down more than 70% in the last two years.
Byrne's efforts have been met with sharp criticism by many, though regulators have been looking at ways to shore up rules that would put a damper on some of the very trading abuses Byrne has been fighting to end.

Last week, the U.S. Chamber of Commerce sent a one-page letter to the chairmen of the House and Senate banking committees urging them to hold hearings on "the role that manipulative and fraudulent short selling has on the market and on public companies."

Fisher is not the only board member to leave Overstock in the last year over differences of opinion. Last year, the CEO's father, insurance executive John Byrne, stepped down from the board. In a brief letter Friday, Fisher said he was resigning because he disagreed with the lawsuit, but he praised Byrne for "leading Overstock through tremendous growth."

Last month, Nasdaq founder Gordon Macklin, who was also an Overstock director, died. That leaves Overstock with four directors, including the CEO and another company insider. A brief Securities and Exchange Commission filing Friday by Overstock said the company would take "prompt action" to restore the number of independent directors on its board.

Fisher is a San Francisco-based tech banker who was managing director of Hambrecht & Co. from 1987 to 1996. Hambrecht handled Overstock's Dutch auction initial public offering in 2002, the year Fisher joined the retailer's board.

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