People of State of California
v.
Overstock.com Inc.; Does
11/17/2010 RG10-546833
(Oakland)

Complaint for civil penalties and injunctive relief. The defendant makes misleading advertising claims about its prices by listing the comparative “List Price” or “Compare At” price at a level that is actually the “highest price” for a product rather than the prevailing market price. The defendant promises the lowest prices when it actually sells products at higher prices than many merchants.
Free download

Nancy O’Malley
District Attorney of Alameda County

If you propose any regulation the Dow might drop a few points hence you can’t propose any regulations

—-sarcasm off—

Overstock.com and PricewaterhouseCoopers: Errors in Submissions to SEC Division of Corporation Finance
http://whitecollarfraud.blogspot.com/2008/05/overstockcom-and-pricewaterhousecoopers.html
Monday, May 19, 2008

I guess its true — it takes a criminal mind to spot another criminal mind . . .

This evening Overstock.com announced that the company is restating all financial reports from 2008 to Q3 2009 as a result of material violations of Generally Accepted Accounting Principles (GAAP) and other SEC disclosure rules. This announcement vindicates my reporting of a financial statement manipulation scheme by Overstock.com and its unprincipled management team, led by CEO Patrick M. Byrne.

Starting in February 2009, I contacted both Overstock.com (NASDAQ: OSTK) and the Securities and Exchange Commission and reported to them that the company had set up an illegal “cookie jar” reserve to materially inflate its future financial performance from Q4 2008 to Q3 2009.

Instead of properly restating its financial reports to correct its intentional breach of Generally Accepted Accounting Principles and other SEC disclosure rules, Overstock.com CEO Patrick Byrne responded by orchestrating a massive corporate sponsored retaliation campaign against me and other critics who agreed with my findings.

In addition, Patrick Byrne, company President Jonathan Johnson, former CFO David Chidester, and others blatantly lied to and misled shareholders in an attempt to cover up their financial reporting manipulation scheme.

In September 2009, the SEC re-opened a previously closed investigation of the company in response to my reports. In December 2009, Overstock.com fired Grant Thornton as its auditors and vilified them when they agreed with my analysis and told them to restate their financial reports to comply with GAAP. The company filed an “unreviewed” Q3 2009 10-Q report and faces de-listing by NASDAQ.

Today’s news is a complete vindication of my analysis of Overstock.com’s financial reports and shows that the company wilfully engaged in a financial reporting manipulation scheme. The company is restating its financial reports to correct GAAP violations, exactly as I have recommended in this blog. To date, every single initial financial report issued by Overstock.com through out the company’s entire existence has violated GAAP or some other SEC disclosure rule.

I urge the Securities and Exchange Commission Division of Enforcement to bring civil charges against Overstock.com, Patrick Byrne, and other members of the company’s management team for securities fraud. In addition, I recommend that the SEC make a criminal referral to the Department of Justice and that Overstock.com’s management be prosecuted for their financial frauds on investors and retaliation against their critics.

Special thanks to all those people who stood by me. I will provide more details in my blog, soon.

Will they be allowed to cyberstalk and pretext in prison?

Dear Sir or Madam:

Grant Thornton LLP (“Grant Thornton” “We” or our “Firm”) has read Item 4.01 of Form 8-K of Overstock.com, Inc. (“the Company”) dated November 16, 2009. We do not agree with statements concerning our Firm.

Grant Thornton did not issue an audit opinion on the Company’s financial statements. Grant Thornton, therefore, did not take a position as to whether the Company’s financial statements for the year ending December 31, 2008 should be restated. That determination must be made by the Company. Further, paragraph 4 references a report on the Company’s consolidated financial statements for the year ending December 31, 2009. As we have not performed an audit of the Company’s financial statements for any period, this reference is incorrect.

On March 23, 2009, Grant Thornton was engaged to review, not audit, the Company’s interim financial statements to be filed on Form 10-Q for the quarter ended September 30, 2009. Review procedures are substantially less in scope than an audit and consist principally of performing analytical procedures and making inquiries of persons responsible for financial and accounting matters.

We disagree with the Company’s statement in paragraph 7 “that upon further consultation and review within the firm, Grant Thornton revised its earlier position” regarding the previously filed 2009 interim financial statements. This statement is not accurate. The Company brought the overpayment to a fulfillment partner to Grant Thornton’s attention in October. After additional discussions with the Company, the predecessor auditor and receipt of additional documentation from the Company we determined that the Company’s position as to the accounting treatment for the overpayment to a fulfillment partner was in error. Further the Company’s statement does not address the fact that the consultation noted in paragraph 5 was in relation to the ongoing incomplete review of the September 30, 2009 interim financial statements.

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

~~~

We have also read Item 4.02 of Form 8-K of Overstock.com, Inc. (“the Company”) dated November 16, 2009 and disagree with the statements concerning our Firm contained therein. During the course of our incomplete review of the Company’s September 30, 2009 financial statements, we advised the Company that disclosure should be made to prevent future reliance on its March 31, 2009 and June 30, 2009 financial statements. We advised the company to make the disclosure because we became aware that material modifications should be made to the previously filed 2009 interim financial statements to conform with US GAAP. Such modifications are necessary due to the Company having reduced its cost of goods sold in the first quarter of 2009 by receipt of a refund of an overpayment to a fulfillment partner. Further, the Company had additional items which we discussed that were still unresolved at the time we were dismissed, that could have a material impact on the first and second quarter financial statements for 2009. These items are identified by the Company in Paragraph 5 in item 4.01 of the Company’s Form 8-K.

Very truly yours,