Dr. Patrick Byrne, President of Utah-based Overstock.com, is “one of the free enterprise system’s most compelling figures” according to BusinessJive.com. He’s highly controversial, being hated and maligned by many on Wall Street, while viewed as a folk hero to many investors. What’s all the controversy about?
Dr. Patrick Byrne is engaged in a war against a corrupt practice called “naked short selling.” This refers to the illegal practice of institutions selling stock they don’t own or properly borrow, creating an apparent increase in total supply that drives the price of a stock down. It’s technically called a “failure to deliver” the shares of stock that are sold. Some gurus of Wall Street like Jim Cramer and many in the media and government say they don’t think this really happens or at least isn’t a problem. But the SEC’s own data – the few bits and pieces Byrne and others have been able to squeeze from SEC officials using freedom of information powers – clearly show another story, and reputable economics experts have shown that the data point to a serious problem of corruption. In a nutshell, this is the subject of “Byrne’s War.”
Dr. Byrne’s charges, if true, point to widespread corruption in Wall Street and in the SEC and the Depository Trust and Clearing Corporation (DTCC). This corruption that can defraud honest investors and even destroy some small companies.
You can read a brief summary of naked short selling but I would encourage you to watch and listen to a presentation on the dark side of Wall Street from Dr. Byrne himself at BusinessJive.com. It takes about an hour, but I think it’s worth it. After listening to his presentation (and looking at some pretty amazing case studies), I think we may have a real problem of criminal activity in Wall Street, aided by willing friends in the SEC. Also see TheSanityCheck.com for more info.
Speaking out on this issue has made Dr. Byrne a frequent target of wrath. But, as Byrne said, “I’m not doing this for approval. I think America is being ripped off. I just don’t know how I can walk away from that. I’m not programmed in a way that I can back out of this fight now.” Wish we had more citizens with that kind of spirit.
Byrne is not LDS, but he gets my “Captain Moroni Award” for valiant service against public corruption. Meanwhile, be careful on Wall Street.