Carol Remond Received A Subpoena – It’s a Busy Day for SEC News
Location: BlogsBob O'Brien's Sanity Check Blog
Posted by: bobo 2/24/2006 5:34 PM
Well, it looks like all of our emails and complaints to the SEC may be paying some dividends:
I had another chat with Dr. Byrne today, and he told me that our good friend and award-winning journalist Carol Remond has received an SEC subpoena.
First Herb, now Carol.
The way he found out is interesting.
Apparently, today, a reporter from a large, “name” publication called and wanted his comments on the news that Carol, Herb, Rocker and Gradient had received subpoenas.
The tone of the interview was that it appeared that the SEC had picked up the ball and was now running down the field with it. I think everyone's a bit surprised by that. I know I am.
As an aside, Patrick has expressed to me his shock that they were moving, even though he told me that he’s made his affiants available to a number of law enforcement and regulatory bodies – at their request, not his. I think we just figured that a lot of that was for them to seem to be doing something – it’s not like they could read all the stories and do nothing – but that their appetites and hearts weren’t really in it. But now we are seeing that the lawsuit got everyone’s attention, and it triggered a systemic, “look into this and see if there’s anything to it” approach from a few groups – not just the SEC. So the folksy wisdom that companies should take a pummeling and do nothing clearly isn't such good form - even as he was taking incoming for suing the group that he was convinced was gaming his stock, the SEC and others were paying attention. Who knew?
Patrick’s feeling has always been that the states would be more aggressive, especially in light of the NASAA forum on naked short selling. So while the SEC news is a definite positive, he found it a little surprising – one might say that it has rekindled his faith in the Commission. He’s rocked a lot of boats over the last 6 months, and has been rather critical of the SEC’s performance, thrown his share of roundhouses at everyone and anyone, so my sense is that he thought that they might be more inclined to give him a proctology exam than the defendants. I believe that was the basis of the now infamous, “Dead body in the trunk” story. Looks like we might have been a bit harsh.
I’m not a betting man, but in past discussions I’ve opined that it would be the states, as well, so I’m equally surprised by this rash of subpoenas – call it a cautious optimism. I know that there’s been considerable outcry to the SEC to do something from NCANS members and other concerned advocacy groups – the Wall of Letters correspondence amply paints that picture – and my hunch is that they are getting dozens, if not hundreds, of complaints per week against the perceived “miscreants” in this story. Maybe all that heavy lifting paid off – it’s starting to look that way to me.
I think we all just sort of assumed that they would be the last to move. Again, I’m willing to give credit where it is due, and I don’t think that I’m alone in my surprise – that anyone expected them to not only come to Patrick and ask to speak to the affiants at length, but to actually then act in a decisive manner. Maybe we need to reconsider their performance – a friend of mine has told me before that it can take forever for the government to mobilize, but that once they do, they tend to come over the hill with guns blazing. It appears to me that is what they are doing here, and good for them, if that’s the case.
The states aren’t standing still, though – I also got word that 6 or 7 brokers received subpoenas over the last week from another agency/regulatory body, also in the OSTK case. This is in addition to the DTCC subpoenas broken here last week. If this is any indication, we can expect to see the same thing now happen in the Biovail case, as apparently the large, public lawsuits get everyone’s attention – and suddenly the priority become in going after the bad guys.
Whatever works.
So, to recap, the SEC looks like they were working behind the scenes to go after this, even as I was calling them a bunch of complacent dopes – sorry about that. Carol, Gradient, Herb, Rocker have gotten subpoenas. A bunch of brokers have gotten subpoenas. The states are mobilizing, the SEC is mobilizing, and they are taking this seriously – the fact that they are going after the journalists tells you they mean business. Patrick will probably have to fix his presentations so that they don’t basically say that the SEC isn’t doing their job, and I can’t use them as the universal whipping boy, at least not as much.
There’s always the DTCC for that.
I think that everyone involved on the good guy side is delighted that the concept of justice isn’t completely dead in our regulatory bodies. I know that many of you reading this have sent many complaints to the SEC and our elected officials - hell, I’ve encouraged you all to do so even when it looked as though it wasn’t having any effect. It looks like that got their attention. Everyone needs to give themselves a pat on the back on this, as it is proof that your actions as individuals do matter, and that collectively our voices raised as a chorus can get our government to take action.
That we can make it different this time. Which is clearly is.
Now let’s keep the pressure up. There’s work to do.
Copyright ©2006 Bob O'Brien
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By InTheKnow on 2/24/2006 5:50 PM
I love it. I love it. This made my day. Now one deserves this award better than she!
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By Mark on 2/24/2006 5:53 PM
Bobo
Tell Patrick to pull no punches whatsoever, take the whole damn crew to trial. I think now they know they screwed with the wrong guy.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By WickedWorld on 2/24/2006 5:57 PM
Herb just added to the story.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By bobo on 2/24/2006 5:59 PM
It's not just Patrick - it's all of us. There would be no investigation if we hadn't all been aggressive in emailing and writing our regulators and elected officials. This should be a wake up call that our efforts can make a difference. There is strength and power in numbers, and we just proved that.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By CMElec on 2/24/2006 6:01 PM
I hope the SEC is not getting involved to do damage control in this matter. There are powerful people involved in this criminally.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By jcline on 2/24/2006 6:03 PM
"I have no doubt...evil can be fought. I have no doubt... that indifference is NO OPTION" --Elie Wiesel
It has taken years...and a great deal of effort.... but the fortitude of a small group of committed citizens determined to make the wrongs right will prevail. Numbers are growing and we will prevail.
Thanks to all who have joined in this battle.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By sly6676 on 2/24/2006 6:06 PM
I'll be the happest when the WSJ/and JW get a subpoena.
Great work dirty, and all, I was a Boyscout and believed that truth prevails.
I was very worried.
Sly.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By captspell on 2/24/2006 6:08 PM
Bunny - Great article. It could not have happened to a more deserving person (CR). In my personal life, I take the position (for the most part) that people are as they present themselves to me. If they have done little or nothing in the past to earn my respect, they don't get it just because they do one seemingly "nice" thing. The SEC IMO has not been "walking the talk" for some time now right along with the DTCC. That they have now at this late date got off their collective asses is laudable to be sure but at this point it is too little too late. IMO the only reason they did get off their butts was because they were forced to by undenyable public opinion. Persons in power positions often take the view that they are above the law and can and do anything they damned welll please and screw the little guy if he is dumb enough to get screwed. He deserves what he gets. Because they are in power persons close to them want to share in that power also so they also will do and say anything they damned well please with a feeling of impunity. IN Texas and Oregon, we used to call this the California Two Step. An interesting dance to be sure. Its like a defanged rattlesnake with one tooth left. He is still a snake and will bite the crap out of you first chance he gets. The SEC/DTCC/wallstreet BD's IMO are just that, rattlesnakes with one tooth left at this point and I wouldn't trust them any further than I could throw them. Not for one second. Show me the facts and I will willingly change my mind. Until then...... burn me once shame on you. burn me twice shame on me and that ain't going to happen.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By financial_circus on 2/24/2006 6:15 PM
Bobo-Don't hold your breath. The SEC since it was formed has spent most of its time spinning its wheels looking for a way to pretend they are on top of things and taking care of the investor. Sure they will slap a few hands along the way. I hope I am wrong and this time that they will actually do something but I think their hands were forced to do something once a lawsuit was filed and the states started their attacks. TOO LITTLE TOO LATE. Just like the mutual fund timing scam that they knew existed for twenty years. The investors are still screwed and never get back all of their loses and the crooks get to keep most of their ill-gotten gains and walk free. Sorry to pee on the subpoena parade but I will wait for the outcome before dancing in the street. It will be a long road fought against financial giants and the outcome will not be known for years. If the SEC really wants to send a message they will start forcing buy-ins immediately(NOW) and protect the investors and companies from future damage. At least they would finally send the long awaited message that the reign of naked shorting is OVER! So what if they bankrupt a few crooks while doing that. There are millions of Americans that have been tremendously damaged over the years while the SEC sat on its butt. Those Americans were damaged not only through loses in their investments but also through the lose of jobs and pensions. It is way past due and I will watch closely and continue to demand that our worthless Congress start doing something as they are the ones who have truly failed the American Public in their obligations concerning this.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By cynabear on 2/24/2006 6:20 PM
call me cynical but the sec can issue a subpoena, ask for the wrong stuff and go "see nothing wrong here" and then poopeater can say See, I have been wrongly accused, perscuted and now I am vindicated!
we have a long way to go...
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By anon on 2/24/2006 6:23 PM
While my opinion of Herb, and not so severely Carol, is very low, I suspect they are being called in to sing, not to answer to charges against themselves.
Everyone does need to calm down. This isn't anywhere near justice. Yet. It appears to be a good start but many starts turn out to be nothing with the SEC, as many stock investors have learned the hard way when frivolous SEC inquiries spurred on by these short hedge funds tank the stocks they are short, then the inquiry goes no where.
Let's hope the same is not going to happen in reverse, keep calm, show some class, and keep the nose to the grindstone of justice.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By gregcable2002 on 2/24/2006 6:24 PM
It may have been a small number of citizens who started the movement to fix our markets but it's not anymore.We have grown into a strong political force and we number in the millions now.There are many who never post but watch and act accordingly as far as letting our elected officials know that we know whats going on.Thankyou to those that got it started.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By rpink on 2/24/2006 6:26 PM
with the number of fake SEC investigations on behalf of hedge funds out there I can not get excited by this round of "investigations". My bet at this point is that they will soon "leak" that no wrong doing was found.
I hope I am wrong.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By Wonder Boy on 2/24/2006 6:32 PM
I am not so ready to praise the SEC. They did SOMETHING, but they have a long row to hoe before I am convinced that they really are 'good guys'. Time and again they have defended Wall Street, the crooks, the DTCC, etc. I don't mean to rain on the parade and I will keep my fingers crossed, but I have never seen a leopard change his spots.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By financial_circus on 2/24/2006 6:34 PM
Herb states the SEC has ALREADY BACKED OFF FROM THE SUBPOENA! Great job SEC!
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By gregcable2002 on 2/24/2006 6:35 PM
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by: libabtinv85 02/24/06 09:29 pm
Msg: 68958 of 68958
SEC Probes Overstock's Claim
Of Stock-Market Manipulation
By KARA SCANNELL
February 25, 2006
A battle between an Internet discount retailer and a stock-research firm has attracted the attention of the Securities and Exchange Commission, which is investigating allegations of market manipulation.
With hedge funds acquiring more clout in their ability to move stocks, some companies are fighting back, accusing short-sellers of using tactics such as manipulated or false research to drive down the price of stocks. One battle -- and one that has piqued the SEC's interest -- involves accusations by Overstock.com Inc. that Gradient Analytics Inc., a stock-research firm in Scottsdale, Ariz., negatively adjusted its research at the request of a hedge fund betting against the stock.
Overstock.com is an online closeout retailer, offering a variety of discount, brand-name merchandise, ranging from furniture to jewelry and electronics. Its stock has been on a roller-coaster since it went public in 2002, trading at more than $75 a share in December 2004. At 4 p.m. trading Friday on the Nasdaq Stock Market, the stock was down 87 cents, or 3.6%, to $23.40.
As part of the inquiry, the SEC has taken the unusual step of subpoenaing two journalists from Dow Jones & Co., the publisher of The Wall Street Journal, asking for any communications between the reporters and Gradient or Rocker Partners, a hedge fund run by David Rocker, a well-known short-seller.
The subpoena, dated Feb. 7, seeks emails, phone records and other materials provided by employees of Gradient or Rocker to Carol S. Remond, a columnist for Dow Jones Newswires, or Herb Greenberg, a columnist for MarketWatch, an online financial publication owned by Dow Jones. Both Ms. Remond and Mr. Greenberg have written about Overstock.com. In a column published yesterday, Mr. Greenberg said he doesn't plan to be "bullied into changing the way I do anything."
"We were served with the subpoenas and we have served objections in response. It's our understanding that the SEC has decided not to seek production of any documents from Dow Jones at this time," said Amy Wolfcale, a spokeswoman for Dow Jones. "The SEC may come back in the future."
John Nester, an SEC spokesman in Washington, said, "Under longstanding practice, the SEC generally subpoenas journalists only when it's absolutely necessary and after careful thought and consideration." Karen Hinton, a spokeswoman for Gradient, said the firm doesn't comment on regulators' communications but cooperates fully with any information requests. Mr. Rocker said he doesn't comment on legal matters. Both firms have previously denied any wrongdoing.
Lawyers say they don't know of any cases where the SEC has tried to subpoena journalists to get information to help make a civil securities suit. The subpoena was issued by the SEC's San Francisco office.
Overstock filed a lawsuit in a California state court in August alleging Gradient and Rocker Partners, of Millburn, N.J., were part of an effort to drive down its stock. Patrick Byrne, Overstock president, said he hasn't received a subpoena and has been cooperating with federal and state authorities. "We have boxes and boxes of evidence as well as witnesses and such that we have made available," he said.
Gradient was formed in 1996 and was previously known as Camelback Research Alliance. The firm's Web site describes one of its products as an "innovative forensic accounting service that enhances the investment and portfolio decision making of quantitative and qualitative portfolio managers" and others.
--Joe Hagan contributed to this article.
Write to Kara Scannell at kara.scannell@wsj.com
Posted as a reply to: Msg 68956 by cinemo2001
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By InTheKnow on 2/24/2006 6:35 PM
Don't let us forget:
SETTLE THE TRADES or SETTLE IN JAIL!
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By rpink on 2/24/2006 6:35 PM
what just happened? Herb is now talking about how the SEC has decided not to request his records of contacts...who bought off who...this is not good! Check the story at the yahoo ostk.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By Admiral Ackbar on 2/24/2006 6:37 PM
Im still keeping the letters and calls going at the state level. I haven't let up by a long shot. We need a more unified voice than just Utah and Connecticut.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By Wonder Boy on 2/24/2006 6:39 PM
From Herbie at Marketwatch---<>
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By jersey_devil on 2/24/2006 6:40 PM
Herb says "Thanks SEC. Without you my office would have never been so clean. My desk and files have never been cleaner(I did have to hire a plumber to unclog that toilet from all the papers I flushed) but I am sending Patrick the bill!"
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By Dollarone2 on 2/24/2006 6:46 PM
C Remond got what she needed. Now we all need the SEC to take some corrective measures. Dont hold your breath.
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Re: Carol Remond Received A Subpoena – It’s a Busy Day for SEC News By J on 2/24/2006 6:49 PM
This just made my night.
Here's to schadenfraude!
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