Investing 101 - Aug 16, 2005 - Printable Version
- From Dateline to Overstock....The Plot Thickens
by Mark Faulk (Editor's note: Since I was out of town when Dateline finally aired their "expose'" on the stock market scandal, let's dispense of that little item first. It was the most irrelevant piece of fluff ever aired in the history of television. It would be the equivalent of spending a year putting together a documentary on the Watergate scandal, and then editing it down to a ten minute piece about Nixon's dog Checkers.
When we first broke the story about the Dateline expose' over a year ago, we asked if Dateline was losing credibility over the Stockgate story. Now we simply say: Credibility? What credibility? I asked readers to send me their thoughts on the show, and I'll post some of those emails in a couple of days, and then we'll bury Dateline in a shallow grave, where it will be easy for the wild animals to pick its dead carcass clean. It's amazing that the show was was able to stand erect for so many years, considering it (and everyone connected with it) have absolutely no spine. R.I.P.)
Now, down to business. For the past couple of months, I've been discussing the role of the Hedge funds in the stock counterfeiting scandal. I'm working on an article about them right now, but in the meantime, a lawsuit filed by Overstock.com against hedge fund Rocker Partners, an ensuing conference call by Overstock CEO Patrick Byrne, and a appearance by Byrne on CNBC's "Street Signs" with Ron Insana (the reporter who threw the fight in the Dateline segment just a few days earlier) did more to bring nationwide exposure to the stock market scandal in a couple of impromptu interviews than Dateline accomplished with hundreds of hours of interviews and a year and a half to put together their monumental non-event. As I said.....Dateline, R.I.P.
Then, earlier this evening, I received an email with this commentary attached, describing an interesting take on the Bryne conference call, where he made several veiled references to an individual who he says is fraudulently manipulating his company's stock, referring to him in Star Wars terminology as the "Sith Lord." The first website where this article was posted mysteriously disappeared, then it reappeared on another site. When I emailed the anonymous author to ask for permission to reprint it, the email was returned as undeliverable: "not a valid mailbox."
So, here goes.....I'm posting the opinion piece in its entirety, and if the original author wants to come forward and receive credit for it, or ask us to pull it, we'd love to hear from you. It makes sense to me, and he/she makes a great case for fingering Michael Milken as the "Sith Lord" referenced in Bryne's conference call.
Two other points: Byrne describes his villain as a "master criminal from the 80's" (when Milken was prosecuted and imprisoned for perpetuating massive stock market fraud), and a Businessweek article from 1999 describes Milken as a "a huge science-fiction fan who loves to make references to Star Trek and Star Wars in his speeches".
Is Michael Milken Patrick Bryne's "Sith Lord"? Decide for yourself.
Milken Back In The Stock Manipulation Game?
Michael Milken has fought a long and hard battle to cleanse his public image, and take on the appearance of a benefactor to the sick and the uneducated, an all around good guy and positive force in the world. Most people have bought the careful and expensive spin job. Hardly anyone remembers the 80 or so criminal counts brought against him by Giuliani, under RICO. Very few mentions about him going to Federal Prison for felonies are to be found. It would appear that history goes to those with the fattest wallets.
The message boards have been abuzz with speculation involving Mr. Milken, following a one hour conference call and presentation by Overstock.com CEO Patrick Bryne. In that call, he articulated an illegal stock manipulation scheme that was run by a "Master Mind", and which involved hedge funds, the media, influential investors, and private investigators Kroll Associates.
The Kroll connection got me thinking, as did the speculations that the Master Mind was a play on words, where the initials signaled the identity of the arch criminal directing the game. MM = Michael Milken. If that was the case, what corroborating evidence could be found to either destroy the idea, or support it?
In Den of Thieves, a book by James B. Stewart about the Drexel Junk Bond days, we get a glimpse of the seamy side of Wall Street and the evil that some men cheerfully do. in it, particularly, we get a connection made between two of the players in the Bryne piece: Jules Kroll, founder of Kroll, and Michael Milken. From the book: "They hired a private investigator, Jules Kroll, to unearth damaging information about Boesky. They portrayed Boesky as a liar who couldn't be trusted, and as a far greater criminal than the government had admitted." Kroll has since then been a speaker for the Milken Foundation, and is David Einhorn's neighbor.
Einhorn is mentioned repeatedly by Bryne, and so much so that it is worth commenting on the fact that his proximity to Kroll, his connection to Barron's (his wife was an editor there - Cheryl Strauss Einhorn), and his participation as a short seller in many of the companies targeted by Bryne's "cartel" is suspicious.
Bryne also claims that Kroll has him under investigation, and makes a compelling argument for that. He apparently went to their offices, and wanted to sign an NDA so that he could hire them - which they spent an hour dodging (they can't sign an NDA on someone they are investigating). If Kroll features in this, it would be another eyebrow raising issue given his history and association with Milken and Einhorn.
The second tier up from the Master Mind is a box marked "Bottom Feeder - Final Owner". This is the money guy with beneficial ownership of the sleazy hedge funds that engage in illegal activity, and supposedly directs the operations on a tactical level, with the Master Mind directing it on a strategic level. Bryne said, on his conference call, "Now, can I tell you who that designated bottom feeder was who was supposed to end up with our company? Can I tell you? I can." I can. Another fun play on words? I can. Icahn? Carl Icahn? The billionaire takeover specialist and corporate raider? If true, and Bryne's vision is correct, we have Carl Icahn acting as the money guy and tactical point, Milken acting as the Strategic thinker, and Kroll acting in much the same role as he did for Milken in the 80's - digging up dirt and doing corporate espionage on target companies.
Icahn was aided by Milken while Milken was at Drexel, and he assisted Icahn with several notable takeover financings, so that connection is solidly made.
Milken was involved is a very similar, highly involved and complex manipulation scheme when he was arrested and indicted in the 80's. From Riskglossary.com:
"The SEC and the US Attorney's office for Southern Manhattan conducted parallel investigations that soon extended beyond the immediate participants in Levine's ring. Abuses were widespread. There seemed to be an entire web of relationships among professionals exchanging information and other favors, including the parking of stock, the accumulation of stock to pressure firms' management, and stock price manipulation. Levine's ring provided investigators a point of entry to this web. Famous market participants were soon embroiled in the investigations, including investment banker Martin Siegel of Kidder Peabody, arbitrager Robert Freeman of Goldman Sachs, and arbitrager Ivan Boesky, who ran his own trading firm.
Inexorably, the investigations led to Milken. At the center of his junk bond universe, Milken was engaged is numerous abuses. He traded on and exchanged inside information gleaned from his junk bond underwriting. He was engaged in stock parking and colluded with Boesky and others to manipulate the stocks of takeover targets. He actively misled regulators."
What we have here is a template description for the abuses that Bryne discusses, updated for modern technology. Collusion, stock manipulation, insider trading and front running, "an entire web of relationships among professionals exchanging information and other favors"...Isn't that what Bryne described to a tee? A web of media, class action attorneys (Milberg Weiss being the most visible, having sued every major Rocker Partners short), cronies with pull at regulators, finance and trading assistance from the big brokerage firms, inter-related hedge funds, etc.
This is almost the exact same scheme.
So why does is the media silent about this, and why are our lawmakers and regulators absent? Why is there not a full scale criminal investigation underway to ascertain if there is any truth to Bryne's description of the manipulation ring?
In the original Milken case, Arthur Levine, a relatively minor figure in the scandal led to Boesky, who ultimately led to Milken - that scheme's Master Mind. Levine had a network of associates that traded on inside information using offshore accounts; again, exactly like what Bryne describes in his scenario.
There are far more similarities in Bryne's allegations than there are discrepancies with the original Milken scam ring, and it seems plausible that the same criminals, having gotten a wrist slap the first time, are back in business in a big way today. So much so, it is impossible not to believe that the DOJ, FBI and SEC absolutely must open investigations immediately.
All of these views are the opinions of the author.
This commentary was reprinted from: http://www.webspawner.com/users/milken1/index.html
Add your name to our Stockgate Activist mailing list on our homepage, and voice your opinion on our Stockgate forum on our new Message Board at http://www.faulkingtruth.com/ We will email you only when we have new articles or information dealing with this issue. Please link the articles everywhere you can, post them on stock message boards, and send them to the appropriate public entities. To enact positive change requires positive action.
Voice your opinion on our message board (you don't have to sign up to post), or post in our guestbook.
Investing 101 Archives:
Financial Terrorism in America (Mark Faulk, Mar 19, 2004)
Pump and Dump or Short and Distort? (Mark Faulk, Apr 18, 2004)
Response From Berliner Freiverkehr and The Berlin-Bremen Stock Exchange (The Faulking Truth, Jun 3, 2004)
The Berlin Connection? SEC and NASD to Meet With German Brokerage Firm Tomorrow (Mark Faulk, Jun 3, 2004)
Is Dateline Losing Credibility Over StockGate Story Delays? (Mark Faulk, Jun 11, 2004)
Who's Looking Out For You? SEC Critics Seeking Investigation (Mark Faulk, Jun 27, 2004)
He Said, She Said: SEC, NASD At Odds Over Status of Proposal (Mark Faulk, Aug 5, 2004)
The Berlin Connection: 250 Companies Out (And Counting) (Mark Faulk, Aug 30, 2004)
Jag Media Case Dismissed by Judge, Citing Filing Deficiencies (Dave Patch, Sep 9, 2004)
A Twelve Step Program to Clean up the OTC Stock Market (Mark Faulk, Sep 14, 2004)
Is Time Running Short in StockGate Scandal? (Mark Faulk, Oct 5, 2004)
Dateline: The Waiting is the Hardest Part (Mark Faulk, Nov 16, 2004)
Death of an Investment Class (Dave Patch, Dec 30, 2004)
Elgindy Trial Illustrates Incompetence at the Federal Levels (Dave Patch, Jan 4, 2005)
The Year of the Investor (Mark Faulk, Jan 5, 2005)
Regulation SHO’s Threshold Lists Leave More Questions than Answers (Dave Patch, Jan 11, 2005)
Feeding the Stock Market Beast (Mark Faulk, Jan 11, 2005)
Economic Corruption US Style (Joel S. Hirschhorn, Feb 27, 2005)
Stockgate Goes to Congress (Mark Faulk, Mar 10, 2005)
The Old Shell Game (Bob O'Brien, Mar 25, 2005)
FINALLY! Dateline to Air Stockgate Segment April 10th (Mark Faulk, Mar 28, 2005)
Dateline Stockgate Update: POSTPONED YET AGAIN! (Mark Faulk, Apr 6, 2005)
Time to Boycott GE, Dateline, and NBC? (Mark Faulk, Apr 6, 2005)
Pink Sheets CEO Calls for Reform in OTC Stock Market (Mark Faulk, May 2, 2005)
National Counterfeit Conspiracy Days, June 6th and 7th! (Mark Faulk, May 15, 2005)
Ninety-Four Trade Days and Counting (Dave Patch, May 25, 2005)
Stockgate: Turning up the Heat (Mark Faulk, May 31, 2005)
Stockgate: Donaldson out......Cox in (Mark Faulk, Jun 2, 2005)
SEC's Donaldson out, Cox in: One Step Forward, Two Steps Back (Mark Faulk, Jun 13, 2005)
President Bush’s Social Security Agenda - Steal your Money the Easy Way (Dave Patch, Jun 17, 2005)
Global Links Corp: The Real Story (Mark Faulk, Jun 26, 2005)
Forget SEC "Regulations".... This is Good Old-Fashioned Fraud (Mark Faulk, Jul 13, 2005)
Common Cause Joins Fight to "Stop Corporate Takeover of the SEC" (Mark Faulk, Jul 22, 2005)
Dateline Stockgate: We're on, we're off, we're on, we're off.....WE'RE ON AGAIN: July 31st!!! (Mark Faulk, Jul 25, 2005)
Dateline to Air Stockgate Segment in 2-Hour Show, Sunday, July 31st (Mark Faulk, Jul 29, 2005)
From Dateline to Overstock....The Plot Thickens (Mark Faulk, Aug 16, 2005)
Congress Sells America Short (Mark Faulk, Sep 20, 2005)
Stockgate: The Big Picture (Mark Faulk, Oct 10, 2005)
Stockgate: Rallying the Troops (Mark Faulk, Oct 16, 2005)
The $10.5 Billion REFCO Smoking Gun? (Bob O'Brien, Oct 23, 2005)
We Definitely Aren't in Kansas Anymore - Fraud Wall Street Style (Bob O'Brien, Nov 3, 2005)
Start Spreading the News: Stockgate Goes Nationwide (Mark Faulk, Nov 8, 2005)
Stockgate: "Can We Talk?" (Mark Faulk, Nov 27, 2005)
It's Money That Matters (Mark Faulk, Dec 11, 2005)
Regulation SHO; Results Leave Questions More than Answers (Dave Patch, Dec 29, 2005)
Faulking Truth Editor to Write CMKX Story (The Faulking Truth, Jan 5, 2006)
It Takes an Army (Mark Faulk, Jan 11, 2006)
The Circle of Greed: The Only Bull in this Stock Market is a Cash Cow (Mark Faulk, Jan 17, 2006)
A Silent Lynch Mob - An Open Letter From Rod Young (Rodney Young, Feb 2, 2006)
The Circle of Greed: A Voice in the Wilderness (Mark Faulk, Feb 13, 2006)
The Circle of Greed: Who Wants to be a Congressman? (Mark Faulk, Feb 26, 2006)
Freedom of the Press? (Mark Faulk, Mar 12, 2006)
The Parallel Universe of the DTCC: “Bits and bytes in book-entry form.” (Mark Faulk, Mar 24, 2006)
Finally...the Truth About Patrick Byrne (An open letter to Colin Kelly, Jr.) (Mark Faulk, Apr 19, 2006)
Faulking Truth recommends abolishing the SEC (Mark Faulk, Apr 27, 2006)
The Circle of Greed: The Cloak of Invisibility (Mark Faulk, May 25, 2006)
|
|
|