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Revision as of 12:11, 8 May 2016 view source2600:1017:b40d:ad08:84c1:14eb:86a0:608 (talk) →Defamation lawsuit: better sourceTag: possible BLP issue or vandalism← Previous edit Revision as of 12:51, 8 May 2016 view source Christofurio (talk | contribs)Extended confirmed users5,158 edits →Libel suitNext edit →
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==Libel suit== ==Libel suit==
In October 2011, a ] businessman, Altaf Nazerali, sued Byrne for libel for an article in Byrne's "Deep Capture" conspiracy theory website. The article described Nazerali as being in cahoots with “Osama Bin Laden’s favorite financier,” and that he worked with criminal syndicates including the Colombian drug cartel, the Russian mafia, and various “jihadi terrorist groups” including al Qaeda’s Golden Chain. Deep Capture also accused Nazerali of “delivering weapons to war zones in Africa and to the mujahedeen in Afghanistan,” of orchestrating “small-time ‘pump and dump’ scams… bust-outs, death spiral finance and naked short selling,” and of carrying out dirty work for “a Pakistani ISIS asset” who “works for the Iranian regime.” <ref>{{Cite web|url=http://www.thedailybeast.com/articles/2015/11/28/the-gold-hoarding-ceo-who-wants-to-be-governor.html|title=The Province|last=Nestel|first=M.L.|date=|website=|publisher=|access-date=}}</ref> In May 2016, the court found that thw charges in the article were spurious and Nazerali $1.2 million in danages, including $500,000 in aggravated damages, $250,000 in punitive damages and $55,000 in special damages. Byrne was also permanently banned from publishing the accusations on the Internet or elsewhere. The court found that Byrne, Deep Capture and his employee Mark Mitchell "engaged in a calculated an ruthless campaign to inflict as much damage on Mr. Nazerali’s reputation as they could achieve." The 102-page decision said “It is clear on the evidence that their intention was to conduct a vendetta in which the truth about Mr. Nazerali himself was of no consequence."<ref>{{Cite web|url=http://vancouversun.com/news/local-news/vancouver-businessman-wins-1-2-million-for-internet-libel|title=Vancouver businessman wins $1.2 million for Internet libel|date=2016-05-07|website=Vancouver Sun|language=en-US|access-date=2016-05-07}}</ref> In October 2011, a ] businessman, Altaf Nazerali, sued Byrne for libel for an article in Byrne's "Deep Capture" conspiracy theory website. The article described Nazerali as being in cahoots with “Osama Bin Laden’s favorite financier,” and that he worked with criminal syndicates including the Colombian drug cartel, the Russian mafia, and various “jihadi terrorist groups” including al Qaeda’s Golden Chain. Deep Capture also accused Nazerali of “delivering weapons to war zones in Africa and to the mujahedeen in Afghanistan,” of orchestrating “small-time ‘pump and dump’ scams… bust-outs, death spiral finance and naked short selling,” and of carrying out dirty work for “a Pakistani ISIS asset” who “works for the Iranian regime.” <ref>{{Cite web|url=http://www.thedailybeast.com/articles/2015/11/28/the-gold-hoarding-ceo-who-wants-to-be-governor.html|title=The Province|last=Nestel|first=M.L.|date=|website=|publisher=|access-date=}}</ref> In May 2016, the court found that the charges in the article were spurious.
In response to the defense of truth, the court said, "The defendants did not attempt to prove the truth of many of the defamatory words out of the mouth of the plaintiff, nor through documents, nor through other witnesses of which there were none. Defendants who take on the onerous burden of proving that defamatory words are justified, but who offer no evidence of their own, must prove the truth of the words using the plaintiff's evidence. That was not done."
In response to the defense of fair comment, the court said, "To be fair comment, published words must first be recognizable as comment, not statements of fact. The published words alleged in paragraph 12 of the amended notice of civil claim allege facts. They are not comment. The defence of fair comment is not open tot he Deep Capture defendants for that reason alone."
The defendants' pleadings had also evoked an argument that the plaintiff had consented to be libeled. They employed the Latin phrase "volenti non fit injuria." (To a willing party, no injury is done.) The judge devoted one sentence to this: "The volenti non fit injuria pleading of the Deep Capture defendants wisely was not pressed in argument."
As to damages, the court awarded Nazerali $1.2 million, including $500,000 in aggravated damages, $250,000 in punitive damages and $55,000 in special damages. Byrne was also permanently banned from publishing the accusations on the Internet or elsewhere. The court found that Byrne, Deep Capture and his employee Mark Mitchell "engaged in a calculated an ruthless campaign to inflict as much damage on Mr. Nazerali’s reputation as they could achieve." The 102-page decision said “It is clear on the evidence that their intention was to conduct a vendetta in which the truth about Mr. Nazerali himself was of no consequence."<ref>{{Cite web|url=http://vancouversun.com/news/local-news/vancouver-businessman-wins-1-2-million-for-internet-libel|title=Vancouver businessman wins $1.2 million for Internet libel|date=2016-05-07|website=Vancouver Sun|language=en-US|access-date=2016-05-07}}</ref>


==Awards and media attention== ==Awards and media attention==

Revision as of 12:51, 8 May 2016

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Patrick M. Byrne
BornPatrick Michael Byrne
1962 (age 61–62)
Fort Wayne, Indiana, U.S.
NationalityAmerican
Alma materDartmouth College, B.A. Philosophy, Asian Studies
Cambridge University, M.A. Mathematical Logic
Stanford University, Ph.D Philosophy
Occupation(s)CEO and Chairman,
Overstock.com
Chairman,
Friedman Foundation
Investigative Journalist, Deepcapture.com
AwardsEntrepreneur of the Year
Websitehttp://www.deepcapture.com

Patrick M. Byrne (born 1962, Fort Wayne, Indiana,) is an American entrepreneur, e-commerce pioneer and CEO of Overstock.com. In 1999, Byrne launched Overstock. He had previously served shorter terms leading two smaller companies, including one owned by Warren Buffett's Berkshire Hathaway.

In 2002, Byrne took Overstock.com public. Since the initial public offering, the company has since increased its revenue to nearly $2 billion a year, and achieved full profitability in 2009.

Beginning in 2005, Byrne become known for his campaign against illegal naked short selling. Byrne and securities regulators maintain illegal naked shorting has been used in violation of securities law to hurt the price of his and other public companies' stock. Under his direction, Overstock.com has filed two lawsuits alleging improper acts by Wall Street firms, a hedge fund, and an independent research firm. In each case the defendants have settled with Overstock out of court.

More recently, Byrne has advocated for cryptocurrencies such as bitcoin. In January 2014, Overstock.com became the first major online retailer to accept bitcoin.

Background

Patrick Byrne is the son of John J. Byrne, former chairman of Berkshire Hathaway's GEICO insurance subsidiary and White Mountains Insurance Group. He holds a certificate from Beijing Normal University, has a Bachelor of Arts degree in Chinese studies from Dartmouth College, a master's degree from Cambridge University as a Marshall Scholar, and a Ph.D. in philosophy from Stanford University.

Byrne was a teaching fellow at Stanford University from 1989 to 1991 and was manager of Blackhawk Investment Co. and Elissar, Inc. He served as chairman, president and CEO of Centricut, LLC, a manufacturer of industrial torches, then held the same three positions at Fechheimer Brothers, Inc., a Berkshire Hathaway company manufacturing police, firefighter, and military uniforms.

Byrne has a black belt in tae kwon do, and once pursued a career in professional boxing. He is a cancer survivor, and has ridden a bicycle across the country to raise awareness and money for cancer research at the Dana Farber Cancer Institute. Byrne has also supported implementing school vouchers and other educational reforms. Byrne was the largest donor to political causes in Utah during 2003–2006, while his father was the third-largest.

Overstock.com

Main article: Overstock.com

In 1999, Byrne was approached by the founder of D2-Discounts Direct with a request for operating capital. The company had generated slightly more than $500,000 in revenue the previous year by liquidating excess inventory online. Byrne found the idea of online closeouts intriguing, and invested $7 million for a 60 percent equity stake in the company in the spring of 1999. In September the same year he took over as CEO, and the following month the company was renamed Overstock.com.

Worldstock

During a vacation in Southeast Asia Byrne found that many village artisans were held back by the lack of retail channels, as their production was fragmented and the quantities produced were small. He decided that the Overstock model was perfectly suited for their needs. So in 2001 he set up the Worldstock division of Overstock. Worldstock searches through villages all over the world for people capable of producing quality products; by 2006 there were approximately 6,000 producers contributing. On average, about 70 percent of the retail price on all Worldstock items sold goes directly to the artist.

"Dutch Auction" IPO

Byrne initiated a Dutch auction IPO of Overstock.com in 2002. The company was one of the first to go public under a system advanced by WR Hambrecht + Co to retain a greater share of capital within the company rather than going to the investment bank underwriters used in conventional public offerings. Byrne has said that competing banks reacted against this, attempting to obstruct the success of the offering through negative reports and by shorting the company's stock. When Google later in 2004 went public via a Dutch auction IPO, Byrne commented that Wall Street firms similarly pushed negative stories, but did not keep it from going forward successfully. Four years after the OpenIPO, one official of Hambrecht, its now former co-CEO Clay Corbus was added to Overstock's board of directors.

Campaign against naked shorting and analysts

In a conference call with analysts in August 2005, Byrne said that "there's been a plan since we were in our teens to destroy our stock, drive it down to $6–$10 ... and even a plan for how the company would then get whacked up." He said that the conspirators were part of a "Miscreants Ball," headed by a "Sith Lord," who he refused to identify but said "he's one of the master criminals from the 1980s." Byrne said the conspiracy included hedge funds, journalists, investigators, trial lawyers, the SEC, and Eliot Spitzer. Fortune writer Bethany McLean said that Byrne had become a "hero to those who believe that short-sellers are the operators of Wall Street's ultimate black box, predators who destroy companies through innuendo, bullying, political connections—and sometimes through an illegal practice known as 'naked shorting.'" Byrne financed and largely wrote a full-page advertisement in the Washington Post which said "Naked short-selling ... is literally stealing money from the widows, retirees, and other small investors." In a letter to the Wall Street Journal in April 2006, Byrne contended that "blackguards have practiced 'failure to deliver'" of securities, were "destroying businesses and (probably) destabilizing our capital markets." Since 2005, Overstock has filed two lawsuits relating to the matters under Byrne's direction.

In the first lawsuit, filed 2005, Overstock.com filed suit against hedge fund Rocker Partners and the equities research firm, Gradient Analytics (formerly Camelback Research Alliance), saying they illegally colluded in short-selling the company while paying for negative reports to drive down share prices. The defendant (i.e. Gradient Analytics et al.) moved to have the case dismissed, however the California court ruled in August 2006 that the suit should be allowed to proceed. Gradient filed a counter-complaint against Byrne for libel. A portion of this suit was settled out of court on October 13, 2008, when Overstock.com and Gradient dropped the claims against each other after Gradient retracted allegations that Overstock's reporting methods did not comply with rules established by the FASB, stated they believed Overstock.com complied with GAAP standards, and that three directors were independent, and apologized. In December 2009, the suit against Rocker, whose name had since been changed to Copper River Partners, was settled by Copper River paying $5 million, payment of which Byrne stated he received on December 9, 2009.

Overstock.com filed a second lawsuit in 2007 against a number of large investment banks relating directly to alleged illegal naked short selling. All parties have settled with Overstock except for Merrill Lynch.

Byrne's campaign against naked short selling and others who he feels have targeted him and his company has attracted controversy, though after the crisis in the North American markets in 2008, Byrne received positive press. A Salt Lake Tribune article reported that "These days, when people talk of Byrne, the word 'vindication' comes up a lot."

Libel suit

In October 2011, a Vancouver businessman, Altaf Nazerali, sued Byrne for libel for an article in Byrne's "Deep Capture" conspiracy theory website. The article described Nazerali as being in cahoots with “Osama Bin Laden’s favorite financier,” and that he worked with criminal syndicates including the Colombian drug cartel, the Russian mafia, and various “jihadi terrorist groups” including al Qaeda’s Golden Chain. Deep Capture also accused Nazerali of “delivering weapons to war zones in Africa and to the mujahedeen in Afghanistan,” of orchestrating “small-time ‘pump and dump’ scams… bust-outs, death spiral finance and naked short selling,” and of carrying out dirty work for “a Pakistani ISIS asset” who “works for the Iranian regime.” In May 2016, the court found that the charges in the article were spurious.

In response to the defense of truth, the court said, "The defendants did not attempt to prove the truth of many of the defamatory words out of the mouth of the plaintiff, nor through documents, nor through other witnesses of which there were none. Defendants who take on the onerous burden of proving that defamatory words are justified, but who offer no evidence of their own, must prove the truth of the words using the plaintiff's evidence. That was not done."

In response to the defense of fair comment, the court said, "To be fair comment, published words must first be recognizable as comment, not statements of fact. The published words alleged in paragraph 12 of the amended notice of civil claim allege facts. They are not comment. The defence of fair comment is not open tot he Deep Capture defendants for that reason alone."

The defendants' pleadings had also evoked an argument that the plaintiff had consented to be libeled. They employed the Latin phrase "volenti non fit injuria." (To a willing party, no injury is done.) The judge devoted one sentence to this: "The volenti non fit injuria pleading of the Deep Capture defendants wisely was not pressed in argument."

As to damages, the court awarded Nazerali $1.2 million, including $500,000 in aggravated damages, $250,000 in punitive damages and $55,000 in special damages. Byrne was also permanently banned from publishing the accusations on the Internet or elsewhere. The court found that Byrne, Deep Capture and his employee Mark Mitchell "engaged in a calculated an ruthless campaign to inflict as much damage on Mr. Nazerali’s reputation as they could achieve." The 102-page decision said “It is clear on the evidence that their intention was to conduct a vendetta in which the truth about Mr. Nazerali himself was of no consequence."

Awards and media attention

Since Byrne launched Overstock.com in 1999, he and his company have garnered attention from numerous national media outlets in addition to its coverage of his campaign against naked shorting. Among them are the Wall Street Journal, ABC News with Peter Jennings, Fortune, CBS Marketwatch, and BusinessWeek, among others. He has also appeared on Bloomberg TV, CNBC, and Fox News shows such as Your World with Neil Cavuto. In 2002, Byrne was named to BusinessWeek’s list of the 25 most influential people in e-Business in 2002: the magazine cited survival strength and vision as qualities that qualified Byrne for the list. and Ernst & Young awarded Byrne the "2002 Milestone Award Winner Utah Region." Also in 2003 Overstock came no.1 in MountainWest Capital Network (MWCN) Utah100 award for the fastest growing company in Utah. Fastest Growing category are based on percentage revenue increases in the five preceding years. Byrne also won the first-ever Utah Best of State Awards for Community Development in 2003.

Education lobbying

In 2005, Byrne provided financial backing to form the advocacy group Class Education, whose goal is to change state laws to require schools to spend at least 65 percent of their operating budgets on classroom expenses. Proponents of the standard contend that it would free up money to increase teachers' salaries without requiring tax increases. Critics say that many services deemed "non-classroom" are necessary for education, including librarians, school nurses, guidance counselors, food service workers and school bus drivers.

Byrne also serves as co-chair (with Rose Friedman) for The Friedman Foundation for Educational Choice. The non-profit organization was founded by Milton and Rose Friedman and promotes school vouchers and other forms of school choice.

Byrne and his family contributed most of the funds in support of House Bill 148 in Utah, a bill that would allow the state to provide funding vouchers for students who decide to leave public schools for private schools. In January 2008, it was reported that Byrne and his parents contributed about $4 million to the pro-voucher campaign, or three-quarters of its $5.4 million funding. Opponents of vouchers, funded mostly by the teacher unions, spent $4 million; approximately $3 million came from the National Education Association. When that bill was defeated in a statewide referendum (62% opposing vs. 38% favoring), the Salt Lake Tribune reported that Byrne "called the referendum a 'statewide IQ test' that Utahns failed." He said, "They don't care enough about their kids. They care an awful lot about this system, this bureaucracy, but they don't care enough about their kids to think outside the box."

Byrne criticized Utah governor Jon Huntsman for not sufficiently supporting the voucher campaign. According to Byrne, Huntsman had before he was elected stated that he was "going to be the voucher governor," and Byrne had donated $75,000 to Huntsman's campaign for governor in 2004. However, to Byrne's disappointment, the moment Huntsman was elected he went missing from the debate, and Byrne told the Associated Press that he would now bankroll anyone who could defeat Huntsman at the polls, "even a communist".

References

  1. Riding on a Raft: Patrick Byrne and Overstock.com, by Duan, Jason, Bachelor, John A III. Journal of Applied Management and Entrepreneurship, January 2006
  2. 05/AR2010040502098.html Overstock's brash CEO delivers 1st annual profit, by Paul Foy, April 5, 2010, The Washington Post
  3. "A Boxer and Drug Baron's Unlikely Alliance", The Globe and Mail, March 2, 2006
  4. Overstock.com Inc. Annual report on Form 10-K, Legal Proceedings, 2007
  5. "Meet Patrick Byrne: Bitcoin Messiah, CEO of Overstock, Scourge of Wall Street". Wired.com. 2014. Retrieved 2015-10-06.
  6. http://www.coindesk.com/overstock-opens-bitcoin-sales/
  7. ^ "Patrick Byrne: Off-Price Power," Business Week, Oct. 1, 2002
  8. Patrick Byrne biography, Forbes.com
  9. Interview with Byrne on NPR July 4, 2003
  10. ^ Riding on a Raft: Patrick Byrne and Overstock.com, by Duan, Jason; Bachelor, John A III. Journal of Applied Management and Entrepreneurship, Jan 2006
  11. Handful give lots of $$, by Lee Davidson and Bob Bernick Jr., May 22, 2006, Deseret Morning News
  12. Overstock.com, Inc. by Jeffrey Covell, in International Directory of Company Histories, Volume 75 (2004)
  13. The Renaissance Man of E-Commerce Patrick Byrne has done more in his 37 years than most do in a lifetime. Will that make his company, Overstock.com, a success? by Nicholas Stein, February 7, 2000, Fortune
  14. Overstock.com, Press Release, 2002
  15. The Worldstock Story
  16. Byrne’s War Overstock.com’s Patrick Byrne is On a Self-imposed Mission to Save Main Street from Wall Street, by Colin Kelly Jr., 4.18.2006
  17. Overstocking in Afghanistan, by Johanna Glasner, 06.25.04, Wired
  18. “IPO Dutch Auctions Vs. Traditional Allocation,” Forbes, May 10, 2004
  19. Google Not the First to Go Dutch,” by Jerry Knight, The Washington Post, Aug. 23, 2004
  20. “Overstock.com elects Clay Corbus, Hambrecht`s co-CEO, to its board,” Internet Retailer, March 12, 2007
  21. "The Phantom Menace," by Bethany McLean, Fortune Magazine, Nov. 15, 2005
  22. Patrick Byrne letter to Wall Street Journal, April 21, 2006
  23. CNET interview with Byrne March 6, 2006
  24. Overstock CEO reflects on Cramer debacle March 28, 2007
  25. Overstock.Com versus Gradient Analytics et al.
  26. Ruling, Superior Court; Overstock.Com versus Gradient Analytics et al.
  27. "US Research firm countersues retailer Overstock.com," http://www.reuters.com/article/marketsNews/idUSN1544393520080415
  28. Sage, Alexandria (2008-10-13). "Overstock says settled claims against Gradient". Business & Finance. Reuters. Retrieved 2008-10-17. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  29. Beebe, Paul (2008-10-13). "Overstock.com settles suit with research firm". The Salt Lake Tribune. Retrieved 2008-10-17.
  30. "Overstock says it settles with hedge fund". Reuters. 2008-12-08. Retrieved 2009-12-09. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  31. Metz, Cade, "Overstock's Byrne claims $5m scalp over short selling: A new look for Miscreants' Ball", The Register, December 9, 2009.
  32. Overstock sues brokers Feb. 3, 2007
  33. http://finance.yahoo.com/news/goldman-sachs-settles-jersey-rico-164554990.html
  34. https://web.archive.org/web/20071116151827/http://news.moneycentral.msn.com:80/provider/providerarticle.aspx?feed=BCOM&date=20070920&id=7504405. Archived from the original on November 16, 2007. Retrieved March 19, 2008. {{cite web}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  35. Steven Oberbeck, Salt Lake Tribune Saturday, August 2, 2008. Also Naked shorting's early critic starts to see some vindication
  36. Nestel, M.L. "The Province".
  37. "Vancouver businessman wins $1.2 million for Internet libel". Vancouver Sun. 2016-05-07. Retrieved 2016-05-07.
  38. businessweek.com/magazine/content/02_39/ b3801162.htm The e.biz 25: Staying Power?, September 30, 2002, BusinessWeek
  39. SearchHallofFame.aspx Ernst & Young Entrepreneur of the Year, Hall of Fame
  40. MountainWest Capital Network
  41. Best of State premiere is a winner, by Jake Parkinson, Jun 23, 2003, Deseret News (Salt Lake City),
  42. Teaching Schools How to Spend By Matthew Cooper Jun. 20, 2005, Time magazine
  43. "Here's an Idea: Put 65% of the Money Into Classrooms," New York Times, Jan. 4, 2006
  44. "'65 cent solution' takes on ed establishment," Stateline.org, October 28, 2005
  45. Friedman Foundation Board of Directors
  46. The Salt Lake Tribune November 1, 2007
  47. "Financing Voucher Fight," Deseret News, November 1, 2007
  48. "Voucher battle costs both sides total of $9.3M," Salt Lake Tribune, Jan. 8, 2008,
  49. Voters dislike vouchers
  50. Vouchers go down in crushing defeat, The Salt Lake Tribune, November 7, 2007
  51. "Overstock chief blasts Huntsman over vouchers," the Associated Press, Nov. 8, 2007

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