SEC corruption

[cfoofme]

Well if a company suspects illegal trading of its stock, it will not get any help from SEC. Looks like company will have to investigate by itself.

By Bob Mims
The Salt Lake Tribune
Article Last Updated: 02/15/2007 11:19:32 PM MST

Overstock.com CEO Patrick Byrne can forget about the Securities and Exchange Commission signing on to his crusade to expose alleged market manipulation.
Concluding a 16-month investigation, the SEC says it will take no action against the target of the probe, Gradient Analytics. The Scottsdale, Ariz., market research firm had been accused by Byrne of colluding with the New York Rocker Partners hedge fund to drive down Overstock share prices.
Although the SEC refused to confirm its decision, Gradient on Thursday made public a letter from the agency stating that the investigation had been closed without any enforcement actions recommended.
"We cooperated fully with the SEC to demonstrate that we have nothing to hide," said Gradient President and CEO Brad Forst. "This decision confirms our resolve . . . to publish true and insightful information, in spite of the efforts of others to deflect attention from their own bad news and questionable business models."
Byrne, whose Salt Lake City online closeout retailer ended fiscal 2006 $97 million in the red, said he was not surprised by the SEC's move. But he added that if the agency cannot find evidence to act, he and his lawyers will.
"We look forward to conducting our own investigation when we get discovery," he said Thursday, referring to Overstock's separate lawsuits alleging market manipulation against
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Gradient and Rocker and a host of leading brokerages.
Last week, Overstock fired off a litigious broadside at Morgan Stanley, Goldman Sachs and several other big-name investment firms seeking $3.48 billion in damages related to purported "naked shorting" of the online retailer's stock. Morgan Stanley and Goldman Sachs have declined to comment on the lawsuit and the SEC decision, but financial analysts have criticized Overstock's actions.
Traditional short sellers borrow stock through a broker and hope to profit by selling shares high and later buying them back at lower prices to repay the loan. In naked short selling, traders who try to profit from falling prices sell shares without borrowing stock. Using that strategy, naked short sellers can drive down prices by flooding the market with orders to sell shares they don't have.
Overstock and others - Canada's Biovail Corp. also is suing Gradient - complain the action is not only illegal, but results in artificially lower prices.
Overstock also has an active suit specifically against Gradient, claiming the research firm timed negative coverage of the company with client Rocker's buying and selling of Overstock shares.
Byrne and Biovail dismissed the impact of the SEC's decision. The Toronto-based pharmaceutical manufacturer insisted it "remains confident in the merit of its allegations and of the ultimate success of its claims."

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