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It seems inevitable in this little exercise in the macabre that anyone operating under a veil of anonymity will soon have his or her identity sought after.  And so, as you can see from the comments, it has begun here.  I’m really not sure what, if anything I plan to do about it, but I do believe it will be an entirely useless clue to my identity when I admit to having crossed swords, so to speak, with the subject of this week’s section.

Meet David Patch, self-styled evangelist of the gospel of the anti-naked shorting movement.  His primary accomplishment, as far as I can tell, is getting himself banned from more blogs and message board websites than any other individual I am aware of.  He almost seems to make it a goal to get banned, in order to be able to tie the blogger/admin in to the grand conspiracy against him.

He does this by effectively “taking over” a discussion, and driving it in the direction he wants it to go, irrespective of what anyone else was or wanted to talk about.  And if the person in charge tries to tolerate him, he’ll just ramp things up until he finds the breaking point and wins himself a one-way ticket out of that forum.

Mind you, it’s been a while since he has (to my knowledge) pulled that off, so either he’s gone away or found a place where his “style” is actually appreciated.  Either way, I don’t necessarily anticipate him showing up here.

Anyway, the gist of this week’s relatively short tale is of how Dave Patch found the “smoking gun” via a Freedom of Information Act request, that “proved” that shares of Overstock.com were being sold and never delivered.

I put “proved” in quotes because his actual reasoning has always been scattershot at best and at some times just plain absurd.  At one point, for example, he thought the figures provided were cumulative, meaning each day’s total represented brand new “phantom shares” being created.  After being disabused of that, he charted the data and picked out a segment that “proved” that delivery failures were on an uptrend, even though the data he excluded showed that the levels had been substantially higher in earlier months.  And all the while, the data does nothing to indicate whether these are the “same” shares being undelivered for weeks on end, or a transient condition where delivery get backlogged but fulfilled in due course.  No points for guessing which of these options Patch has arbitrarily decided must be the case.

Meanwhile, OSTK has been off and on the Reg SHO list of companies with significant failures to deliver, and as of this writing is currently off it.  Yet the lack of “phantom shares”, as Mitchell keeps calling them, has failed to return the stock to anywhere near its highs of a little less than four years ago.

It’s probably coincidence that at the same time the current leadership of the SEC has decided to “take seriously” the complaints of David Patch and others, that the markets have plunged into what some pundits call their gravest crisis since the Great Depression.*

Still, it was probably an inopportune time for him to be taking over the discussion there.

It’s something of a darkly humourous irony that as Patch, Byrne and others of their mindset are trying today to take credit for something or other, nobody else has any time for them.  I guess they’ll just have to settle for being prophets in their own minds.

Next week, Patrick Byrne and his impression of a moth.

(* Mind you, other pundits are a little less on the panicky side, so all I can advise is to go with whomever you decide to trust.)

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28 Comments

  1. You wrote:

    “It seems inevitable in this little exercise in the macabre that anyone operating under a veil of anonymity will soon have his or her identity sought after.”

    Question:

    Are you a Yale Alumni?

    Reason for question:

    According to this comment by Dave Patch on Deep Capture:

    Patchie Says:
    September 30th, 2008 at 10:00 am
    Prof. Bris has direct ties to Yale University.

    James Chanos has direct ties to Yale University.

    Prof. Bris was nobody until he came out on his report regarding the mandatory pre-borrow Emergency Order in July. The WSJ and NY Times picked up his comments and ran with it – now he is suddenly a somebody.

    The WSJ has published 3 opinion letters on short selling in the past months – such letters were originated by Prof. Bris and James Chanos. All letters have the exact same underlying rationalizations and conclusions. The NY Times ran all opinion letters through their blog.

    Are we seeing a pattern here? If Bris is this short sale expert, where has he been these past few years? We certainly never heard his name amongst all those economists that were spouting opinion on teh short sale issues. Is it coincidence that Yale lost Chanos mouthpiece Owen Lamont to a short sale hedge fund and suddenly a new Yale pundit appears in Prof. Bris?

    Kindest regards,

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

  2. One more question:

    Did you have an account and WAMU?

    According to that nut job Dave Patch:

    Patchie Says:
    September 26th, 2008 at 9:43 am

    “You can only wonder whether those withdrawing their funds were also shorting the hell out of the stock as they did so. Clearly there is a pattern we have seen many times before – as a stock starts to fall the shares trading that create the fall don’t seem capable of settling.”

  3. Correction:

    Did you have an account at WAMU?

    Sorry for the typo.

    • underbond
    • Posted October 1, 2008 at 12:03 pm
    • Permalink

    > Are you a Yale Alumni?

    No, but I think my front door is, at least that’s what it says on the handle.

    > Did you have an account at WAMU?

    I have a second cousin at TAMU, is that close enough? (Gig ’em!)

    • Fred Allen
    • Posted October 1, 2008 at 1:23 pm
    • Permalink

    Dave Patch is a whackjob with little knowledge of the stock market, business operations, the economy and financial matters. He is as clueless as he is big-mouthed!

    Hard to believe that the SEC IG Kotz listened to that fool!

    He Burrell, Faulk, O’Brien and a few others are Market Place gadabouts and constitute nuisances to the well being of the US Economy and Financial System.

    The Enforcement Division should go after that whole group of deepcapture/NSS whackos for their conspiratorial actions to assist scam companies in defrauding honest investors. Their track record of scam companies that they individually and as a group supported is long and disgusting!!!

    Shame on them. What self-serving scumbags. They should be ashamed of their lack of Patriotism to our great country!

    • dave patch
    • Posted October 1, 2008 at 10:00 pm
    • Permalink

    Tony, that you running this site? This is a great read thanks. but wouldn’t it be teh honorable thing to actually put a name to your rants?

    I am impressed at how quickly you can get the pond scum like Antar to show up.

    Hey, how bout this situation huh. Everybody is now concerned about a “non-issue”

    Sammy, You ain’t smart enough for Yale. Then again, based on how you assess things, intelligence has always played second hand to scamming.

    • dave patch
    • Posted October 1, 2008 at 10:15 pm
    • Permalink

    Sorry Kevin, for a minute there I thought you were Tony Ryals. My mistake. I am glad that I am so much on your mind that you would dedicate this rant to me. These new rules taking place, with more to come must really piss you off. LMAO

    Say Hi to that criminal in prison for me – SUCKER!

    Oh, and next time, have the balls to put your name on your work.

    • dave patch
    • Posted October 2, 2008 at 2:28 am
    • Permalink

    Kevin, do you mind responding to this report? I know how much you followed Gary Weiss and protected his activities. Maybe you can explain what incentive Weiss would have to act this way; risking his career and his reputation.

    Sam may be able to help you out on this if you need since sam has come to be very close to Gary. Maybe you can ask Sam what acts he was engaged in to distort the truth.

    Emails show journalist rigged Wikipedia’s naked shorts
    Overstock’s Byrne vindicated amidst economic meltdown

    By Cade Metz in San Francisco • Get more from this author

    http://www.theregister.co.uk/2008/10/01/wikipedia_and_naked_shorting/

    And to think, this comes from a site that used to shred Byrne.

    Now don’t moderate this post out of publication, that would imply you have something to hide after calling me out and all.

    • Fred Allen
    • Posted October 2, 2008 at 1:07 pm
    • Permalink

    LOL, Patch. And now the talk on the Business programs is that the Short Ban may be having an adverse affect on the economy. One CEO even asked to be taken of the list of 900.

    Hey, Patch, why not go back and tell us what you said in the past about scams like CMKX, USXP and other share diluting pump and dumps you have supported or shilled for.

    You and your crew are despicible, and your greed and power-tripping on poor innocent investors reflects a lack of basic patriotism. Shame on you, Patch. Shame on you!!

    • star the wonder pup
    • Posted October 2, 2008 at 7:43 pm
    • Permalink

    It is truly funny to watch Patch when he gets numbers in his hands. He hasn’t a clue about basic numerical analysis. He starts with a conclusion and distorts the data set to fit.

    I hope he didn’t work on the engineering of any products I use. Rumor has it that he was the genius behind the Yugo.

    • Fred Allen
    • Posted October 2, 2008 at 11:22 pm
    • Permalink

    Patch is not as intelligent as your average slimey conman!! Greedier, perhaps, but not very bright!!

    Wonder if the SEC is looking into his shilling!! They should!

  4. Dave Patch received free legal representation courtesy of Overstock.com CEO Patrick Byrne. He is just a dumb shill for dishonest CEOs like Byrne.

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • URSAC'ed
    • Posted October 3, 2008 at 10:13 am
    • Permalink

    Mr. Patch, can you explain why General Electric’s market cap is 50% less than it was a year ago? Less than 1% of the float is sold short.

    Also, your favorite reporter, Liz Moyer, owes Jasper Knabb’s shareholders 2 apologies and 1 to the SEC’s enforcement division. She permitted Mr. Knabb to blow smoke up her skirt twice with respect to naked short selling being “the problem.”

    Kevin, who the hell is Kevin? I thought this blogsite author’s initials are S.A.C.

    • Fred Allen
    • Posted October 3, 2008 at 8:32 pm
    • Permalink

    Hey Patch, here you go. Spin this in your con game:

    Short Sellers and Speculators Are Heroes,
    Not Villains

    by Dr. Mark Skousen, Advisory Panelist
    Thursday, October 02, 2008

    Dear Investment U Reader,

    I’m expecting a lot of nasty e-mails on this column, but the truth needs to be told. Short-term traders, especially short sellers, are often blamed erroneously for manipulating stock prices, forcing them down far below their real value, and for creating crashes and general chaos on Wall Street.

    In fact, short sellers have been identified as so vile by SEC Chairman Christopher Cox that he has banned short selling for some 980 publicly traded companies. Chairman Cox and other critics of the market blame short sellers for several grievances:

    1. Short sellers destabilize prices in a shaky market, and in a panic can make matters worse, causing a crash.

    2. Short sellers artificially engage in “bear raids,” where traders gang up on an illiquid – or thinly held – publicly traded company and push the price way down below their intrinsic value. After the stock plunges, traders cover their shorts and buy up good companies at bargain prices.

    By temporarily banning short sales, Chairman Cox hopes to prevent the stock market from declining further. (So far he has been unsuccessful.)

    So who’s right, the short-selling proponents, or Chairman Cox? The best way to determine the truth is to look at what short selling is, and the evidence on what it does.

    What Exactly is Short Selling?

    Short selling is a way for investors and speculators to bet on falling prices, and for long-term investors to protect their investment portfolio during a bear market.

    Most investors profit from stocks by buying a stock and then selling it when the price goes up. Short sellers do the opposite. They sell a stock first and then buy it back when the price goes down.

    They accomplish this by borrowing the stock first and then selling it. To close their trade they purchase the shares, hopefully at a discount. When they buy the stock back, they return the borrowed stock to the owner and pocket the profit from the difference in price. Short sales must take place in a “margin account” because the sellers are using borrowed money.

    “Naked” short selling is more controversial. It’s defined as a short sale by brokers/dealers who sell a stock short without borrowing it first. The SEC recently banned this practice as well.

    Investors can also sell short a stock that they own. This is the least controversial technique. It’s often used at the end of the calendar year to lock in profits in a stock that has gone up in price.

    But with the potential positive and negative aspects of short selling, what do the facts from the scientific community show?

    Adam Reed, a finance professor at University of North Carolina, and Arturo Bris, a finance professor at Yale, have done extensive studies on short selling. He has come to the following conclusions.

    On bear raids:

    “In recent years, when academic researchers have looked for bear raids – even in those areas in which investors suspected that they existed – they haven’t found them.” They couldn’t even find evidence of bear raids on 19 beleaguered financial stocks. They conclude that short sellers reacted to downward momentum, rather than caused it. “Typically, short sellers trade in response to past negative news,” Professor Bris said, “rather than inducing current stock price drops.”
    Note: While bear raids are unlikely in mid to large companies because of their size, I do think that short sellers can artificially manipulate small-cap and penny stocks. I’ve seen it too many times!

    On short selling causing greater volatility:

    Professor Reed found just the opposite, that “stocks without short selling not infrequently trade at prices that deviate widely from their true value.”
    Three Little-Known Benefits of Short Selling

    Academic studies also show three major advantages of using short selling:

    First, they counter the “irrational exuberance” that company officials and bullish promoters parade about their stocks, and encourage a more sensible valuation of a company’s worth.

    Second, short selling is a legitimate way to hedge your position. It is not simply a strategy to profit from falling prices. Major institutions and conservative investors often use short selling to lock in a position for a period of time, and protect themselves from downside risk.

    Third, short sellers and short-term traders provide extra liquidity and thus reduce bid-asked spreads. It is short-term speculators that allow long-term investors to sell when they want to.
    From a practical point of view, while short selling of individual stocks is temporarily prohibited, investors can still play the down side of the market by buying short exchange-traded funds (ETFs), such as SHORT S&P500 PROSHARES (AMEX: SH).

    Professor Bris concludes with this word of caution: “The ban on short selling may prolong the crisis in the sense that it will now take the markets longer to adjust to the true values of financial companies.”
    Short sellers and speculators are in fact helping us make the markets more efficient and more profitable for investors. In today’s market environment we can use as many of these heroes as we can get.

    Let’s hope Chairman Cox comes to his senses and reverses his ban on short selling soon.

    Good trading, AEIOU,

    Mark

  5. Patrick Byrne hired a lawyer for Dave Patch and Patch did not pay the bill.

    http://boards.fool.com/MessagePrint.asp?mid=26599856

    • Fred Allen
    • Posted October 3, 2008 at 11:12 pm
    • Permalink

    Patch is pathetic. He hasn’t gotten anything right lately!

    And rumor has it that the SEC IG has “unfinished” business with him!! Hopefully the DOJ one of these days also!!

    Who does he work for that allows him to Post his rubbish and delusions all day? Are they culpable for their employees actions? Is he using their network and equipment? Incredible…

    • dave patch
    • Posted October 4, 2008 at 12:19 am
    • Permalink

    Come on Sammy, you can do better than that. Your world is coming apart at the seams and that is all you got? Chanos should be getting more from his money that what you have provided here.

    • Fred Allen
    • Posted October 4, 2008 at 1:25 am
    • Permalink

    Dave. Why so agitated! SEC breathing down your neck?? LOL

    • dave patch
    • Posted October 4, 2008 at 3:02 am
    • Permalink

    LOL. I would say you guys appear more agitated that I. This entire blog was an attempt to silence a critic – imagine that from whiners who accuse others of silencing their critics. Then again Kevin never really had much by way of courage.

    What’s wrong Fred, worried about the future? Me, the SEC has tried to dig up dirt on me for 8 years and they got NADA.

  6. Dave Patch writes:

    “Your world is coming apart at the seams….”

    My response:

    Corrupt Utah Attorney General Mark Shurtleff tried to defame me after receiving a $5,000 payment from Overstock.com CEO Patrick Byrne. However, he did not count on me wearing a wire.

    How much has Patrick Byrne compensated you to shill for him?

    Kindest regards,

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • Fred Allen
    • Posted October 4, 2008 at 2:26 pm
    • Permalink

    Patch, you talk about intimidation when you have stinky associations with the slimey likes of Mitchell and Bagley, whose Job Title contains the word “Intimidation”! That’s what they are all about! Real despicable, like petty Nazis!And Paddy he-self??? LOL And then their is your fellow whacko, Burrell and Bobo! Great crowd you are in!!

    BTW, I would NOT brag that the SEC has been Investigating you for 8 years!! I have NEVER been investigated and few cyber-sleuths have! Just scumbag shills and conmen, I guess eh? Psst, think they may be getting closer to finally nailing you?

    Hey, what’s up with that diarrhea of the pen from Mitchell. Talk about a stream of unconsciousness!! Yikes, was he a Castro Speech Writer???

  7. “Hey, what’s up with that diarrhea of the pen from Mitchell.”

    Mark R. Mitchell is a washed up former Columbia Journalism Review reporter. He is now a paid shill for Overstock.com CEO Patrick Byrne. Even a low life like Mark Mitchell needs to put bread on the table, even if it means taking money from corrupt CEOs like Patrick Byrne.

    Regards,

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • underbond
    • Posted October 4, 2008 at 11:29 pm
    • Permalink

    dave patch: This entire blog was an attempt to silence a critic

    OK, what now?

    By what warped logic can you possibly conclude I’m attempting to silence you (assuming that’s what you’re trying to say)?

    I’m just writing here. Hell, I’m not even choosing the topic from week to week. That much was set in stone by Mark Mitchell. You do know you’re featured in Deep Capture, do you not? And you do understand that’s why you’re written about here, right?

    I haven’t even tried to promote this blog. I just set it to be discoverable by the search engines and you all found it entirely on your own.

    If you find even that too threatening you have more problems than anyone can help you with.

    Oh, and speaking of aliased writers, when is your pal the Easter Bunny gonna fess up his identity? Or does he have more rights than I do for some reason?

    • dave patch
    • Posted October 5, 2008 at 12:34 am
    • Permalink

    underbond, why not simply use you real name like I do, like Mitchell does, like Byrne does, etc… is it that to use your real name you fear that nobody in their right mind would take you seriously? hint, outside of the morons like Sam here none do Kevin.

    Have fun though, little men need their fun too.

    the rest of you guys spinning crap….you soooo scare me.

  8. Dave Patch writes:

    “underbond, why not simply use you real name like I do, like Mitchell does, like Byrne does, etc…”

    Hey Dave Patch:

    Haven’t you, Mark R. Mitchell, Judd Bagley, and Patrick Byrne posted anonymously on message boards when it suited your twisted agendas?

    By the way, will you fully disclose your financial affiliation with Overstock.com and Patrick Byrne?

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

  9. The wacko Dave Patch first accuses this anonymous blogger of being someone else. Then he asks him who he is.

    Apparently, Dave Patch likes to make baseless allegations.

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • Fred Allen
    • Posted October 5, 2008 at 2:34 am
    • Permalink

    Yeah! Well, do you expect better from Patch? If so, you’ll be disappointed. Keep your expectations VERY VERY low on him!

    • Tony Ryals
    • Posted July 14, 2011 at 11:52 pm
    • Permalink

    The fact is that both parties,i.e.-Gary Weiss and Sam Antar and Patrick Byrne and his criminal gang who have threatened my life on their recently closed thesanitycheck.con website are worse than crooks – both groups are stock scamsters and manipulators.Antar lies when he claims he is now a reformed stock fraudster turned reformer and Gary Gary Weiss has helped whatever stock he was trying to manipulator using his phony guise as an investigative reporter.
    However I am more concerned as I have been for years re Patrick Byrne and his own offshore hedge fund to manipulate and pump and dump various stocks such as the NFI or Novastar Financial that he lied about being ‘naked shorted’ or being a victim of ‘share counterfeiting’ by a supposed ‘Sith Lord’ when it was in fact more like a ponzi scheme that paid dividends until it didn’t – meaning NO share ‘counterfeiting’ was occurring because no one came forward to show they bought shares they didn’t receive dividends on until the collapse of the ponzi scheme that was NFI !
    Patrick Byrne’s NCANS simply replaced Agora Inc.’s James Dale Davidson’s NAANSS in 2005 and continued the lie that worthless penny stocks such as Bud Burrell’s,et.al.’s CMKX Diamonds and USXP
    and many other illegal pumps and dumps were really victims of ‘naked short selling’ that as Davidson had first done in 2002 with bio tech frauds Genemax And Endovasc that ripped me off.And its much bigger than this because even Georgetown ‘business’ professor James Angel lied about stocks being ‘naked shorted’ for this criminal gang that James Dale Davidson was part of behind the scenes or so said the anonymous Bobo O’Brien on the Yahoo! NFI message board in 2005 when WSJ’s Jesse Eissinger was snooping around but covered it up.In fact paradoxically it was Gary Weiss who used his position as a Wikipedia editor to remove all I wrote on Wikipedia about jim Dale Davidson’s and NAANSS even though he was supposedly fighting the naked short selling lie Davidson began and Byrne continued.
    In sum it is not which group are crooks and and manipulators – BOTH are ! But Bud Burrell should be in jail for his death threats and ex SEC Chair Cox should be prosecuted by his own corrupt SEC for lying on the sec.gov website in 2008 that dividend paying stocks like Fannie Mae and Freddie Mac had been ‘naked shorted’ when that is a proven lie !
    And while it is sickening the Bud Burrell uses Christianity in the form of his CFRN out of Sheriff Arpio’s corrupt Phoenix,Arizona to promote his frauds and lure victims to his penny stock frauds,it is also true that Weiss and Antar have approved of the same practice by partnering with Barry Minkow WHO DOES THE SAME.

    Barry Minkow: From scammer, to preacher, to defendant …
    http://www.signonsandiego.com/news/2011/jul/03/jailhouse-convert/ – Cached
    3 Jul 2011 – … he has since left San Diego County for his wife’s hometown in rural Tennessee. … becoming a born-again Christian (he had been raised Jewish) and …. In recent years, Sam Antar – like Minkow – has made a career of …

    Bud Burrell from the archives of CFRN Investigates | Christian …23 May 2006 by Christian Financial Radio Network
    As we share select interviews from our archives, you can expect to hear from Bud Burrell, Robert “Bobo” O’Brien, Patrick Byrne, Dave Patch, Mark Faulk and many others. This particular interview is one from our series …
    cfrnpod.blogspot.com/


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