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Tag Archives: David Rocker

So Byrne et al got what they wanted, and yet look what’s happened to the markets.  Not saying there’s any kind of causal relationship there or anything, but it’s really hard to see how it helped.

Our first new guest in Deep Capture this week is one David Rocker, who is a highly successful hedge fund manager, or at least who was highly successful until the Lehman Brothers bankruptcy tied up what seems like half the capital on Wall Street.  Few portrayals of the man as a person are terribly positive, though that’s not a surprise when you make as many enemies as the man has.  Of which Byrne, Mitchell and the rest of the Deep Capture gang are just a small segment.

Rocker is unlike most hedge fund managers in that he allows himself to be quoted by journalists, notably Jim Cramer and Herb Greenberg, thus making his opinions public.  His voice is usually that of the bearish case in a given stock, which, as we have seen, the Deep Capture very gang strongly object to being heard.

Mitchell labels Rocker’s reports and comments “often bogus”, but rather than cite any examples, Mitchell decides it enough to smear them as being largely based on the research of Gradient Analytics.  That’s the firm that was subpeonaed by the SEC in 2006, then sued by Overstock… then cleared by the SEC and finally allowed to exit Overstock’s lawsuit with a brief and narrow retraction — if it actually amounted to a retraction at all.

Oops.  Now that Gradient is no longer one of the “bad guys” Mitchell’s whole basis for impugning Rocker’s commentaries just blows away in the wind.  Should’ve gone with some examples instead, Mark!

Mitchell goes on to portray Rocker as “tight with the SEC”, to the point, Mitchell claims, that they would open an investigation into a company simply on his say-so.  “As was Elgindy,” Mitchell hastily adds, lest the reader wonder what exactly is a bad thing about having the implicit trust of the cops.  So noted, in Mark Mitchell’s view of the markets, that there’s no surer sign of being crooked, than having the trust of the cops.

Mitchell does concede that some companies thus targeted were in fact found to be fraudulent.  But others, Mitchell says, were instead proven to be “beyond reproach”.  (Someone needs to introduce Mr. Mitchell to the concept of “middle ground”.)  But, as Mitchell laments, by the time exoneration and deification came through, it was too late and the businesses had been destroyed by the specter of having been under SEC investigation.

I hate to keep harping on this, but once again, an example of a company thus exonerated but nevertheless driven to bankruptcy by nothing more than being under the weight of an investigation, would not have been out of place here.

But no time for that, because it’s time to switch subjects, and once again do so in mid-paragraph!  (Seriously, the folks at CJR have to be truly embarrassed by this point.)  Our next guest is a name — two names actually — heard all too often during the meltdown of the dot-com bubble, ladies and gentlemen, let’s welcome Milberg Weiss!

Milberg Weiss — today known simply as Milberg — is a law firm specializing in class-action lawsuits.  And frankly I’m not even sure any elaboration on that is necessary as anyone who was in for the downside of the market in the early 2000’s probably has a pretty good idea how that works.  You lose thousands in the market, then years later, you get a check for twenty bucks, and that gets called justice.

As you might have gathered from my tone just now, I’m not a fan.

So for once Mitchell and I might at first blush appear to be on the same page.  But Mitchell, never one to do anything unless he can overdo it, isn’t satisfied with the giant fees Milberg pulled down on these class-action suits, as a motivation for their actions.  No. he has to go one further and say Milberg selected its lawsuit targets at the behest of the shadowy short sellers.  Because after all, why be satisfied with straightforward greed when you can pull a full-blown conspiracy into the picture?

Let’s face it, Milberg was the ultimate vulture of the early 2000’s.  You couldn’t just ignore them.  If they still wielded the power today they did seven years ago, they’d be all over Overstock over this restatement business, if they hadn’t been already.  So the notion that Gradient would have a file on them and their actions?  Not a surprise and not in and of itself particularly suspicious.  Of course if Mitchell could give us some insight into the actual contents of… no?  Well, there you have it once again, another Mitchell special, heavy on innuendo, feathery light when it comes to facts.  I believe in some sectors of journalism they call that a “hit piece”.

To be fair to Mitchell, the quiet settlement between Gradient and Overstock was not one that many saw coming, so his focus on Gradient, while a little embarrassing in retrospect, is nonetheless at least somewhat understandable.

That is not so much the case for the topic of next week’s section.  You know all that fuss I’ve been making over how Mitchell rarely if ever provides examples of victims, to back up his claims?  Next week, he finally gets around to one.  But there’s a small problem.


Sorry about last week; just forgot to hit the button! Doh!

Cramer, who is a sociopath, owns with Marty Peretz, who is an aristocrat.

Hey, Mark, Ann Coulter’s on the phone.  She thinks you need to reel it in a bit.

Seriously, I don’t claim to be a professional copy editor or anything, but if I were, and that’s the opening line of a piece I’m evaluating, that’s where I stop reading.  Is Mitchell really expecting to have this taken seriously as some kind of landmark exposé?  Or is he deliberately setting himself up to fail here so as to “prove” that the mainstream hates him and therefore he must be onto something?

Anyway, thus begins a section which spends about 80% of its length in smear-a-palooza mode.  But rather than do any kind of in-depth trashing of anyone’s character, Mitchell indulges in more of a buffet-style smear, a little of this, a little of that, now on to him, now on to her.

For instance, with Peretz’s introduction here you’d expect him to be the subject for a fair amount of time.  But in point of fact, he’s all but forgotten after the first paragraph.  The spotlight momentarily moves back to Cramer’s early days working for soon-to-be-infamous Wall Street figure Ivan Boesky, before going off on a tangent about Michael Milken, how many suspect he was the person Byrne intended to identify as the “Sith Lord”, and how Byrne has apparently subsequently decided there was no single Sith Lord after all but rather the enemy was some kind of collective evil “like Al Qaeda”.  Of course never mind that even Al Qaeda had a well-established hierarchy before they got driven into the caves… oh, but why am I expecting any sense out these metaphors anyway?

Anyway, back on track, after Boesky, Cramer’s next boss was Michael Steinhardt, and it’s his turn in the smearlight.  He’s of course a “thug” (one of Mitchell’s favorite epithets it seems) and “it is said” (note the brave lack of attribution) that Steinhardt “showed no remorse” after an employee had a heart attack.

The story moves on to Steinhardt’s father, “the biggest Mafia fence in America” per Mitchell, back momentarily to Peretz (who Mitchell feels compelled to remind us funded Cramer’s hedge fund, even though he just said that four paragraphs earlier), and then on to Mark Rich, recipient of a rather controversial pardon from Bill Clinton.

Lest he be perceived as showing any sex discrimination, Mitchell adds to his hit list Cramer’s wife (not specifically named apart from Cramer’s nickname of “Trading Goddess”) and CNBC anchor Maria Bartiromo.

All in all, quite a display from the man who was just a couple of sections ago complaining about how anyone that nettled these guys would be subject to a vicious smear campaign.  Self-justification in advance or just a total lack of self-awareness?  You be the judge.

Finally Mitchell settles down for a while on one of his boss’s most archest of enemies, David Rocker, by way of leading in an extremely roundabout way back to where he left off last section with the SEC’s investigation of Gradient Analytics, and its decision to issue subpoenas to numerous journalists — basically anyone who had written critically of to date — to see who’s been talking to whom, when, and about what.

But we’ve already covered why journalists (of which Mitchell again seems to exclude himself) generally consider that a bad thing, so let’s cut to the big finish.  Cramer and Greenberg have “commandeered CNBC” (never mind the little detail that this was on Cramer’s show where he can and does talk about anything he wants to as along as it has some relation to Wall Street).  And Cramer pulls out his subpoena — maybe a copy, maybe the original, who knows — and writes “BULL” on it in large black marker, before ripping it up.


I suppose it would be nasty of me to note that, even as Mitchell attempts to construct a cliffhanger moment out of this (even as he’s stretched the narrative of this moment across three sections — does he think he’s writing for Dragonball Z or something?) he’s already spoiled the resolution: the whole “cowardice and strange events” thing that led to the SEC backing down.

It’s pretty clear that this moment is why these guys fire so much ammo Cramer’s way.  He effectively called them all out on national cable TV and publicly humiliated them (via those in the SEC that had done their bidding) and got clean away with it.  And that’s just something that sticks in their collective craw to this very day, even as Cramer has rather paradoxically seemed to have come around to embrace the idea that short sellers are out of control.  (Then again, he also thinks that companies are out of control too.  And that — all together now — it’s all George Bush’s fault.)

Next week: the public reaction to Cramer’s stunt.  Or lack thereof, and why that’s apparently a horrible thing.