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Tag Archives: John Fiero

(So, Gradient is off the enemies list now?  Does this mean Mitchell will be redacting all the nasty things he said about them?  For his part, of course, Byrne is naturally chalking this up as a win, but given the lengths to which Gradient tried to make this all go away, it’s hard to think they’re not happy.  Furthermore, Joe Nocera had a very interesting article suggesting that Gradient’s statement was something of a non-retraction retraction.)


Mitchell picks up from last time by talking about information the “mole” on Anthony Elgindy’s chat room gave him.  (I should point out that the chat room shut down sometime in 2002, and Mitchell only began work on this piece in 2005, so whoever this fellow was, he had to have been peddling his story for some time before anyone bit on it.)  He reiterates how the chatters gushed over the work of certain journalists, and mused whether they were “merely paying off journalists”, or instead something “beyond normal”.  Because apparently Mitchell considers paying off journalists to be within the bounds of “normal”.

Mitchell then asserts that the reporters should have disregarded any information sent to them by anyone from Elgindy’s group on the basis that they shorted without a borrow in Canadian brokerages, thus continuing the overarching theme of Mitchell’s work, that being a short-seller should cause you to forfeit speech rights.  I might also add that, as Mitchell himself has already noted, there was nothing whatsoever illegal about this tactic.  Furthermore, in many cases, especially involving stocks listed not listed on the major exchanges but rather on the OTC bulletin board, this was the only method by which establishing a short position was even possible.  So just in case anyone’s wondering what an permanent, exchange-wide ban on short-selling would look like… there you go.

Back to Mitchell, who introduces his next subject, a “former SEC official”, who is — surprise! — anonymous.  The suggestion is basically made that the SEC, at the beck and call of Elgindy’s group, opened investigations into certain companies with the sole and direct intent of damaging those companies, noting that actual charges were very seldom filed as a result of these investigations.

Even worse, the anonymous SEC guy goes on to say “these were good companies”, many in the pharmaceutical space, and that the SEC investigations, quote, “stopped cures”.  And of course as former SEC official he is obviously an authority on the potential of development-stage pharmaceuticals.

But okay, these are pretty damning charges, so how about an example or two so the reader can judge for themselves? What’s that, Mark?  No examples, just unspecific innuendo?  Well okay then.  Non-specific accusations made by an anonymous individual.  Pulitzer-quality journalism to be sure.

At any rate, Elgindy’s imprisonment did not stop short-sellers from selling short.  I think that’s Mitchell’s next point, anyway.  Oh, and the companies they short sell are all “innocent”.  Of course.  I’m sure the guys at Lehman and Bear Stearns and all have nothing to worry about.

But never mind that, let’s shift in mid-paragraph to the tale of one John Fiero, who apparently fell afoul of NASD (now FINRA, and, mind you, not SEC) regulations regarding short-selling, and was fined $1 million.  Heavy stuff, seemingly, yet there’s a funny thing about those NASD fines: you can simply resign from the group and avoid paying them.  And that is precisely what Fiero did, yet Mitchell simply seems to scratch his head and not understand how the fine goes unpaid to this day.

Separately, Mitchell quotes someone stating that Fiero had been supplied with an office and “trading computers” by that same NASD body.  That would admittedly be all kinds of mixed-up if it happened after the $1 million fine had been levied but nowhere does Mitchell assert that.

Finally Mitchell returns to the subject of Dan Loeb, aka Mr. Pink.  But frankly it’s really hard to understand what he actually has to do with anything else in this piece, or what Mitchell’s point is in even mentioning him, other than to get a quote about “war” on an unrelated issue, to segue into a summation that it’s “war” between Overstock and short-sellers.  Which we kind of already knew.

Next week: Cramer again, and this time there’s video!

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