Tuesday, June 22, 2010

InterOil; Medifast; Lennar: "The SEC Is After Two Dow Jones Journalists’ Emails"-CJR (IOC; MED; LEN)

From the Columbia Journalism Review's The Audit blog:
Gary Weiss asks a heckuva good question: “What in heaven’s name is the SEC thinking? Is it completely out to lunch?”
Admittedly, you could say that about just about anything the SEC does. But Weiss reports that the bumbling agency has subpoenaed fraudsters-turned-fraud-fighters Sam Antar and Barry Minkow for records relating to their conversations with short sellers about several companies. Well, okay. But:
What gives this little-known story—here’s the only press coverage—a strange odor is that the SEC wants to know from both Minkow and Antar what they have been saying to the media. The agency has subpoenaed their emails to two reporters for Dow Jones News Service, Michael Rappaport and Ben Dummett, who both have written articles on Interoil. Neither journalist was subpoenaed.
So the SEC is going after journalists without actually having to take on their news organizations. It’s doing an end-run around its own guidelines, as Weiss points out:
What makes this all even worse than the Einhorn mess is that the SEC is probing the two men’s contacts with those two Dow Jones reporters. That can’t help but have a chilling effect on the ability of the financial press to do its job. The agency has rules strictly limiting subpoenas to the media. Similar rules are needed to keep it from engaging in fishing expeditions aimed at people talking to the press...MORE
Here's the FDI's response:
Title: A Prophecy Fulfilled: Trying to divert attention from flawed Weiner Report and avoid the facts
Friday, June 4, 2010
SAN DIEGO, CALIF.—The Fraud Discovery Institute’s recently released investigation into the
validity of Congressman Anthony Weiner’s (D-New York) critical report singling out Goldline
International, one of the most respected companies in the gold coin industry, has stirred a fair
amount of media interest and, quite predictably, attacks on FDI and its co-founder Barry
You can read the 118-page report for yourself here, where FDI refutes the conclusions of the
Weiner Report one by one and shows the poorly researched report to be little more than a
politically motivated hatchet job to hurt Goldline, which happens to sponsor conservative TV and talk radio hosts, the most prominent of whom is Glenn Beck.
In the report, FDI had thought it had clearly described its motivation for devoting so much time
and money to the investigation. As stated on the opening page, FDI didn’t take on the project:
… because we are traditional defenders of Goldline or Glenn
Beck. It’s simply because the Fraud Discovery Institute has also
been a victim of similar tactics, unfounded allegations lodged with
the SEC by public companies that want to silence our welldocumented
criticisms of them.

Later in FDI’s report, it disclosed that six companies—Lennar Corporation; InterOil Corp;
Medifast Inc.; Usana; PrePaid Legal and Herbalife, which FDI had issued critical reports
about— had filed complaints with the Securities and Exchange Commission about FDI, and in
the post-Madoff world, the SEC really has no choice but to investigate.
Now, reporters covering the Weiner Report controversy and FDI’s investigative work have been tipped off to the “news” that FDI is under investigation by the SEC. And so, again, another
diversion begins....MORE
When linking to Minkow amd Sam Antar we put their qualifications in the headline or story:

Barry Minkow (ZZZZ Best Fraudster) on InterOil CEO's Bad Faith Bankruptcy of Nikiski Partners (IOC)

Whitney Tilson: Score! In a Move that Stunned Wall Street (and Soros and Goldman) InterOil has Problems (IOC; GS)
Here's the latest. From Sam Antar (Crazy Eddie fraudster) whose "about me" says "I am a convicted felon and a former CPA" (insert family shame joke here) ...
"InterOil Responds to Allegations" (IOC)