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Faulking Opinions - Mar 26, 2006 - Printable Version
- 60 Minutes; From Joe Mainstreet to Daddy Warbucks
by Mark Faulk
Another week, another tepid news report. This was how I phrased it two days ago, as excitement spread about the 60 Minutes “expose’” that aired tonight: In other news, CBS is airing a segment on 60 Minutes this Sunday about hedge fund SAC and Gradient Analytics concerning stock manipulation accusations involving Overstock.com. In this writer’s opinion, it will most likely be another “isolated incident” story, just as NBC Dateline turned their “major expose” into a 10 minute segment about a single company, Eagletech Communications, and ignored the larger issue altogether. In fact, I’d be willing to bet that there will be no more than a passing reference to naked short selling at all, and that that will accompanied by a lame joke about the word “naked” and a slightly embarrassed giggle from a female commentator. Any takers? Our only hope is that Patrick Byrne is involved in the segment, because, given more than 30 seconds of air time, he will address the larger issue of fail to delivers and stock counterfeiting. Good for him.
As it turns out, I was being overly optimistic at that. It was indeed just another “isolated incident” story (with one notable exception), although a well-presented one, but they didn’t even mention naked short selling, stock counterfeiting, or fail-to-delivers AT ALL, and the only mention of Overstock was a cursory, “It’s worth noting that Camelback, now known as Gradient, is being sued by another company on charges that parallel the Biovail case.”
In all fairness, the 60 Minutes piece was far superior to the watered-down Dateline whitewash, and it painted a fairly unflattering picture of SAC Hedge Fund owner Steven Cohen as Daddy Warbucks, showing an aerial view of his massive mansion, complete with outdoor hockey rink, on his 14 acre walled estate, and pointing out his $500 million salary from 2005. They also showed him to be as secretive as the hedge fund industry itself. Of course, this is the same man once called by Business Week “The Most Powerful Trader on Wall Street You’ve Never Heard of”.
As for “The Big Picture”, just as the viewing audience had absolutely no clue that a broader problem in the stock market even exists from watching the Sharon Hoffman produced Dateline fiasco, viewers of tonight’s 60 Minutes show, will most likely see it as simply another questionable lawsuit from a company whose stock hasn’t performed as well as they would like. Of course, they didn’t have much time to expand the scope of their report, since the vast majority of the special two-hour episode was dedicated to Tiger Woods.
Don’t get me wrong, the former Camelback/Gradient employees who put themselves on the line should be commended for their bravery, and Biovail CEO Eugene Melnyk can be added to the list of company executives who are fighting back against the corruption. Good for him. Every high-profile ally we gain in this battle makes it more difficult for the major media, the SEC, and Congress to ignore the problem.
The brightest spot in the Big Picture department, the “notable exception” that I mentioned earlier, was the final comment of Connecticut Attorney General Richard Blumenthal, who made it a point to let Americans know that a problem does indeed exist within the hedge fund industry. This was Blumenthal’s closing statement:
“Joe Mainstreet can be impacted by hedge funds nowadays as never before. They hold more money, have more power, they’re the elephant in the room that is unacknowledged a lot of the time, but they can hold huge market sway. And that’s the reason we need to know more about them, and I’m investigating them so that hopefully there is more disclosure and transparency.”
Again, good for him. These are the type of people we need on our side, individuals who have the power and the courage to speak out about the manipulation and fraud in our financial system, and who have the authority to do something about it. It’s encouraging to hear that the state attorney generals are still pursuing this issue, since federal regulators and our elected officials in Congress seem to have abandoned Joe Mainstreet in favor of Daddy Warbucks.
And that’s the Faulking Truth.
This commentary is also posted, along with an excellent comment section, at:
http://www.thesanitycheck.com/Blogs/MarkFaulksBlog/tabid/86/Default.aspx
Mark Faulk is the Editor of The Faulking Truth, and the author of the upcoming book entitled "The Naked Truth," due out in June, 2006. For more information on the book and on the stock market scandal, go to http://www.faulkingtruth.com , and to pre-order your copy, go to http://www.theownersgroupinc.com/cart/
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