Another Key Departure at Overstock.com Goes Unreported
Another key officer, former Treasurer Rich Paongo has quietly left Overstock.com (NASDAQ: OSTK) amid an ongoing Securities and Exchange Commission investigation of financial reporting violations by the company. However, Overstock.com made no disclosure to shareholders of his February 2010 departure from the company.
This morning, investigative journalist Gary Weiss received an anonymous comment on an old blog post tipping him off about Paongo's departure:
Here's a tidbit - you mention Rich Paongo in this article...he "left the company" as well
After Gary Weiss emailed me the comment, I checked Rich Paongo's linked in profile which discloses him leaving Overstock.com in February 2010 after 8 years and 9 months of service. According to SEC Form 8-K instructions:
If the registrant’s principal executive officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer, retires, resigns or is terminated from that position, or if a director retires, resigns, is removed, or refuses to stand for re-election (except in circumstances described in paragraph (a) of this Item 5.02), disclose the fact that the event has occurred and the date of the event.
While it's Overstock.com's position that none of the above applies to Paongo, his departure from the company can be viewed as a material event requiring disclosure. It's certainly something that investors would want to know about.
Paongo's emails back and forth to former CFO David Chidester, who suddenly left the company under a cloud as it turns out at around the same time Paongo left, are under probable scrutiny by the SEC in their investigation of the company.
According to Roddy Boyd's article in The Big Money, Overstock.com failed to disclose certain cash flow problems and material weaknesses in internal controls to investors starting around 2005. Paongo's emails to Chidester about Overstock.com’s relations with certain factors were cited by Boyd.
Paongo's linked in profile cites that he was "involved in negotiations for RFP that reduced D&O premiums by 50% but expanded insurance coverage by 40%." Overstock.com will need the expanded D & O liability coverage.
Recently, Overstock.com was required to restate its financial reports for the third time in three years, after this blog exposed GAAP and SEC disclosure violation the company. Rather than restate its financial reports to correct those violation, CEO Patrick Byrne orchestrated a vindictive retaliation campaign against me other company critics.
In November 2009, Overstock.com fired Grant Thornton as its auditors and Byrne publicly vilified them after they agreed with my recommendation that the company restate its financial reports to correction financial reporting violations. In February 2010, Overstock.com finally announced that it was restated its financial reports to correct certain material financial reporting violations that were exposed out in this blog. In March 16, 2010, Overstock.com delayed filing its 2009 annual 10-K report as new preiously undisclosed GAAP violations were revealed by the company.
Sam E. Antar
I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes, simply because I could.
If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.
I do not own Overstock.com securities short or long. My research on Overstock.com and in particular its lying CEO Patrick Byrne is a freebie for securities regulators and the public in order to help me get into heaven, though I doubt that I will ever get there anyway. I will probably end up joining corporate miscreants such as Patrick Byrne in hell.
In any case, exposing corporate crooks is a lot of fun for a forcibly "retired" crook like me. Analyzing Overstock.com's financial reporting is a forensic accountant's wet dream and Patrick Byrne is about to become the SEC's new orgasm.