Saturday, June 04, 2005

The WSJ/Jesse Eisinger Email Exchange

Here’s the email exchange with Jesse Eisinger of the WSJ, which I agreed to keep private until his piece ran. For the record, I sent him an email advising him that our deal had expired, unless he could provide a satisfactory explanation for his familiarity with NCANS’ banking details as well as with phone records of a large donor to the cause. I have received no response, thus it is full disclosure time. Note all the reassurances that this was not going to be a mean-spirited hatchet job. And the promise to get back to me with a list of questions before he writes the article. Read it, and you will get a sense of the exchange. Especially the last section – my responses to his hard questions, and his subsequent refusal to answer any of the questions as to the source of his info.

No article has come out, but a month has gone by, and frankly, given the questions about the banking records and such, I would say that his competitive advantage was more than protected by me. Also for the record note that I have email exchanges with other reporters that have remained confidential to this day, so this is a troubling special case.
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Eisinger, Jesse to NCANSmail More options May 4

Bob,

I would appreciate it very much if you would reconsider your policy and talk with me by phone or in person. I can meet you wherever you would like. As you may have guessed, I'm pretty sure I know who you are, and I would like to write a story about you. I find your corner of cyber-world of stock investing -- the shorts versus the anti-shorts -- fascinating and newsworthy, given the impact both sides can have on share prices. You have become one of the more renowned participants in this debate -- the loyalty of your followers is pretty impressive -- and there is much interest in who you are and your motivations. Given the amount of attention you've gotten lately, it's probably inevitable that your identity will be revealed eventually, and I would like to use your story to explain the debate and the people involved in it.

To be frank, I am reluctant to conduct an interview via email, given that you say you'll post all my emails. Journalists are a competitive lot, and lots of journalists would probably jump at the chance to reveal your identity without doing the careful research (ha ha ha – Weil’s piece certainly was carefully researched, huh? – Bob) required for a story in The Wall Street Journal.

The bottom line is: I don't want the information I have gathered put in the public domain. Moreover, email is by nature impersonal. You can't break bread with someone over email. It's harder to build trust and more difficult to have the sort of productive give-and-take that one gets in a standard interview format. I would like to hear your story and share it with my readers: how you can to invest in NFI, how you came to learn about naked shorting and what you believe is illegal manipulation. Full disclosure: I have some "six degrees of separation" material. I have made no judgment on whether or not it's relevant, so I would like to run that by you.

Regards, Jesse
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Jesse:

I think that you are going down a path of little or no fruit. I find it extraordinarily unlikely that you have discovered my identity. I know of some of the avenues that were being bandied about on the boards, and I feel confident that those roads don't lead to me - they lead somewhere, but not where you think they do. I won't discuss my identity, at any rate, as the threat has increased, not decreased, over time. My attorneys reiterated that no good comes from that, and I concur. I will be happy to keep the exchange confidential until such time as your article is going to break, if that is the concern. I have to tell you that given your past affiliation with TSCM, and with hedge funds in general, I have to consider that your story doesn't have my best interests in mind. Nor those of NFI, a company that I believe has been brutalized (by hedge funds). So fire away, but the "Who's Bob O'Brien" angle is not something I'm interested in participating in. We've already seen one full page devoted to the man of mystery, does the world really need another?

The reason that I would insist upon a written record is because it really does keep things honest. If you know that your questions and my responses are going to become part of the public record, then you are unlikely to twist them - although having said that, I have of late seen more than I care to of reporter dishonesty. I'm not saying that they are all the same, but I don't see much evidence that many are different. So if you are comfortable speaking via email, we have a discourse. If it has to be unwritten, then I question why that is the deal killer, and further underscore that I have no interest in participating in that sort of ad hoc interview - I've been cored too many new ones of late, and don't need any more body slams, if they are avoidable.

I can probably answer a lot of your questions relating to the topics you mentioned, but anything that would give my identity away is off limits. And I can absolutely assure you that I have no interaction with the company, no specialized knowledge of their activities, no inappropriate payment or special favors, nothing, nada, zip. I was involved in REITS before I had ever even heard of NFI, and will likely be in them long after I am out.

Again, my suspicion given the other pieces that came from the Journal is that you are looking for an angle to paint them or me with a brush of innuendo, and are playing nice to get as much info as possible to make whatever connections you believe you might have stick. I agree that my "outing" will be an inevitable consequence of the growing visibility of the anti-naked shorting thing, but it will be on my terms, at the place and time of my choosing. I have met with some pretty interesting names, none of whom had any problems with my Bob O'Brien nom de plume, and I find that those who do express problems with it inevitably don't have my best interests at the forefront. So I can make this easy - I have no interest in having to strap on a kevlar vest every morning, and that is what a "Who's Bob O'Brien" piece will achieve, at the end of the day, if it's accurate. You can't guarantee that safeguard is unnecessary, and it's not your wellbeing that your are playing with, so while I understand your desire to uncover and unmask me, that puts us in an essentially adversarial role. It is not in MY best interests to do so at present. You want discussion about how I got into stocks, or what color shirts I favor, or why I am pissed off about an illegal market manipulation that appears systematic and habitual, we have something to talk about. If it's trying to get clues to tell you whether you are hot or cold, you are in the wrong place.

I hope that is clear. I won't post this message for 24 hours, or until we have a deal, or until your article breaks. I am good for my word, you will find. Sorry to be a hard ass. But that's the deal. Now, is it a non-starter, or do we have game on?
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Bob,

Thanks for your email. Let me think about this and get back to you tomorrow morning. I'd appreciate it if you would hold off on posting these emails, at least until we can come to an arrangement.
Rgds, Jesse
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Jesse:

The first two were already posted before you responded. Given that you didn't say anything but you'd like to chat with me, I doubt your virtue will be unduly tarnished. Your reply, this reply and my reply to you advising that I will keep everything from that point on under wraps did not go up. So your secrets, for the most part, are still safe....
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Bob,

I'm not quite sure how to proceed. My editors and I think you would make a great story, but at this point, my editors don't think it's appropriate to publish a profile of an anonymous person. We would never want to do anything to jeopardize anyone's safety, but I can't tell from what you've said here or in your postings why you think somebody would want to physically harm you simply for railing against naked shorting. Perhaps it's best if I just continue reporting on you and your crusade without your participation for the time-being and get back to you with specific questions later if we decide to do a story. I would appreciate it if you would continue to keep our correspondence private, for the reason I have already explained. If you change your mind -- and I continue to urge you to do so -- please call me.

Jesse
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Several weeks go by. I start hearing some rumblings from some of the folks who are supporters of NCANS that they are getting odd calls from some guy named Jesse at the WSJ – and some of the calls are on unpublished numbers, and on pagers that are only given to patients, and the like. This has me agitated, as I can start to intuit that someone has gotten the records to one of the phones that I use (provided by a sympathetic donor who is also a content provider to the site). My interest in speaking with Jesse at this point has dropped to less than zero.
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Bob,

I haven't given up hope that you would meet with me. I met with Patrick Byrne, who said to me he would put in a good word. I hope he did. Somebody I spoke with said you are coming back this week from being away. I could come to you, if you would make yourself available. Please let me know if you have changed your mind.

Thanks, Jesse Eisinger

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Jesse:

I can appreciate the sentiment on not wanting to publish a profile on an anonymous person. I could also point out that it has been done countless times. But you will note that I am not particularly eager to participate, and don't seek the limelight of this sort. It is not simply due to naked short selling activism that I fear for my safety - although if the theories are correct, there are huge, entrenched, powerful interests that carry undisclosed contingent liabilities due to the open fails, and which would be understandably interested in keeping any exposure under wraps. It is due to the nature and scale of the players on the darker side of the hedge fund game - you can find a snapshot of that in the Elgindy case.

It is not inconceivable that a few of the players there might be interested in removing or hampering the actions of someone exposing their gamebook, especially if it was leading to overdue prosecution and the like. I will admit that it isn't a huge percentage likelihood, maybe 10%, and that it is far more likely that I would simply be tarred and feathered publicly in a character defamation manner, however that 10% can be interpreted this way: how interested would you be in divulging your identity if you knew that one out of every ten days you or your kids might be harmed? It's Thursday. Which day between now and next Sunday would you like to have be the possible "get Jesse" day? It stops being fun when you contextualize things and make them real. That's real. And I am uninterested in collapsing the waveform to find out whether the 10% is actually 100% or 0%. If you don't understand or believe that I am out on the fringe, that is your right, but it doesn't change that we are talking about my life, not yours - I find people are much more willing to gamble with OPM.

I think that there are far more intriguing and worthy candidates for profiling than a simple shareholder/advocate. If I have mis-categorized your intent as being to smear NFI in some sort of six degrees of separation manner, I apologize. When I elect to "come out" you will be one of the first people I call - I intend to do it in a press conference setting at the time and place of my choosing. You and the rest will be under-whelmed by the mundanity of my circumstance and the ordinariness of my reality. These all get made public the moment you publish, in the interest of providing a full disclosure of your representations to me and our dialog back and forth. People seem fascinated by that sort of thing. Beats me as to why. But there it is.
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Another week goes by. Then out of the blue I get this message.
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XXXX,

I am in las vegas. Just left you some msgs. I'd love to meet if you are in town. Please let me know.

Thanks, Jesse
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Jesse:

Thanks for the invite, but my sentiment is the same as it was before. If you can't put your questions in a written format, then I'm not interested in a dialog. You will note that I have been good to my word and not published your correspondences, so one of us has acted honorably so far. It's your move. I don't particularly want to be the topic of a profile, so perhaps you are sensing a reluctance that is genuine. And, given that your info gathering is winding up in the wrong hands and could well be jeopardizing my safety (CXXX was stupid enough to send me an email a few weeks back with what he imagines is my real name - proof that your net leaks like a sieve and all sorts of folks have access to your info) you are in a very real sense playing with my life - and if you are wrong, and there is a threat, I lose, and you get to go "huh, go figure".

Thanks for nothing. Hope you are having a good time in town - interesting that you believe that I am even in that same time zone. Stay away from the girls at the Cheetah - I know you will be expensing a fact finding trip there, if you have any sense at all. Patrick did put in a good word for you. That's why I'm even responding. Have a nice evening.
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Jesse goes dark for 1 or so weeks, and then sends a long list of questions to me. Here are the questions and my responses, with data that is ID specific redacted.
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Eisinger, Jesse to NCANSmail More options May 31 (3 days ago)

Dear XXXX: I am disappointed that you wouldn't meet with me or talk with me. Nobody has yet told your story and I was hoping for that chance. I understand your reticence, but I am still working on a profile of you. I hope we can have a fruitful exchange on email. I have a lot of questions, as you'll see. I am working on a story that could run as early as this week. I would very much appreciate it if you would keep that and these exchanges between us confidential, but I will need responses soon. I can't comment on the exact timing of our stories. But I want to give you the opportunity to comment on everything that might appear in the story that is about you. I don't want there to be any surprises. (Followed by list of questions below, which I responded to in all caps to better differentiate the reply)
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Robert Obrien to Jesse More options May 31 (3 days ago)

Jesse. Here are my responses. This all goes public seconds after you break. Hope you have a good idea as to what you are doing, and a complete comprehension of the stakes you are playing with - real people's lives.

“I understand that your name is PXXXX XXXX SXXXX and that you go by XXXX. I understand you own a XXX-foot boat called "XXXXXX" that is sometimes berthed at the XXXX in XXXXXXXXX. It is maintained by JXXX XXXXX. I've seen records that you are the president of XXXXXXXXXXX, Inc., a XXXXX of XXXXXXX. Is that your current role? Please comment on this paragraph for accuracy.”

I WILL NOT COMMENT ON SPECULATIONS AS TO MY IDENTITY. OTHER QUESTIONS ARE FAIR GAME. ALTHOUGH I NOTE WITH SOME AMUSEMENT THAT THE ABOVE SOUNDS MORE AT HOME IN A YACHTING MAGAZINE THAN THE WSJ. DOES NFI OR NAKED SHORTING INVOLVE ANYTHING OMINOUSLY AQUATIC OR MEDICAL THAT I MISSED?

I understand that you sued BXXXXX SXXXXX NXXXXX Inc. over a $150,000 loan, lent by two entities that you had set up. (I have some questions below about those.) BXXXX was represented by BXXX XXXX and subsequently I understand that you employed Mr. XXX as your attorney in incorporating XXXXX. Please comment on this paragraph for accuracy.

SEE ABOVE – ANY QUESTIONS THAT ARE DESIGNED TO FIGURE OUT/CONFIRM WHO I AM ARE NOT GOING TO BE MET RESPONSIVELY. I PRESUME THAT YOU HAVE SOME SORT OF EVIDENCE THAT “I” SET UP WHATEVER TWO COMPANIES YOU ARE REFERRING TO, BTW – AND I WILL ADMIT THAT THE VISUAL OF ME WEARING A SAILOR’S HAT WHILE RESPONDING TO THIS IS AMUSING. IT’S A FREE COUNTRY, SO I’LL ALLOW THAT...

I have some additional questions for you.

1. A lot of people have come to trust your research on Novastar and your dissection of the naked shorting issue. How does it feel to have that responsibility?

MY RESEARCH INTO NFI AND NAKED SHORT SELLING ARE BASED UPON READILY AVAILABLE, PUBLICLY OBTAINED INFO. I HAVE NOTED BEFORE THAT WHEN SOMEONE DISAGREES WITH THE MESSAGE, THEY SHOOT THE MESSENGER, AND TRY TO TAINT THE MESSAGE WITH INNUENDO ABOUT ME. TO YOUR QUESTION, I DON’T TAKE THE RESPONSIBILITY LIGHTLY, AND ENCOURAGE EVERYONE TO DO THEIR DUE DILIGENCE. HOW MUCH HAVE YOU DONE ABOUT NFI OR NAKED SHORT SELLING, AND HOW MUCH OF MY DISSECTION DO YOU FIND INNACURATE, IF ANY? I READ WITH INTEREST THE AFOREMENTIONED INFO, AND NOTE THAT BOAT OWNERSHIP, COMPANY FORMATION, ATTORNEYS AND LENDING MONEY NOTWITHSTANDING - NONE OF IT INVOLVE NFI NOR NAKED SHORT SELLING. LET’S ASK YOU THE SAME QUESTION - SO HOW DO YOU TAKE THE RESPONSIBILITY OF WRITING FOR THE WSJ, AND HOW MUCH EFFORT HAVE YOU INVESTED IN EXAMINING WHETHER MY DISSECTIONS ARE ACCURATE STATEMENTS OF FACT, OR FLIGHTS OF LUNATIC FANCY? WHAT INSIGHT CAN YOU OFFER, ASIDE FROM WHOM TO CALL ABOUT MARINE MATTERS? THERE IS A MAJOR HOLE IN THE SYSTEM UNSCRUPULOUS MANIPULATORS ARE USING TO SCREW RETIREES OUT OF THEIR SAVINGS – HOW MANY HOURS HAVE YOU DEVOTED TO EXPLORING THAT?

2. How do you feel about what you've accomplished so far with regard to naked shorting and Novastar?

I FEEL LIKE THE NAKED SHORT SELLING ISSUE IS AN ELEPHANT IN THE ROOM THAT THOSE WHO GENERATE MONEY FROM THE PRACTICE WANT TO PRETEND DOESN’T EXIST. I PERSONALLY BELIEVE THAT IT IS A HUGE CONTINGENT LIABILITY THAT REPRESENTS A POTENTIALLY DEVASTATING ABUSE OF OUR SYSTEM BY A MINORITY OF BAD APPLES, WHO HAVE ABUSED A LOOPHOLE TO THE POINT THAT IT IS A SYSTEMIC, ENDEMIC PROBLEM. I AM FAR MORE FOCUSED ON NAKED SHORTING THAN NFI EVER SINCE IT BECAME OBVIOUS TO ME THAT THIS WAS A PERVASIVE SYSTEMIC ISSUE, NOT A COMPANY SPECIFIC ISSUE. AS TO WHAT I’VE ACCOMPLISHED, WE SHALL SEE WHETHER I CAN CONTINUE TO RAISE AWARENESS OF EGREGIOUS VIOLATIONS OF THE PUBLIC TRUST BY THE CLEARING AND SETTLING SYSTEM, AND THE CAPTIVE REGULATORS THAT CONDONE THIS MISBEHAVIOR.

3. Not many individuals get to be on conference calls of major companies and express their views, as you did in January on the Overstock call. How did that feel?

IT’S ALWAYS NICE TO GET AN OPPORTUNITY TO AIR ONE’S VIEWS, ESPECIALLY GIVEN THE AUDIENCE - A TRANSCRIPT IS AVAILABLE AT NCANS.NET IF YOU NEED IT. I NOTE WITH INTEREST THAT NO ONE HAS SHOWN MY ANALYSIS OF THE “ANATOMY OF A MANIPULATION” TO BE INCORRECT. IN FACT, THE ONLY RESPONSES HAVE BEEN CAREFULLY CRAFTED WORDSMITHINGS FROM HEDGE FUND MANAGERS WITH THEIR OWN BLOGS, WHO ARE FRIENDS OF OR ASSOCIATES OF HERB AND MARC AND DAVID. AND THOSE DON’T ADDRESS THE SUBSTANCE; MERELY ATTEMPT TO RIDICULE THE ANALYSIS AWAY. I DON’T BLAME THEM. I THINK THAT MARKED AN IMPORTANT POINT – THE FIRST TIME THAT FLAVOR OF MANIPULATION WAS DESCRIBED IN SOME DETAIL, SO THAT THE LAYPERSON COULD UNDERSTAND THE COLLUSIVE ELEMENTS. I HAVE YET TO SEE A DEBUNKING. HAVE YOU?

4. When did you first invest in Novastar? How did you first hear about the company?

I FIRST HEARD ABOUT NFI AFTER HAVING INVESTED SUCCESSFULLY IN ANOTHER MREIT, AND WHILE SCREENING FOR HIGH YIELDING MEMBERS OF THE SAME ASSET CLASS. I THINK I BOUGHT THE FIRST SHARES IN DECEMBER OF 2002.

5. About how many Novastar shares do you own? What percentage of your net worth is that?

AT ONE POINT I HAD MY ENTIRE NET WORTH IN NFI. THAT CHANGED DUE TO MARGIN CALLS AND A MORE CONSERVATIVE STANCE TO ACCOMODATE THE MANIPULATED SWINGS TO THE DOWNSIDE. THE REG SHO LIST IS PROOF THAT SOMETHING BAD IS GOING ON WITH THEIR TRADING – IT HAS BEEN ON THE LIST SINCE DAY ONE – SOMETHING THAT WOULD BE IMPOSSIBLE IF THE RULES WERE BEING ENFORCED. ANY PLANS ON AN ARTICLE ABOUT THAT?

6. I know you are worried about threats. Have there ever been any threats against you because of your anti-naked shorting activities? Would you detail those for me?

THE CONCERNS ABOUT MY ANONYMITY FAR PREDATE MY INVOLVEMENT IN NAKED SHORT SELLING. I WON’T DISCUSS THOSE MUCH (ON ADVICE OF COUNSEL), HOWEVER THE THREATS ARE ANONYMOUS, PREDICTABLY INVOLVE REVEALING MY REAL IDENTITY, INVADING MY PRIVACY USING ILLEGALLY OBTAINED INFORMATION, AND GENERALLY USING AD HOMINEM APPROACHES TO RUINING MY LIFE. JUST AS DAVE PXXXX HAD PHOTOS OF HIS WIFE AND HIS CAR POSTED ANONYMOUSLY, IN AN EFFORT AT INTIMIDATION. ANY OF THAT SOUND FAMILIAR? HEY, I KNOW, IN THE COURSE OF YOUR INVESTIGATION ON ME, HAVE YOU RECEIVED ANY INFORMATION THAT YOU FEEL MIGHT BE ILLEGALLY OBTAINED, FROM SOURCES YOU OF COURSE CAN’T REVEAL? YOU KNOW, THINGS LIKE TELEPHONE NUMBERS THAT ARE IMPOSSIBLE TO LEGALLY OBTAIN, BANK DATA, ETC.? LET’S START THERE, AND FOLLOW THAT TO ITS INEVITABLE CONCLUSION – YOU MAY WANT TO GET A LAWYER FIRST, THOUGH. I’VE GOT TIME, AND WILL AWAIT YOUR RESPONSE WITH CONSIDERABLE INTEREST AND PREPARATION. I TRUST THAT WILL BE PRODUCTIVE.

7. How did you choose the name "Bob O'Brien"? CNBC HOST – A GAG. LIKE CHEETAH’S.

8. I understand you are self-made and retired. How much of your time is spent investing? How did you build your wealth?

I MADE MOST OF MY MONEY BY INVESTING IN PRIVATE AND PUBLIC OPPORTUNITIES. I SPEND MOST OF MY TIME INVESTING, I SUPPOSE, ALTHOUGH SINCE BEING OVERWEIGHTED IN NFI MOST OF MY TIME IS SPENT IN PROVIDING MARKET COMMENTARY AND TACKLING WHAT I PERCEIVE TO BE INEQUITIES IN THE MARKET OR THE SYSTEM.

9. Other than sailing, do you have any other hobbies or interests?

I ACTUALLY DON’T LIKE SAILING, BUT IF THE HAT THING WORKS FOR YOU…I LIKE TO WRITE – HAVE ACTUALLY WRITTEN A GRISHAM-TYPE FICTION NOVEL PREDICATED ON A VENGEFUL, CROOKED HEDGE FUND MANAGER WITH CRIMINAL TIES WHO USES HIS CONTACTS IN THE MEDIA TO PERSECUTE A GUY THAT DEVELOPS A WEBSITE TO EXPOSE HIS DIRTY DEEDS. IT’S A GOOD READ, MOVES WELL, THE INVESTORS ARE A WHO'S WHO OF CRIMINAL SYNDICATES, AND THE PLAYERS BELIEVE THEMSELVES TO BE ABOVE THE LAW DUE TO THEIR POLICTICAL CONNECTIONS. AM DEBATING GETTING A LITERARY AGENT OR JUST SELF-PUBLISHING TO CAPITALIZE ON ALL THE ATTENTION “I” SEEM TO BE GETTING.

10. Do you own stock in Overstock.com?

I OWNED OPTIONS FOR HALF A YEAR OR SO. LOST MONEY ON THEM WHEN THE PRICE DROPPED, IN SPITE OF THE COMPANY'S PROFITABILITY. I INVESTED IN THEM BECAUSE I LIKE AND RESPECT THE OPINION OF THEIR CEO, AND BELIEVE THAT A GOOD DISCOUNT ONLINE RETAILER IS FOLLY TO BET AGAINST. I MAY BUY SOME MORE AS WE APPROACH THE HOLIDAYS AGAIN – RETAILING, THE HOLIDAYS, SORT OF GO TOGETHER.

12 How did you decide to create the NFI Info site?

I GOT TIRED OF THE VOCATIONALLY DILIGENT CLOGGING OF THE YAHOO MESSAGE BOARD BY TEAMS OF BASHERS, WHOSE ONLY OBJECTIVE WAS TO DISRUPT THAT FORUM AND RENDER IT USELESS AS A COMMUNICATION TOOL. IT STARTED BY ME TAKING SOME OF HHILL’S POSTS AND CONSOLIDATING THEM INTO A RESOURCE THAT WAS RANDOM ACCESS, THUS NON-DISRUPTABLE, AS OPPOSED TO THE CONTIGUOUS STREAM THAT THE BOARDS REPRESENT. IT HAS SINCE MORPHED INTO THE BEAST THAT IT REPRESENTS TODAY, WHICH IS THE LARGEST AND MOST COMPLETE SITE OF ITS KIND THAT I KNOW OF.

13. Are you still 44 years old?

WAIT A MINUTE – YOU KNOW THE GUY’S BOAT GUY’S NAME, BUT NOT HIS BIRTHDAY? IF HE’S SUPPOSED TO BE 44, AND WAS NOW 41…NOW THAT WOULD BE A STORY.

14. When did you become concerned about naked shorting? How did you find out about it?

IT FIRST CAME TO MY ATTENTION AFTER THE WSJ PRINTED ITS BADLY COMPROMISED ARTICLE ABOUT NFI ON APRIL 12 OF 2004 – I COULDN’T UNDERSTAND THE TRADING VOLUMES WE WERE SEEING. IT WENT FROM SUSPICION TO CONFIRMED FACT WHEN SHO WAS PUBLISHED IN DECEMBER OF 2004 (IN PRELIMINARY FORM). UNTIL THEN, IT WAS MOSTLY GUESSWORK AS THERE WAS NO EMPIRICAL EVIDENCE TO BE HAD. IT BECAME FACT THEN, AND MY EMPHASIS SHIFTED.

15. I understand you made a Feb. 4 donation to NCANS of $XXXX into (sic – should be from) Peoria, Ill., Merrill Lynch brokerage account # XXXXX in the name of XXXXXXXXXXX, Inc. Is that correct? Have you made any other donations to NCANS?

NCANS DONATED MONEY TO MERRILL, OR SOME COMPANY? REALLY? HUH. WONDER WHY? OR ARE YOU SAYING THAT THIS XXXXXX COMPANY DONATED TO NCANS OUT OF THAT ACCOUNT? I THINK THAT’S WHAT YOU MUST MEAN. NO COMMENT AS IT SPEAKS TO IDENTITY. THAT DOES SEEM INTERESTING TO ME IN THE SENSE THAT IT WOULD APPEAR TO BE PRIVILEGED INFO, IF YOU ARE TRYING TO SAY THAT ACCOUNT DONATED TO NCANS, AS IT WOULD HAVE HAD TO HAVE GONE TO THE ATTORNEY CLIENT TRUST ON THE NCANS SITE, AND FURTHER APPEARS TO BE PRIVATE BANK INFO - SOMETHING THAT IF I’M CORRECT, WOULD CONSTITUTE A VIOLATION OF FEDERAL BANKING LAWS IN HAVING OBTAINED. CARE TO EXPLAIN HOW YOU HAVE THAT INFO WITHOUT HAVING COMMITTED A FELONY, OR HAVING ACTED AS AN ACCESSORY TO A FELONY, I,E, USING INFO THAT ONLY COULD HAVE COME FROM AN ILLEGAL SOURCE? CAN THE ATTORNEYS AT THE WSJ EXPLAIN HOW YOU COULD HAVE THAT INFO WITHOUT HAVING VIOLATED FEDERAL LAW, OR BEING FED INFO FROM SOMEONE THAT HAS? THOSE SEEM LIKE PRETTY GOOD QUESTIONS TO ME. COMMENTS?

16. Can you tell me a bit about XXXXXXXXX Corp. and XXXXXX Technologies Inc.? What kinds of business did they conduct? What was your role at these companies?

ASKED AND ANSWERED – THE NAMES ARE NOT INVOLVED IN NCANS OR NFI, ARE THEY? IF SO, HOW?

17. DXXXXXX was incorporated through an agent named James XXXXX. Have you met Mr. XXXXXX? Have you done any other business with Mr. XXXXX besides working with him on the loan to XXXXXX? If yes, what was it?

I HAVE NO IDEA WHO YOU ARE TALKING ABOUT. I DON’T THINK I’M LETTING THE CAT OUT OF THE BAG ON THAT ONE. YOU ARE GOING DOWN A FRUITLESS PATH.

18. Did you meet BXX MXXXXXX, the founder of XXXXXXXX, at any point? Did you ever have a discussion with Mr. XXXXXX about Novastar, naked shorting or NCANS? Has Mr. XXXXXX donated to NCANS?

I WOULD SUGGEST THAT IF YOU HAVE QUESTIONS ABOUT A DIFFERENT COMPANY OR INDIVIDUAL, YOU ASK THEM, NOT ME. HOW ARE THEY RELEVANT TO NFI OR NAKED SHORTING OR NCANS? I’LL CHECK WITH MARY AND THE ATTORNEY THAT ADMINISTERS NCANS, BUT I DON’T BELIEVE THAT ANYONE BY THAT NAME HAS SENT NCANS ANY MONEY. WHY – DOES HE WANT TO? WE CAN ALWAYS USE A FEW MORE DOLLARS TO DO GOD’S WORK.

19. Have you ever discussed Novastar with Mr. XXXX (an attorney)? Have you discussed naked shorting or NCANS with Mr. XXXX?

ASKED AND ANSWERED = IT WOULD SPEAK TO MY IDENTITY, AND WOULD FURTHER VIOLATE ATTORNEY/CLIENT PRIVELEGE, IF HE WAS MY ATTORNEY. IS THERE SOME SIGNIFICANCE TO MR. XXXX THAT I NEED TO BE AWARE OF? WHY BEAT AROUND THE BUSH – IS HE NOW WITH NFI?

20. Have you ever met Mr. XXXX's partner, MXXX XXXX? Have you discussed naked shorting, Novastar or NCANS with Mr. XXXXX?

ASKED AND ANSWERED. SPEAKS TO MY IDENTITY, I PRESUME, AND THUS IS NOT SOMETHING I WILL COMMENT ON. ALTHOUGH WOULD IT BE BAD TO HAVE DISCUSSED NAKED SHORTING, OR NCANS, OR NFI, WITH HIM, AND IF SO, WHY, SPECIFICALLY? JUST CURIOUS.

21. Have either Mr. XXXX or Mr. XXXX or anyone from (Law Firm Name) ever provided you with information or analysis on Novastar?

NOBODY FROM THAT FIRM HAS EVER PROVIDED ME WITH ANY INFORMATION OR ANALYSIS ABOUT NFI, UNLESS THEY ARE ONE OF THE CONTRIBUTING POSTERS (BOVINE, INVESTOR AND TRADER, ABOUT 5 OR 6 OTHERS) WHOSE IDENTITIES ARE NOT KNOWN TO ME. ARE THEY ONE OF THOSE? ASSUMING NOT, THEN NO.

22. How many Nevada corporations have you set up or have been affiliated with? I have a list of your affiliations that includes: XXXXXXXX LLC; YYYYYYYYY LLC; ZZZZZZZZZZ Inc.; AAAAAA Inc.; BBBBBBBBBB Inc.

WHY WOULD ANY COMPANY FORMATION BE OF INTEREST, PRESUMING I AM INVOLVED IN ANY OF THOSE? ARE THEY PUBLIC? NAKED SHORTED? UP TO NO GOOD? WHICH ONES, AND HOW? AGAIN, I’M CURIOUS. WHY SHOULD I, OR ANYONE, CARE? Are those correct? Have I missed any? Could you tell me what these corporations were set up for? I understand that ZZZZZZZ's had a sandwich shop, for instance. THAT’S A RELIEF – THE WHOLE ZZZZZZZz’S THING, SO CLOSELY TIED TO CHEETAH’S, HAD ME WORRIED…SO HOW DO SANDWICHES TIE INTO NAKED SHORT SELLING OR NFI, PRECISELY?

23. XXXXl, you have a history of involvement in what some would call the penny stock world, having lent money to XXXXXXXX. Some critics and short-sellers would consider it ironic that you see yourself as a champion of the little guy when you have been a lender to a penny stock. How would you respond to that?

YOU MENTIONED XXXXXX BEFORE, AND I WILL TAKE YOUR WORD FOR IT THAT THEY WERE A PENNY STOCK. HOW WOULD LENDING MONEY TO XXXXXX INVOLVE ME IN SOME WAY IN THE SEEDY WORLD OF PENNY STOCKS, OR PRECLUDE ME FROM BEING THE CHAMPION OF THE LITTLE GUY, OR MORE ACCURATELY SOMEONE WHO IS AN OUTSPOKEN OPPONENT OF ILLEGAL TRADING MECHANISMS USED BY HEDGE FUNDS? IF I LEND MONEY TO PARTY X, AND THEN HAVE TO SUE TO GET IT BACK, HOW AM I SUDDENLY “INVOLVED” IN THE PENNY STOCK WORLD (PRESUMING THAT WAS ME)? ARE YOU SERIOUS WITH THIS STUFF? REALLY?

25. XXXX, some people think that your view that certain reporters, such as Herb Greenberg and Liz MacDonald, are tools of hedge funds is extreme. How do you respond to such a view?

WELL, AS I PERUSE THE 30 SOMETHING NEGATIVE PIECES HERB WROTE IN ONE YEAR ABOUT NFI, I WONDER ALOUD AS TO HIS MOTIVATION TO COVER AN OBSCURE MREIT WHOSE ACCOUNTING HE DOESN’T EVEN UNDERSTAND. HE ALSO SEEMS TO COVER A LOT OF RP SHORT PLAYS. DO YOU HAVE AN EXPLANATION FOR THAT? AS TO LIZ, I THINK HER RECORD OF SHORT AT $40, COVER AT $20 SPEAKS FOR ITSELF – THAT WAS PRE-SPLIT NUMBERS, AND NFI HAS NOW PAID MORE THAN THAT $10 JUST IN DIVIDENDS. DO YOU FIND IT IMPOSSIBLE TO BELIEVE THAT WELL-CONNECTED HEDGE FUND MANAGERS ARE ABOVE HAVING REPORTERS PURSUE THEIR AGENDAS FOR THEM? CARE TO CIRCLE BACK TO THE BANKING RECORD QUESTIONS? OR WANT TO READ THE LATEST BARRON’S FROLIC ABOUT GETTING TO KIDNAPPING OR KILLING FROM “HOW’S THE WEATHER”? ARE YOU GOING TO TRY TO TELL ME THAT THIS IS NEWS, BUT THE GRANDFATHERING OF ALL FAIL TO DELIVERS THROUGH JANUARY OF 2005 ISN’T? WHAT COLOR SHIRTS I FAVOR – NEWS. ENTIRE US FINANCIAL SYSTEM IN JEOPARDY – NOT NEWS. GOT IT.

25. Some investors and short-sellers believe you conceal your identity because of your connections to Novastar and your past penny-stock history. What kind of validity do those assertions have, if any?

WHICH INVESTORS? RXXXR PARTNERS? AGAIN - I HAVE NO CONNECTION TO NFI. THERE IS NONE. I HAVE NO PAST PENNY STOCK HISTORY, AND HAVEN’T INVESTED IN ANY (DID “I” EVER OWN ANY XXXXXXXXXX STOCK THAT “I” BOUGHT AND LATER SOLD? YES? NO? YOU DON’T KNOW, AND ARE ATTEMPTING TO USE THE DECLARATIVE TO MASK YOUR LACK OF SUBSTANCE?) – I CAN APPRECIATE THAT YOU ARE ATTEMPTING TO CREATE CONNECTIONS WHEREIN NONE EXIST, AND ONLY HAVE A “HISTORY” THAT APPEARS TO AMOUNT TO LENDING SOME MONEY AND THEN SUING SOMEONE TO GET IT BACK – BUT THAT MERELY CONFIRMS MY INITIAL TAKE ON YOUR AGENDA, WHICH IS TO DO A HATCHET JOB ON ME AND TRY TO LINK ME TO SOMETHING UNTOWARDS.

27. After you published personal information about Marc Cohodes's family, you wrote: "I realized that I had crossed an ethical line when I posted Marc's address on the Yahoo boards." But then you followed that up the next day with a seeming change of heart: "There was no threat, in either a legal sense, or a moral sense." and added: "I am now too big a threat to their activities. And they want me silenced, at any cost, or smeared to the point where the message is ignored. Good luck with that." Do you still think you crossed an ethical line or do you think you were justified in publishing his address and the names of his wife and son?

I BELIEVE THAT MY APOLOGY IS COMPLETE. I FEEL THAT I CROSSED A LINE, THAT WAS NOT A LEGAL OR MORAL THREAT LINE, BUT RATHER A STOOPING TO THE LEVEL OF MY ADVERSARIES LINE. I PUBLISHED AN ADDRESS, WITHOUT ATTRIBUTION. THIS IS TIRED NEWS, IF IT EVER WAS, AND MY POSITION IS PRETTY CLEAR TO ANYONE THAT CAN READ. I DO BELIEVE THAT I PRESENT ONE OF THE SINGLE LARGEST THREATS TO THIS PARTICULAR VARIANT OF ILLEGAL STOCK MANIPULATION, HENCE ALL THE INTEREST IN LITTLE OLD ME AND TRYING TO HANG SOMETHING UGLY ON ME.

28. Has anyone from NovaStar provided information or analysis to you about the company and its operations?

NO, OR WE WOULD HAVE GOTTEN MORE OF IT CORRECT AT THE OUTSET – SOME OF WHAT WE THOUGHT WAS THE WAY THE COMPANY WORKED TURNED OUT TO BE INCOMPLETE OR INCORRECT. EVEN NOW WE GET CORRECTIONS. I HAVE CALLED INVESTOR RELATIONS ON NUMEROUS OCCASIONS AS AN ANONYMOUS CALLER, IN ORDER TO GET THE OFFICIAL SPIN ON AN EVENT OR QUESTION A NUMBER, BUT I NEVER ANNOUNCED MYSELF AND HAVE TAKEN GREAT PAINS TO AVOID ANY CONNECTION, ALTHOUGH I PRESUME FROM YOUR SIX DEGREES OF SEPARATION TONE YOU FEEL THAT YOU HAVE A CONNECTION – I WOULD POSIT THAT I AM ONE DEGREE OF SEPARATION FROM DAVID ROCKER, MARC COHODES, WARREN BUFFET, AND THE POPE, SO UNLESS YOU HAVE NFI ANY CLOSER THAN THEY ARE YOU HAVE NOTHING OF SUBSTANCE, AND YOU SOUND SMART ENOUGH TO KNOW IT.

I know these are a lot of questions. I hope you will respond to them. If you change your mind and want to discuss some answers by phone or get some clarification, I am available as always:

212-XXX-XXXX.

JESSE, YOU HAVE A PROBLEM. YOU HAVE A FEW THREADS, A GUY WHO KNOWS A GUY WHO KNOWS A GUY WHO IS PRESUMABLY CONNECTED TO NFI – AND A LOAN TO SOMEBODY THAT WOUND UP HAVING TO GO TO COURT TO GET REPAID. THAT’S IT. THAT’S WHAT YOU HAVE, AFTER OVER A MONTH. IT’S THIN, YOU HAVE TO ADMIT.

I, ON THE OTHER HAND, HAVE QUITE A FEW THINGS. AMONG THEM ARE:

1) MARK CXXXX SENDING ME EMAILS A MONTH AGO (AROUND A WEEK AFTER YOU STARTED DIGGING) AS WELL AS TO OTHERS, SAYING HE THOUGHT I WAS “XXXX”. YOU NEVER ADDRESSED THAT. PLEASE DO. IT SPEAKS TO YOUR CREDIBILITY AND WILL SURELY BECOME A BIG ISSUE WHEN YOUR ARTICLE BREAKS – HE REALLY IS NEWS, OF A SORT. IT BEGS ALL SORTS OF INTERESTING QUESTIONS AS TO HOW HE GOT THAT INFO SO QUICKLY, WHETHER IT CAME FROM YOU, OR THE INFO TO YOU CAME FROM HIM, OR WHETHER THE NETWORK OF HEDGE FUNDS WERE SHARING INFO, TO WHICH WE CAN TURN OUR ATTENTION IN THE NEXT POINT.

2) YOU HAVE WHAT APPEARS TO ME TO BE CONFIDENTIAL BANKING RECORDS/INFORMATION. I’M NO EXPERT, BUT THAT WOULD APPEAR TO BE A VIOLATION OF NCANS’ PRIVACY, ATTORNEY CLIENT PRIVELEGE, AND FEDERAL BANKING LAWS. THAT IS DEEP WATER, AND YOU REALLY NEED A GOOD EXPLANATION AS TO HOW YOU OBTAINED IT, AND FROM WHOM – JOURNALISTIC PRIVILEGE DOES NOT PROTECT FELONIOUS BEHAVIOR, THAT I AM AWARE OF, AND IT HAS JUSTIFIABLY MADE ME VERY CONCERNED ABOUT MY PERSONAL SAFETY NOW, AND INTO THE FUTURE (IT SERVES AS A CONFIRMATION THAT THE LAW IS NOT A PROTECTION FROM THE BAD GUYS).

3) YOUR PREVIOUS, SINCERE SOUNDING EMAILS MAKE IT SEEM AS THOUGH MY ISSUE WITH YOU, THAT I SUSPECTED YOU WERE ATTEMPTING TO DO A HATCHET JOB, WAS ERRONEOUS. AFTER A MONTH, WE NOW HAVE VIOLATIONS OF BANKING LAW, HEDGE FUND CONNECTED BILLIONAIRES CONFIRMING THEIR INVOLVEMENT IN YOUR INVESTIGATION (AND AGAIN, NOT JUST TO ME), AND WHAT AMOUNTS TO A SIX DEGREES OF SEPARATION ARGUMENT, AND A LOAN.

NOW LET’S TRY THIS AGAIN: HOW DID CXXXXX KNOW WHO YOU THOUGHT I WAS OVER A MONTH AGO, HOW HAVE YOU OBTAINED FEDERALLY PROTECTED BANKING INFO AS WELL AS PHONE RECORDS (FROM A COLLEAGUE WHO INDICATED YOU CALLED ON HIS PRIVATE LINE, ONLY GIVEN TO HIS WIFE AND HIS FISHING BUDDIES – ALSO A FEDERAL VIOLATION, BTW, AND ACTIONABLE), AND WHY ARE YOU SO INTERESTED IN CREATING A STORY OUT OF PHANTOMS? TRY ANSWERING THESE SIMPLE QUESTIONS AND PERHAPS WE HAVE A DIALOG.

MY TAKE ON IT IS YOU HAVE NOTHING, ARE TRYING TO COBBLE TOGETHER SOMETHING, AND BASICALLY HAVE DUG UP A GUY THAT HASN’T DONE ANYTHING BAD, SO YOU ARE GOING TO TRY TO CALL MAKING A LOAN “BEING INVOLVED IN PENNY STOCK WORLD” AND KNOWING A GUY WHO KNOWS A GUY WHO KNOWS A GUY A “CONNECTION”.

DID I LEAVE ANYTHING OUT? DO YOU REALLY BELIEVE ANYONE ISN’T GOING TO BE MORE INTERESTED IN MY QUESTIONS THAN IN YOURS? THINK ABOUT IT. THERE’S NO STORY HERE. SO WHY ALL THE ATTENTION? MAKES ONE GO HMMMMM, AS ‘TWERE. HOPE YOU GOT LUCKY IN VEGAS.

2 Comments:

Blogger rvac106 said...

Sir Bob,

I believe that if you were to supply to some of the mOtherboard regulars an untraceable phone number, we would be very happy to call JE and say to him; "Hi, I'm Bob O'Brien. Did you have some questions for me?" We all know how to say "no comment," or I'll not be answering any questions that relate to my identity," or, "How DID you ever get those priveledged records?" With a protective veil (no caller ID,) it'd be an honor to be you for a moment in time.

Sincerely,

RVAC

12:57 PM  
Anonymous generic cialis 20mg said...

Hello, I do not agree with the previous commentator - not so simple

9:24 PM  

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