Possibly the biggest single â€œa-ha!â€ moment Iâ€™ve had while writing this blog came in late January of 2007, when I discovered that one week earlier, Gary Weiss had edited Wikipedia while logged in to a computer on the network of the Depository Trust & Clearing Corporation (DTCC).
The basis for that conclusion is explained here.
This may not seem like a big deal to most, but it turned out to be a huge deal to those of us who had spent a full year enduring Weissâ€™s attacks without any clear understanding of his motivation.
We knew his aim was to discredit and marginalize high profile opponents of illegal naked short selling. Yet his book, which seemed to be the launch pad of Weissâ€™s campaign, was quite critical of both hedge fund and prime broker culture: the two obvious sides of the naked shorting equation.
So who was paying Weiss to spend all day, most every day, publishing his attacks via his blog, message boards, and Wikipedia?
Nobody had ever considered the DTCC.
But once we knew Weiss had used a DTCC computer â€“ given the uniquely Fort Knox-like nature of the institution, and the fact that it could not have happened unless Weiss had official access â€“ everything fell into place.
Suddenly, we noticed a very striking set of coincidences, commencing January 22, 2006.
On that date:
- Roddy Boyd, then business writer at the New York Post, published his review of Weissâ€™s book Wall Street Versus America (an unheard-of six weeks before the book would be available in print). In his review, Boyd writes:
“The most provocative argument in Weiss’ book is that naked shorting â€” or short-selling a company’s stock without being able to borrow it first, per long standing rules â€” is not only a good idea, but a necessary one…This is guaranteed to send Overstock CEO Patrick Byrne and the other disciples of his "stop naked short-selling crusade" â€” Weiss dismisses the lot of them as the "Baloney Brigade" â€” into further spasms.”
- Weiss published the first naked short selling-related post on his week-old blog.
- Weiss Yahoo! Finance message board IDs lamborghini751, cupandsaucerwithsugar, and baloneysmasher were created and immediately put to use attacking opponents of illegal naked short selling.
- One day later, DTCC issued the first of what would be eight naked short selling-related media releases over the next seven months. By way of comparison, during the seven months prior to January 23, 2006, DTCC issued zero releases on the topic.
Further examination made it clear that Weiss had an unusual relationship with those DTCC media releases, in that Weiss would promote them via his blog, stock message boards and Wikipedia articles in a rather systematic way, often long before anybody else was even aware of them.
Hereâ€™s an example:
Taking all these factors together, Iâ€™ve concluded that January 22, 2006 represents the beginning of an aggressive public relations campaign by DTCC, aimed at countering a growing perception that the organization is a key enabler of illegal naked short selling. I further conclude that a that time, Gary Weiss was operating in support of that effort and likely remains so today.
I requested a comment of DTCC spokesman Stuart Z. Goldstein â€“ the likely architect of the above-mentioned PR campaign â€“ but received only two strange responses, neither of which addressed my question.
When I persisted in asking Goldstein for comment, his came â€“ and I cannot overstate how shocked I remain by this even today â€“ from reporter Roddy Boyd, then of the New York Post.
From: Boyd, Roddy
Date: Feb 09 2007 – 1:03pm
I spoke to corp comm at DTCC and they told me, on the record, that weiss is not, nor has he ever, been employed or used by DTCC in any capacity, formally or informally. They categorically reject it and tell me that none of them have any recollection of ever talking to him, meeting with him or having any dealings with him.
categorically rejects it.
thats a big hump for a real reporter to get over.
let me put this politely:
As an investigative reporter, laughably per PB, you really,really are a much better PR person
In case youâ€™ve forgotten, it was Roddy Boydâ€™s six week premature review of Weissâ€™s book, published January 22, 2006, that seems to have been the launching point of the DTCCâ€™s PR campaign, described above.
For his part, Weiss called my conclusions of a relationship between him and DTCC a â€œmalicious lieâ€ and â€œabsolute crap.â€
At that point, I had a ton of circumstantial evidence pointing to DTCC as Weissâ€™s patron, and direct proof that Weiss had used a computer on DTCCâ€™s network.
I also had the strangest denial, on the part Stuart Goldstein at DTCC, that Iâ€™ve ever seen.
But most importantly, I had the benefit of an extremely low-set hurdle to cross in order to prove that Weiss, Boyd and Goldstein were all engaged in a ridiculous lie.
After all, as Goldstein said through Boyd, nobody at DTCC has â€œany recollection of ever talking to [Gary Weiss], meeting with [Gary Weiss] or having any dealings with [Gary Weiss].â€
What follows is the story of how weâ€™ve sailed over that particular hurdle, thanks to some emails from Gary Weiss to paid stock message board basher Floyd Schneider. (Read this to learn how I came to posses these emails).
In addition to being the month in which DTCC launched its PR campaign against opponents of naked short selling, January of 2006 is also a significant time in that Mark Mitchell, then assistant managing editor of the Columbia Journalism Review, started work on what would go on to become The Story of Deep Capture.
Back then, as now, Gary Weiss seemed to be about the only non-pseudonymous person willing to go on the record in defense of naked short selling, which naturally made him a frequent point of contact for Mitchell.
Mitchell recalls as many as a dozen conversations with Gary Weiss in the first couple of months working on the story. In several of those conversations, Mitchell remembers Weiss awkwardly seeking to gauge Mitchellâ€™s opinion of any recently-published DTCC media releases.
Among the topics Mitchell discussed with Weiss was Dr. Susan Trimbath, a former DTCC employee turned outspoken critic of that organizationâ€™s role in enabling illegal naked short selling. Mitchell recalls being surprised by how much the subject of Trimbath seemed to bother Weiss.
Given that bit of background, consider the following email exchange between Gary Weiss and Floyd Schneider.
It starts on March 13 at 9:41 AM, when Floyd emails Weiss a reference to a speech Dr. Trimbath had given a few months earlier.
To this, Weiss replies:
Subject: Re: (no subject)
Date: Mon, 13 Mar 2006 09:49:27 -0500
Received: from unknown (HELO maincomputer) (email@example.com@126.96.36.199 with login) by smtp101.vzn.mail.dcn.yahoo.com with SMTP; 13 Mar 2006 14:49:22 -0000
Say, what is with this Trimbath? I ask because a particularly dimwitted reporter for Columbia Journalism Review is doing a story on media coverage that is widely expected to lean toward the balonies, and he is relying heavily on her.
Floyd immediately begins to pepper Weiss with every googled reference to Trimbath he can find â€“ all of them quite positive â€“ to which Weiss replies:
Subject: Re: (no subject)
Date: Mon, 13 Mar 2006 10:49:12 -0500
Received: from unknown (HELO maincomputer) (firstname.lastname@example.org@188.8.131.52 with login) by smtp103.vzn.mail.dcn.yahoo.com with SMTP; 13 Mar 2006 15:49:08 -0000
Yeah, all pretty innocuous, which is she is a perfect front woman. I presume she expects to cash in as an expert witness or somesuch for the balonies.
The next day, DTCC issued a media release attacking Trimbathâ€™s expert status and minimizing the importance of the position she held there.
The day after that, Weiss places a standing order with Floyd for any negative information on Dr. Trimbath he can find (searching for this sort of information is how Floyd spends an alarming portion of his days, by the way):
Subject: Re: Aha!
Date: Wed, 15 Mar 2006 13:38:35 -0500
Received: from unknown (HELO maincomputer (email@example.com@184.108.40.206 with login) by smtp101.vzn.mail.dcn.yahoo.com with SMTP; 15 Mar 2006 18:38:29 -0000
Incidentally this Susanne Trimbath is the primary source of info on nekkid shorting for a complete idiot who is wriiting a story for the Col. Journalism Review. If you can think of anything particularly wacky that she has said, let me know.
A few minutes later, Floyd responds with something fairly unremarkable, to which Weiss replies:
Subject: Re: Aha!
Date: Wed, 15 Mar 2006 13:47:54 -0500
Received: from unknown (HELO maincomputer) (firstname.lastname@example.org@220.127.116.11 with login) by smtp103.vzn.mail.dcn.yahoo.com with SMTP; 15 Mar 2006 18:47:49 -0000
You know, the thing that is bad is that this statement below would not be considered extreme by the doofus doing this article for CJR. Several of us are concerned that it is going to be a total baloney-piece. He is a real ham bone.
After Floyd sends still more non-scandalous Trimbath references, Weiss replies:
Subject: Re: Aha!
Date: Wed, 15 Mar 2006 14:00:54 -0500
Received: from unknown (HELO maincomputer) (email@example.com@18.104.22.168 with login) by smtp103.vzn.mail.dcn.yahoo.com with SMTP; 15 Mar 2006 19:00:49 -0000
It has to be something fairly extreme. This guy really has me (and others of us a lot more than me) worried. I’ve drummed into this nitwit’s head about O’Baloney and it all just bounced off his concrete skull.
About an hour later, Floyd sends the prior dayâ€™s DTCC media release to Weiss, prompting this reply:
Subject: Re: the whole article with link
Date: Wed, 15 Mar 2006 15:09:17 -0500
Received: from unknown (HELO maincomputer) (firstname.lastname@example.org@22.214.171.124 with login) by smtp103.vzn.mail.dcn.yahoo.com with SMTP; 15 Mar 2006 20:09:12 -0000
Yes I sent this to the bozo at CJR earlier today. The jerk emailed back indicating that he is chewing away at baloney. Very depressing.
In his emails to Floyd, Weiss makes it clear that heâ€™s involved in active consultations with other individuals, who feel deeply concerned about the prospect of Dr. Trimbathâ€™s influence on Mitchellâ€™s story.
Because Dr. Trimbath addresses illegal naked short selling almost exclusively from the standpoint of the DTCCâ€™s role, itâ€™s very difficult to imagine that, when Weiss refers to â€œSeveral of usâ€ and â€œothers of us,â€ heâ€™s not referencing officials at DTCC.
Armed with these emails as confirmation that Goldstein was not being honest, when he stated, through Roddy Boyd, that he â€œcategorically rejectsâ€ the idea that anybody at DTCC has so much as spoken with Gary Weiss, I again asked Goldstein for a comment.
Goldstein refused to answer the question.
UPDATE: Roddy Boyd responds to points raised above.