After I published the audio of the interview, somebody posted a link to it on the Yahoo Finance message board dedicated to Overstock.com.

Seeking the origin of the resulting surge in downloads led to my first stock message board visit.

It was really strange.

What first struck me was the flurry of responses to the original posts in which users with foul mouths and bad attitudes warned that the linked mp3s contained computer viruses.

Of course, no mp3 has ever carried a virus, as I’m fairly certain the posters knew.

These were followed up by all manner of lies meant to discourage others from listening to any of the three Byrne interviews I would eventually publish.

Worse, they posted all manner of lies about Patrick Byrne personally – something I was in a unique position to recognize having just interviewed him at length.

Intrigued, I started examining the posting histories of the most prolific sources of this disinformation, trying to identify patterns that might in turn reveal their underlying motives and, often enough, their real identities.

Well over two years later, I remain engaged in the same pursuit. And, to be frank, I suspect that by now, I understand it better than anybody else, largely because of a few methods I’ve developed and the great amounts of information I’ve received from others.

What follows is a little bit about what I’ve learned.

First: just as there are dishonest people paid to post lies on stock message boards for the purpose of artificially boosting share prices, there are also bad people paid to post lies on stock message boards for the purpose of artificially lowering prices.

In the case of the latter, they are either paid outright as contract “stock researchers”, or paid in put options (which increase in value as a company’s stock drops in value).

Second: make no mistake, it’s short-biased hedge funds who are paying these stock “bashers” (as they’re often called).

Third: in some cases, it’s actually the managers of these short-biased hedge funds doing the bashing.

Consider the following notable example.

I’ve previously written about evidence received demonstrating that hedge fund Third Point, LLC contracted with convicted stock fraudster Michelle McDonough, whose duties included coordinating the efforts of message board bashers and inducing certain captured journalists to report negatively on targeted companies.

I’ve also written about Third Point founder Daniel Loeb’s well-known history of posting on the Yahoo and Silicon Investor stock message boards under the alias Mr. Pink.

Before getting to the rest of the story, here’s some background.

About the same time I first visited Yahoo Finance, a company called SFBC International (now PharmaNet Development Group) came under a blistering attack by Daniel Loeb, who very publicly announced Third Point’s sizeable short interest in the company.

SFBC got hit from all sides, and its share price withered.

In particular, there was a deluge of libelous (though tame compared to others I’ve seen) posts to Yahoo’s SBFC message board. Most notable were the attacks leveled against then-SFBC Chairwoman and President Lisa Krinsky.

Krinsky responded by filing a lawsuit against ten anonymous posters: Does 1 through 10.

In order to discover the identities of the ten Does, Yahoo was served with a subpoena.

In accordance with policy, Yahoo alerted the posters, giving them two weeks in which to contest the subpoena – an expensive proposition few bashers have the financial ability to pursue.

And indeed, none of the ten Does opted to put up a fight.

With one exception: Doe number 6, known on Yahoo Finance as Senor_Pinche_Wey (which is a slang Spanish term that is as obscene as you can imagine).

A typical post by Senor_Pinche_Wey reads:

…I will reciprocate [fellatio] with Lisa [Krinsky] even though she has fat thighs, a fake medical degree, “queefs” and has poor feminine hygiene…

Doe-6 fought the subpoena, was rejected, and appealed to California’s Sixth Appellate court.

Clearly, Doe-6 had some resources backing him up…to say nothing of a deep motivation not to be exposed.

And, fortunately for Doe-6, his appeal was successful and the subpoena was quashed.

This decision – handed down in February of this year – essentially affirms the First Amendment rights of message board bashers to say whatever they want about the officers of public companies. (An excellent analysis of the decision can be viewed here.)

In their decision, the Court noted:

We likewise conclude that the language of Doe 6’s posts, together with the surrounding circumstances — including the recent public attention to SFBC’s practices and the entire “SFCC” message-board discussion over a two-month period — compels the conclusion that the statements of which plaintiff complains are not actionable. Rather, they fall into the category of crude, satirical hyperbole which, while reflecting the immaturity of the speaker, constitute protected opinion under the First Amendment.

Interesting.

Ready for the other shoe to drop?

I’ve learned, through multiple sources, that the immature speaker in this case, Doe-6 (aka Senor_Pinche_Wey) was none other than Daniel Loeb himself.

As a matter of fact, Senor_Pinche_Wey is one of many abusive message board identities used by Loeb to harass officers of companies Third Point was shorting, often illegally.

On August 12, 2005, Patrick Byrne first publicly accused several hedge funds of working in coordination to illegally manipulate the share price of Overstock.com and many other small, public companies. Within 48 hours, armies of bashers arrived for the first time on the Overstock.com stock message boards across the web, all working off of a the same obvious set of talking points. Among the points these bashers took the greatest care to make, time and again: that Byrne was crazy for thinking that any two hedge funds would ever work together when shorting.

In case there are any doubts left regarding Byrne’s claims, I invite you to look at this message board exchange, between Senor_Pinche_Wey, LaseriumQueen, bobbingbargains, disgustedinvestor, kidstockjoec, jidoo, and Polytechnic_Trader.

What makes it so interesting is that at least 72% of the participants are hedge fund managers shorting the company they’re smearing.

Specifically, Senor_Pinche_Wey belongs to Daniel Loeb, while LaseriumQueen, bobbingbargains, disgustedinvestor, and kidstockjoec all belong to Robert Chapman, founder of hedge fund Chapman Capital.

Polytechnic_Trader and jidoo may or may not belong to Loeb or Chapman…I don’t know either way.

I do know that Chapman also posts under the aliases tautologicaltrader, ghaulty_lodgick, notably_absent, and herniatedgorilla – all of which can be seen, time after time, posting things I’m quite certain Chapman would not dare say in person.

Do hedge funds coordinate their attacks?

Yes.

And as you’ll read in a soon-to-be-published-post, message board bashing is only the beginning.

UPDATE / EDITOR’S NOTE: Floyd Schneider, while apparently admitting that he does use multiple Yahoo message board IDs simultaneously as alleged in this post, objects to our contention that he is paid for his work, as he explained to the New York Post in its recent story about antisocialmedia.net. We have extended the invitation to Mr. Schneider to tell his side of the story in this space and hope he takes the opportunity to do so.

…A very small apology, but an apology none the less.

Because Gary was found to be behind the first real example of multi-ID message board bashing to be publicly proved, and because it was apparent from writing and posting styles that one person was making a large percentage of all bashing contributions to the Yahoo boards in particular, we concluded that Gary was generally responsible for most all of it.

Well, as we’ve gone on to learn, thanks to more advanced techniques and a few golden tips, we were missing much of the full picture.

The truth is, lately Gary Weiss seems to be playing a decreasingly significant role on the various message boards where the likes of lamborghini751, cupandsaucerwithsugar, state_police_retiree, and bobobaloney once roamed.

And in many places where we long suspected Gary, we’ve instead come to discover Floyd D. Schneider, of Newton, NJ.

Gary: we’re sorry for accusing you of something you didn’t commit…as much as we suspected, anyway.

Floyd: we wish to express our deep disappointment in your decision to make a living out of lying.

Want proof?

Exploiting Yahoo’s Dissembler Sorting Algorithm bug (which we were sworn never, ever to reveal, so please stop asking) we determined that the following seven Yahoo messageboard usernames were tied to the same individual: strethoechasity, returnofstockdung, baloneymarch, zorro20934, china39846, charlesp0nzi, and floydtheoneandonly

Using Google, we found several legal filings, including this one, which make it clear that:

…“floydtheoneandonly,” “charlesp0nzi,” “thetruthseekercom,” are pseudonyms used by Floyd Schneider.”

It seems Schneider has been sued multiple times for making defamatory statements about companies in anonymous message board settings, such as Yahoo and Silicon Investor, and it’s been shown to our satisfaction that he did so for compensation and in coordination with hedge funds shorting the stock (or worse).

In other words, Floyd Schneider is the embodiment of the mythical “paid basher” you’ll find he spends an inordinate amount of time denying exists. In fact, he had been an associate of the convicted naked short seller Anthony Elgindy who, in one of the most famous posts on his siliconinvestor.com website, outted Schneider as a paid stock basher, severing their prior relationship at the same time.

Think about it…someone Elgindy (possibly reading this from his prison cell) considered excessively mercenary. Wow.

A more detailed analysis of Schneider’s posting patterns will soon follow, but here’s a quick summary of the companies he has most ferociously attacked in recent years:

• Xybernaut
• Matrixx Initiatives
• Overstock.com
• Novastar Financial
• Escala Group
• Cenuco
• Hythiam
• Lucent Technologies
• iMERGENT

What do each of these companies have in common? They’re all targets of the illegal market manipulation technique known as strategic failure to deliver, as manifest by their presence on the so-called Reg SHO Securities Threshold List, indicating chronic failed trades of a company’s stock.

To better understand that issue, watch this presentation.

Check back soon for part three of our four part series on the root of the problem affecting our friend Gary Weiss.

Arriving at our destination, you can expect to have learned, as we have, that Gary Weiss is quite actively engaged in deception on other people’s blogs, in addition to his own. Furthermore, by the time we’re done, you’ll have found new levels of ironic significance in these words:

“Bravely spoken, by the coward who hides behind a pseudonym.”

And here we go…
The first thing you need to understand is that in late January of 2006, Gary Weiss’ IP address was 70.23.85.112.

Here’s how we know that.

The website Wikipedia endeavors to be an online encyclopedia that anybody can make changes to. Fortunately for mankind, a record is kept of each of those changes. Here’s just such a record: a summary of edits made by a user at the IP address 70.23.85.112.

Note the date range: January 27-28, 2006, and the article edited: Naked short selling. Such rapid succession of edits, as seen here, is suggestive of what’s called an “edit war.”
Now, let’s look at who else was editing that article during that period, to learn more about this edit war.

Starting at the bottom and working up, we see the editor identified by the IP address 70.23.85.112 editing heavily until 7:19pm when that user’s edits abruptly cease.

79 minutes later, a brand new user calling himself Mantanmoreland arrives, picking up right where 70.23.85.112 left off. A few days later, Tomstoner arrives, forging an unusually strong “tag team” relationship with Mantanmoreland. Together, Mantanmoreland and Tomstoner become the primary antagonists of the novice and disorganized bloc of Wikipedian naked shorting opponents.

On February 20, 2006, as if to put a fork in their soundly defeated opposition, Tomstoner adds a link to Gary Weiss’ blog to the naked short selling article.

Fast forward six weeks.

On April 6, Gary Weiss sees his second book published. Bravo, Gary.
On April 9, Tomstoner adds a reference to the three-day-old book on the article about Gary Weiss’ alma mater, the City College of New York.
On April 13, Mantanmoreland creates the Gary Weiss article on Wikipedia, and goes on to take ownership of it, including going so far as to know when one Weiss quote is more suitable than another.
On April 14, Mantanmoreland adds a link to a nearly decade-old Business Week article originally written by Gary Weiss
On April 15, Mantanmoreland decides the article on Arthur Leavitt would be better with a link to the nine-day-old book by Gary Weiss.
On April 17, Mantanmoreland adds a link to the first book by Gary Weiss
On April 30, Mantanmoreland feels one more article could benefit from a reference to the three-week old book by Gary Weiss.
Make that two more articles
On May 13, Lastexit, one of Mantanmoreland’s admitted “sockpuppet” alter-egos, feels the article about Julian Robertson could benefit from a link to a six-year-old bit of journalism by Gary Weiss.
On May 19, Mantanmoreland decides the article on hedge funds is incomplete without a link to the Weiss Book.
On July 12, Lastexit concludes that a three year old Business Week piece on naked shorting penned by Gary Weiss would perfectly round out the Wikipedia article on the same topic.

Anybody not convinced that 70.23.85.112 = Mantanmoreland = Tomstoner = Lastexit = Gary Weiss raise your hand.

Ok good. So we can all agree that in late January, 2006, 70.23.85.112 = Gary Weiss (remember that…it’s on the final exam!).

Now, let’s go back to January 22, 2006.

On that day, two relevant things happened.

First, the New York Post published an effusive review of the Gary Weiss book, which would not go on to be available for purchase for another 3.5 months.

Second, Yahoo user ID lamborghini751 is created and soon makes his first message board post in the form of a question as to his “wife’s” career options.

Four minutes later, his second post, to Yahoo’s Overstock.com message board, announces to the world that Gary’s book, though a full financial quarter away, had been the subject of a glowing review by the New York Post.

On January 24, 2006, Yahoo user ID cupandsaucerwithsugar is created. As his first act, at 1:29 pm EST, he provides an answer to lamborghini751’s two day old question.

(A quick scan of the subsequent postings of both lamborghini751 and cupandsaucerwithsugar makes it obvious that the same person is behind both. But Yahoo’s delightful dissembler sorting algorithm bug confirms this, as those familiar with the DSA will easily see.)

As his second act, less than 60 seconds after the first, cupandsaucerwithsugar chooses to honor Gary Weiss, as follows:

“yeah and weiss just ripped boobo and co a new one on his blog”

How sweet.

For those keeping track at home, that post brings us to 1:30 EST on January 24, 2006.
Interestingly, according to the header info on the sample chapter posted on his website, Weiss’ publisher would complete the book’s soft proof 82 minutes later, at 2:52pm.

So what had the NY Post reviewer been reading?

Hmmmm.

Nevermind such details!

Six hours later, at 8:35pm, Gary Weiss publishes a new blog post, which opens thusly:

“Bob O’Brien,” the bravely anonymous leader of the Baloney Brigade…

Just 25 minutes later, on the above-mentioned Bob O’Brien’s blog, first time commenter cupsandsaucer has this to say to the same Bob O’Brien:

Bravely spoken, by the coward who hides behind a pseudonym.

A quick review of the corresponding server log entry (time zone set to GMT) confirms what we all already suspect, and poetically brings us full circle:

How much more ironic is the accusation,

…coward who hides behind a pseudonym…

when you consider it was posted by cupandsaucer Gary Weiss (aka 70.23.85.112, Mantanmoreland, Lastexit, Tomstoner, Lamborghini715, and cupandsaucerwithsugar), who’s turned pseudonymity into a way of life?

Gary Weiss is a former journalist, book author, outspoken advocate of securities regulation reform, and someone who should know better than to use his blog to deceive and attempt to intimidate his opponents.

First, some background
Haloscan is a third party weblog commenting system often used by users of the Blogger platform.

A funny thing about Haloscan: when you use it to post a comment, a “cookie” is placed on your computer, storing your user data (username, email and website) so you won’t have to enter that information next time. This is generally convenient, since Haloscan requires you to enter a username and email address every time you comment. However the website field is not required.

But the Haloscan cookie can be a little buggy, in that having entered a website url once, sometimes it will insist that the same url appear in subsequent comments. If you erase the auto-completed website field it will likely get posted with your comment anyway. At times, the only solution is to specify another website, which may in turn appear on future comments whether you like it or not.

A little inconvenient, but nothing more.

Unless, that is, you are a commenter attempting to covertly use multiple identities on the same blog, as appears to have been the case with blogger Gary Weiss earlier this year. In that case, Haloscan becomes a rather conspicuous indicator of deceit.

Here’s what happened (in each case, a link to the live website is provided, but considering the likelihood that inconvenient posts will be deleted or altered, screenshots are provided as well. Click on the thumbnail to see a full version, each or which was captured while a mouse pointer — not visible in the screencapture — hovered over the link thereby revealing its destination in a yellow tool-tip style box):

On January 25, 2006, Weiss’ blogging rival Bob O’Brien posted an entry from an apparant ally named James Cummins who, notably, lauds Gary Weiss as an “American hero.” A commenter to O’Brien’s blog suggested Cummins copy the post to Gary Weiss’ blog, which Cummins does on January 31, 2006, via Haloscan.

In the Haloscan website field, Cummins apparently attempted to enter the url corresponding to his original post on thesanitycheck.com.
Original comment

Over the next two days, Cummins and Weiss engage in comment jousting. In each case, Gary includes a link to his website with his comments, while Cummins does not. That changes on February 3, 2006, when a link to Cummins’ website suddenly appears. Strangely, the link points to the website claimed by Gary Weiss.
Original comment

The following 14 hours saw more comment jousting in which Gary Weiss consistently includes a homepage link while James Cummins did not. Suddenly, that changes, with Cummins again linking to Gary Weiss.
Original comment

Two hours later, a special treat: the previously unknown Mr. Frank Guss opts to join the discourse, with harsh words for Mr. Cummins. Oddly, the homepage of Mr. Guss is the same used by Gary Weiss.
Original comment

Before Cummins can respond, Guss is back for more, attacking Cummins and again linking to the homepage of Gary Weiss.
Original comment

In less than two minutes, Cummins is back up off the matt, calling Guss a “basher” yet following his lead by linking to the homepage of Gary Weiss.
Original comment

Less than a minute passes before Gary Weiss sweeps in to defend the honor of his fair blog commenters. In keeping with what’s fashionable, Gary links to the homepage of…Gary Weiss.
Original comment

Now, at this stage, it needs to be pointed out that Gary Weiss is known for moderating his blog comments; meaning, prior to publication, Haloscan holds comments pending Gary’s approval, with requests for moderation arriving via email. So, depending on the speed of the network carrying that email and Gary’s proximity to a computer, this can realistically delay the posting of comments anywhere from a minute to many hours or beyond. However in the case of the three comments documented immediately above, we see James Cummins respond to Frank Guss and be responded to by Gary Weiss…all within about two minutes. Of course, comments made by Gary himself get published immediately.

There are several possible explanations for these odd circumstances, and I commit to add Gary Weiss’ version here alongside my own if he’ll offer it. But the version I find most likely is as follows:

Gary Weiss is James Cummins and Frank Guss.

While there is evidence to suggest that a young writer named James Cummins does exist and may have collaborated on the referenced project, he had no part in this interaction. Instead, Gary gravely mislead his readers by propping up an overly-gracious strawman to publicly flay with the help of others, including at least one poster who was in fact also Gary Weiss.

The effect of the Haloscan auto-complete bug is limited to individual machines, such that the only reason it might affect either James Cummins or Frank Guss would be if they all posted from the computer used by Gary Weiss. Indeed, that appears to he what happened, though it was Gary acting as the other two at the time.

Gary Weiss has done his readers and patrons a tremendous disservice for which he should apologize, reveal what role the real James Cummins played in this ruse (if any), and commit to a more honest use of social media moving forward.

–ASM