Sam Antar, formerly the CFO of Crazy Eddie, known in the New York area for over-the-top commercials that scared the hell out of kids (well, me at least), knows his way around a questionable balance sheet. For 15 years, he was the executive chef of book-cooking, ultimately taking a guilty plea to conspiracy and obstruction of justice charges. He stayed out of the clink by taking the stand on the government's side at a 1993 trial, ultimately sending his cousin, Eddie Antar to prison for seven years or so.

Crooks make the best cops, so to speak, and Antar is putting his skills to work. He's out hunting for accounting fraud and sending his analyses off to the SEC. On his blog, the former CFO laid out what he called a "bulletproof case" against Overstock.com (NASDAQ: OSTK) – a company that the SEC had been investigating since 2006. The inquiry has been reopened.

Overstock.com (NASDAQ: OSTK) announced on Thursday that it received a notice from the SEC stating that the company was under investigation concerning its "previously-announced restatements of its financial statements in 2006 and 2008 and other matters."

CEO Patrick Byrne noted in the press release that "All of the matters that are the subject of the subpoena have been thoroughly disclosed and we are disappointed, given the extensive public disclosures Overstock has previously made, that the SEC, given all of the challenges it faces, has apparently chosen to expend time and resources on another investigation of Overstock. Rest assured, I will continue to speak out as I have on the shortcomings of our financial regulatory system."

A new study published by Matthew Magilke of the University of Utah and Jeffrey T. Doyle of Utah State University suggests that public companies don't time their earnings releases based on how favorable or unfavorable the numbers might be.

This flies in the face of what most observers -- myself included --- have noticed. Unless there's some very rigid schedule for earnings releases, most companies prefer to dump bad news on Friday afternoons -- and if there's a three-day weekend coming up, then that's even better.

Following fourth quarter earnings that sent shares of Overstock.com (NASDAQ: OSTK) soaring, Stifel Nicolaus downgraded the stock from "hold" to "sell."

According to Briefing.com "The firm says not appropriately reflected in Friday's share price move, was the fact that the quarter benefited from a $1.8 mln gain in partner gross profit dollars relating to payments from partners who were under-billed earlier in the year and a $3.7 mln one-time benefit from a bonus reversal in the quarter as the company decided not to distribute profit sharing and senior executives were not paid bonuses."

Quarterly earnings calls are a great opportunity for investors to hear directly from the companies they've invested in and to get clarity from management when they answer questions posed by analysts. I listen to hundreds of calls every quarter, and I'm constantly surprised (and sometimes confused!) by the responses offered by management. This is the first in a series of occasional posts on some memorable quarterly earnings call moments.

Overstock.com (NASDAQ: OSTK). Chairman and CEO Patrick Byrne never ceases to . . . amaze me. While I sometimes come away from their quarterly call more perplexed than ever, Byrne's responses to questions certainly stand out. Here are some of the more memorable comments from their latest quarterly call, held on October 24, 2008.

While commenting on accounting errors that resulted in a financial restatement, Patrick Byrne explained it this way:

"We had been managing to a yardstick that turned out to have a bit of rubber in it at the end of the quarter."

Well, that certainly clarifies things!

Moving on to a conversation on EBITDA and Cap Ex, we hear that OSTK is:

". . . like the proverbial boa constrictor digesting a baby hippo. We ate the baby hippo about three years ago -- actually right now -- and it's moved its way through the boa constrictor."

Even as the company continues to lose money hand over fist and face continued accounting woes, Overstock.com (NASDAQ: OSTK) has taken the time to put together a YouTube video full of clips featuring its chairman and CEO Patrick Byrne going on various cable shows and ranting and raving about the "systemic risk" posed by naked short selling. Back in 2005, he said that "Continued abusive short-selling practices pose strong potential for a systemic Wall Street meltdown that will undermine our capital system and our economic strength."

Now, with the market in the toilet, Byrne is going around doing the "I told you so" victory lap.

Newsflash: the current mess has nothing to do with naked short selling. Nothing. Absolutely nothing. In fact, the trouble at subprime lenders and large financial institutions was predicted by short sellers. The fact that naked short selling is now in the spotlight is indicative of what I've been writing for a long time: bad companies that are losing money rapidly blame short sellers. Now that once great companies are now bad companies, they blame short sellers too!

And what did Patrick Byrne have to say about sloppy lending practices and cheap credit back at the height of the bubble? In July of 2006 he referred to subprime toilet bowl Novastar Financial as an "awesome firm."

Hey, Patrick, stick to what you do best: unrealistic and unfounded predictions of profitability and accounting scandals.

Shares of Overstock.com (NASDAQ: OSTK) fell sharply on Friday after the company reported yet another quarterly loss and disclosed that it would have to restate its earnings. In the press release announcing the restatement and earnings, CEO Patrick Byrne told investors that "The total effect of the errors over the five and a half year period (during which we generated nearly $3.5 billion in revenues) is a reduction in revenue of $12.9 million and a $10.3 million increase to cumulative net loss."

In the grand scheme of things, this isn't material. And there's certainly no reason to think this is anything other than an error -- a result of Overstock being a sloppy, poorly run company with a distracted CEO battling the imaginary demon of naked short selling, but not accounting "fraud."

Here's the best part: One of the imaginary demons that Patrick Byrne was out battling was Gradient Analytics, a small independent research outfit that Overstock sued for putting out negative research reports. Earlier this month, the lawsuit was settled. In that press release, Overstock said that "Gradient now believes that, to the best of its knowledge, Overstock's stated accounting policies did in fact conform with Generally Accepted Accounting Principles (GAAP) and regrets any prior statements to the contrary."

Here's my question: was Overstock aware of the need for an earnings restatement when it settled the lawsuit? Or did it push through a settlement just before it disclosed that Gradient's allegations of accounting issues were proven to be right on the money? We may never know.

The larger point is that Overstock shareholders would be much better off if Patrick Byrne devoted his energy to managing his company, not lashing out at anyone who says mean things about him.

Given the weakness of consumer spending, a lot of investors are worried that Overstock.com (NASDAQ: OSTK) may not come through with the profitable year the CEO Patrick Byrne has gone on the record as predicting.

Indeed this necklace, pointed out by a poster on a Yahoo! message board, may be a bad omen:

Sterling Silver Moveable Toilet Necklace

• Enhance your style with this sterling silver necklace
• Pendant features a fun and edgy toilet design with a lid that opens and closes
• Jewelry includes a princess-length chain

If you want it -- and I'm sure you do -- you can buy one at Overstock. It's only $16.99.

It looks like this toilet bowl of a company could be releasing some pretty crappy numbers.

Overstock.com, Inc. (NASDAQ: OSTK) CEO Patrick Byrne is no stranger to bizarre paranoia and conspiratorial lunacy, but he actually appears to have topped himself in a YouTube interview with market pundit Don Harrold: "Everybody should go out and get sort of a two or three month supply of food and water for when there's a huge dislocation... There's nothing wrong with putting a thousand dollars worth of camping food in your basement."

Wow. And then he somehow links the whole stockpiling food thing to writing to politicians to complain about naked short selling. He then talked about Iran's plans for attacking the the east coast with nuclear weapons. Just so you don't think I'm making it up, watch the video below. He closed by saying that "Jim Cramer's a crook."

Patrick Byrne, the petulant chairman and CEO of the king of corporate crybabies, Overstock.com (NASDAQ: OSTK), issued yet another rambling press release on Friday, lamenting the fact that the company had reappeared on the Regulation SHO Threshold List after its stock price tanked following quarterly earnings that disappointed investors. Byrne said that ". . . the price of it fell 40% when we announced earnings that largely beat the Wall Street consensus expectations."

Regardless of how impressed Mr. Byrne was with yet another quarterly loss from his company, Stifel Nicolaus analyst Scott Devitt wasn't buying it. He downgraded the stock from hold to sell, pointing out that the company's revenue growth benefited from "fairly easy comps," adding that Overstock "may never achieve operating margins above 2%-3% at scale."

But never mind analyst predictions. Let's look at Patrick Byrne's predictions. In a 2001 interview with The Wall Street Transcript, Byrne said that by 2004 he "would want to see us well over $400 million and as profitable as hell. Making a ton of money. I want to see that next year."

That was seven years ago, and Overstock still has not reported anything resembling a profitable year, although Byrne is predicting that 2008 will be profitable in spite of a year-to-date loss of $10.4 million. Apparently Mr. Byrne is upset that no one is taking his forward-looking statements seriously anymore, but the fact is that, historically, Mr. Byrne's projections of profitability have been horrifically optimistic, and investors who believed him got their stuff handed to them.

If Mr. Byrne stopped wasting time lashing out at critics and devoted a few hours a day to backing up his big talk, the critics would go away and the stock would thrive.

Overstock.com (NASDAQ: OSTK)'s stock tumbled more than 41% on Friday after the company reported its second quarter earnings. But investors looking for an indication of how things are going at the Utah company got a pretty eye-opening look on the company's conference call.

Chairman and CEO Patrick Byrne's answers to questions -- and his repeated pleas to CFO David Chidester for help and Chidester's corrections to Byrne's numbers -- demonstrate a CEO who simply isn't on top of the operations of his company as he devotes countless hours to lashing out at critics and spouting conspiracy theories.

Take a look at these examples from the conference call -- quotes taken from the Seeking Alpha transcript:

Matt Schimler – Merrill Lynch: Also, what percentage then of your direct business is reselling returns?
Patrick Byrne: Got to be about a quarter of it. Isn't it Dave?
David Chidester: I don't think it's quite that high.
Byrne: What is our direct business showing up on a GAAP basis, David, as a percentage of sales?
Chidester: It's about 21%.

That's right: the chairman and CEO of a publicly-traded internet retailer doesn't know what percentage of its sales come from the direct business. Can you imagine Steve Jobs' having to ask the CFO what percentage of sales come from the iPod?

Given that Byrne is obviously not to up on the company's fundamentals, you have to wonder about whether his predictions of profitability can be trusted.

Shares of Overstock.com (NASDAQ: OSTK) are down nearly 30% after the company reported second quarter earnings. Revenue rose 27 percent to $188.8 but the company reported yet another big money-losing quarter, with $6.5 million, or 28 cents per share, flying out the door.

One way to evaluate the candor of management is to look at the company's statements in its press release announcing news -- if the company says all kinds of wonderful things about how great everything, but the stock still goes down 30%, it means that you're dealing with people who put lipstick on a pig. Here are some examples of the self-congratulatory tone of the earnings release. "For the first time in its history your business has generated four consecutive quarters of positive EBITDA and TTM operating cash flows. . . Our financial condition is sound despite a weak economy."

There's no mention of what went wrong in the press release, but obviously most people were hugely disappointed with the quarter. One problem for Overstock is that the company's sales and marketing expense ballooned 79% to $14.2 million.

You'll be happy to know that chairman and CEO Patrick Byrne continues to spout nutty conspiracy theories and post on message boards, arguing with anyone who dares criticize him.

Overstock.com (NASDAQ: OSTK) reported impressive numbers yesterday -- and by impressive numbers, I mean another loss years after projections of profitability -- and its shares shot up more than 30%.

Gary Weiss reported on the less optimistic part of the press release that the company issued, but I'd like to take a second to point out something to investors. Even if the company's fundamentals are improving, this is still one of the creepiest public companies on the planet and it's wasting shareholder money on its creepy stalking campaigns.

If you go to DeepCapture.com -- CEO Patrick Byrne's website for trashing critics including Gary Weiss, Jim Cramer, Eliot Spitzer, and a couple of message board posters you've probably never heard of -- in the upper right hand corner of the site, you'll see a little ad: "Click here to shop Overstock.com. 5% of your purchase will go to support this effort." That link brings you to http://www.overstock.com/?TID=deepcapture where, presumably, any order you make will be tagged by the company to funnel 5% of the sale to the "effort."

What exactly is the money being used for? Former white-collar criminal and Overstock-critic Sam E. Antar received an email from former journalist Mark Mitchell: "I am writing a story about short-selllers (sic) and their relationships with independent researchers and the media. I would like to give you the opportunity to respond to various allegations regarding your work." He goes on to say that the article will be published on DeepCapture.com.

So here's the question I have: Why is Overstock.com's board of directors allowing Patrick Byrne to funnel money from the company's sales to a pet project aimed at pseudo-investigative pieces on short-sellers and their relationships with independent researches and the media?

If Patrick Byrne wants to use his own money to wage his self-proclaimed jihad, that's his business. But he should leave corporate assets out of it.

Chalk up another problem for Overstock.com (NASDAQ: OSTK), the failing online retailer run by the wacky CEO Patrick Byrne. Yet this law enforcement investigation doesn't appear to come with any "celebration" by Byrne.

Byrne is usually proud of the company's failures, but the announcement of the latest law enforcement investigation was buried deep in a press release about the latest set of quarterly losses: On April 15, 2008, we received a letter from the Office of the District Attorney of Marin County, California, stating that the District Attorneys of Marin and four other counties in California have begun an investigation into the way we advertise products for sale, together with an administrative subpoena seeking related information and documents. We follow industry advertising practices and we intend to respond fully to the subpoena and cooperate with the investigation.

This investigation is in addition to the ongoing investigation by the SEC, as well as the litigation between Overstock and Gradient Analytics. Gradient sharply criticized Overstock in its research reports and Byrne and company cried that the reports were not true. (Oddly enough, the company still has not turned a profit several years later, and is still a horrible investment.)

Note to Patrick Byrne: Those who have bad things to say about Overstock, its business model, its operations, and its never-ending financial losses aren't necessarily short sellers who are trying to profit off bad news. Many of them are realists who have figured out how awful your company is. Sorry, but sometimes the truth hurts.

Tracy L. Coenen, CPA, MBA, CFE, performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

In a recent interview with The Register, Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne told (his side of) the story of Force Protection (NASDAQ: FRPT), a maker of armored vehicles for the military. To hear Byrne tell it, this is company that is keeping our troops safe but that, because of naked short selling, has been unable to raise the capital necessary to fill orders.

Force Protection was down more than 20% yesterday after the company again delayed the filing of its 10-K, citing the "scope of the work to be performed to complete its analysis and to identify the material weaknesses in the Company's internal control over financial reporting, including the need to restate its financial statements." Darn those naked short sellers! Why did they mess up the company's internal controls? Oh wait. They didn't. And in the middle of this mess, the CEO resigned earlier this year.

Meanwhile, Overstock.com, the crown princess of the naked short selling victims, announced that it actually lost four cents more in 2007 than previously reported as a result of changes in its revenue recognition based on "accounting comments from the staff of the SEC."