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|Overstock Adding Racketeering Allegations to Ongoing Lawsuit vs. Goldman Sachs and Bank of America Subsidiary Merrill Lynch|
SALT LAKE CITY, Dec. 16, 2010 /PRNewswire via COMTEX/ --
Overstock.com, Inc. (Nasdaq: OSTK) today announced that as a result of evidence gathered through discovery in its prime brokerage lawsuit, Overstock.com has filed a motion in California State Court to amend that suit to include claims under New Jersey's Racketeer Influenced and Corrupt Organizations (RICO) Act. Civil RICO claims carry the possibility of treble damages. See www.overstock.com/Patrick-Byrne/7371/static.html for a redacted version of the motion and a declaration, filed conditionally under seal to protect information designated by the defendants as 'confidential' or 'highly confidential' under a court protective order.
The San Francisco action, first filed in February 2007, alleged prime broker defendants engaged in "naked short selling" and similar manipulative practices designed to profit from failing to deliver shares required to close trades, and that this resulted in downward pressure on Overstock.com's share price.
Jonathan Johnson, President of Overstock.com, stated, "Recently discovered revelations of concerted action among certain market makers and these two brokerages necessitate that we amend our complaint to include additional claims. We expect that this conduct of Goldman Sachs and Merrill Lynch is fully actionable under anti-racketeering laws."
In documents filed with the court yesterday, the company alleges "Merrill, Goldman and certain of their market maker clients agreed to and created a scheme to effect the naked short selling in Overstock securities that is the subject of this action, in order to perpetuate short selling and drive down the price of Overstock, to their mutual profit."
Overstock.com, Inc. is an online retailer offering brand-name merchandise at discount prices. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ Global Market System and can be found online at http://www.overstock.com. Overstock.com regularly posts information about the company and other related matters on its website under the heading "Investor Relations."
Overstock.com(R) is a registered trademark of Overstock.com, Inc. All other trademarks are the property of their respective owners.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, statements concerning the extent of expected damages, the success of any motion or what supporting documents demonstrate. Our Form 10-K for the year ended December 31, 2009, our subsequent quarterly reports on Form 10-Q, or any amendments thereto, and our other subsequent filings with the Securities and Exchange Commission identify important factors that could cause our actual results to differ materially from those contained in our projections, estimates or forward-looking statements.
SOURCE Overstock.com, Inc.