O.co (aka Overstock.com) Announces Court Ruling Denying RICO Amended Complaint Moving forward with California Suit
SALT LAKE CITY, Aug. 2, 2011 /PRNewswire/ -- O.co, also known as Overstock.com, (NASDAQ: OSTK) today announced that the court in its prime broker lawsuit denied the company the right to file an amended complaint to include a claim under New Jersey's Racketeering Influence and Corrupt Organization (RICO) Act.
Overstock.com began the process to amend to include the New Jersey RICO claim in December 2010, citing evidence newly obtained from Goldman Sachs and Merrill Lynch entities that tied them to New Jersey trading in a massive manipulation scheme of Overstock.com's share price.
In May 2011, the court disallowed the amendment, stating that the amended complaint needed more specific facts on the new RICO claim. The court then allowed Overstock.com two weeks to submit a proposed amendment with more specificity on the RICO conspiracy.
Despite meeting the court's deadline and supplying a wealth of detailed and conspiratorial facts, the court yesterday ruled that it is too close to trial and it would be unfair for Goldman Sachs and Merrill Lynch to have to defend the new RICO claim, and that conflict of law principals disallowed the trial of the New Jersey RICO claims in California courts.
"With all due respect, we think the ruling is wrong. We did not have the facts to file the RICO case in 2007. When we received the discovery we needed, we found proof of a RICO conspiracy and promptly filed that claim. The court ruled that our claim was not specific enough, so two weeks later we re-filed our RICO claim, with great specificity. The court now denies our RICO claim again, this time on the grounds that it would be unfair to Goldman to force them to prepare a defense against RICO so late in the game," said Jonathan Johnson, President of O.co. "We disagree that it is too late to require Goldman and Merrill to defend their conduct on theories which rest on the same facts that have been at issue all along and of which we only recently obtained evidence. These issues and our allegations have been a matter of record since December of last year."
Notwithstanding yesterday's ruling, the company has determined to push on to the December 5, 2011 trial date and will reserve any appeal of yesterday's decision until later.
"In a way, the ruling now clears the tracks, and we are eager to have our day in court," said Johnson. "Our core manipulation case is solidly established, and we will move forward confident in our belief that a jury will hold these defendants to account for the harm they caused."
The court did not rule yesterday on Defendant's motion to seal the record of the documents filed in support of the motion to amend, despite pleadings from The Economist and The Rolling Stone to release such documents to the public. The court indicated that in the future it would issue a written ruling on Goldman and Merrill's efforts to seal these documents.
"The public has an interest in a free and open court system and particularly in learning the supporting facts upon which this amendment was based." said O.co Chairman and CEO Dr. Patrick Byrne. "Given actions of Goldman and Merrill which have already become public in recent years, the massive taxpayer bailout they enjoyed, and this week's White House Executive Order declaring organized crime's manipulation of our financial system a national emergency, we agree with The Economist and Rolling Stone that the basis of our RICO action is of extraordinary public concern and interest and that the public should be allowed to see and consider what we have learned."
About O.co (also known as Overstock.com) O.co, also known as Overstock.com, is Your Savings Engine offering brand-name products. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory distribution channel. O.co, 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 and http://www.o.co. O.co regularly posts information about the company and other related matters on its website under the heading "Investor Relations." Overstock.com® is a registered trademark of Overstock.com, Inc. O.co™ and Your Savings Engine™ are trademarks of Overstock.com, Inc., 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 all statements other than statements of historical fact, assessments of legal rulings, quality of evidence in the case discussed and the relative prospects for outcome at trial. Our Form 10-K for the year ended December 31, 2010, 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.