Media – 2010

Favorite Media Interviews and Mentions

October 25, 2010 – WCAX TV – Whistleblower alleges insider trading at GMCR

Could a routine inquiry into accounting practices at Green Mountain Coffee Roasters lead to an insider trading investigation? A Wall Street whistleblower believes it’s possible after reviewing documents from the Securities Exchange Commission.

The SEC is already conducting an informal inquiry into Green Mountain’s “revenue recognition practices.” And now Sam Antar, a securities expert who has worked with federal investigators, says public documents show a company executive sold thousands of shares just before the company publicly disclosed the SEC inquiry. The announcement of the inquiry was followed by a 16-percent drop in Green Mountain’s stock price.

A group of shareholders are already suing the company, alleging executives artificially inflated the stock price and cashed in before the price drop. And Antar says the timing of the stock sale is the kind of thing that could trigger an insider trading investigation.

Antar knows first hand about being investigated by the SEC. He is a convicted felon, who admits to masterminding one of the largest securities frauds uncovered during the 1980s when he worked as the chief financial officer fo the Crazy Eddie electronics chain. Antar says he now works as an independent whistleblower, providing information to the SEC, FBI, IRS and Justice Dept.

September 20, 2010: – AIG Case Proves Auditors Are Useless, By Gary Weiss

One of my favorite bloggers, the former Crazy Eddie book-cooking mastermind Sam Antar, has a hobby of doing the kind of stuff that auditors are paid to do, which is, theoretically, to root out gamey accounting. He has single-handedly–just for kicks–uncovered accounting shenanigans at more public companies than you can shake a green eyeshade at. Every one of those companies had auditors, usually with Big Four accounting firms, that were supposed to actually find that kind of stuff.

September 5, 2010: Reuters – When short sellers fund journalists, By Felix Salmon

Still, the fact is that someone like Sam Antar, for all his past history and possible conflicts, produces much more interesting, more insightful, more useful, and more transparent journalism than Ben Stein could ever dream of.

August 2, 2010: Crain’s New York Business – Defense firm offers novel description of earnings, By Aaron Elstein

But eagle-eyed accountant Sam Antar, former chief financial officer at electronics retailer Crazy Eddie, points out that things aren’t quite as rosy as Comtech made them appear.

In Comtech’s world, EBITDA not only means earnings before interest expenses, taxes and the rest, but also $2.3 million in something called amortization of stock-based compensation. That’s a no-no, because as Mr. Antar observes, companies may not stray from the Securities and Exchange Commission’s definition of EBITDA. If they do, they have to it call their results “adjusted EBITDA” or, perhaps in Comtech’s case, “EBITDAASBC.”

I sent an email to Comtech asking about this and will provide and update when the company responds.

July 26, 2010: The – Goldman Settlement Has One Loose End, By Gary Weiss

Though I’ve seen it mentioned in one of the class actions against Goldman, what I’m not seeing in the debate over the Goldman victory, er, settlement is a less obvious issue. It arose briefly at the time the charges were filed in April, and was dealt with recently by only one commentator on my radar screen, my favorite white-collar crime blogger, Sam Antar of Crazy Eddie fame. Sam points out a gaping hole in the Goldman settlement: The famously “surprising” SEC lawsuit, which stunned investors and caused Goldman shares to plunge, was really no surprise at all. Even though Goldman co-general counsel Greg Palm told analysts at an April conference call that “nobody told us in advance,” Goldman, in fact, had formal notice that charges were pending. Goldman received a “Wells notice” of the SEC’s intent to file civil charges in July, 2009 — nine months in advance. Some surprise

June 28, 2010: The Reporters Committee for Freedom of the Press – SEC subpoenas target whistle blowers’ e-mail with reporters by Ellen Biltz

At least one government agency is using subpoenas to target e-mail between journalists and potential sources by going after the source.

Two self-proclaimed fraud convicts recently turned over thousands of documents rather than fight a Securities and Exchange Commission subpoena that asked for, among other things, e-mail the men had exchanged with reporters.

The SEC subpoenaed 37,000 documents about the business practices of Sam Antar and Barry Minkow — including e-mail the two exchanged with Dow Jones reporters — as part of a general investigation. Neither had been charged with or accused of wrongdoing.

While neither of the journalists, Michael Rapaport or Ben Dummett, has been subpoenaed themselves, the SEC has asked for copies of e-mail from Antar and Minkow that they’d sent to the reporters.

“It’s like saying, ‘I’m not allowed to hit you with my car from the front, but I can hit you from the back,” said Sam Antar, a former fraudster turned whistle blower who does private investigations of potentially fraudulent companies. “The SEC’s policy is a walking contradiction.”

Antar said he recently decided that fighting the subpoena wasn’t worth a legal battle with the SEC, but he isn’t happy with the agency’s attempt to circumvent their common practice of not subpoenaing the reporters themselves.

Antar says he sent more than 30,000 documents to the SEC for review, but not one of them was a communication with a journalist, from Dow Jones or anywhere else.

“Those files didn’t exist,” Antar said.

While Antar didn’t have any files to turnover, he said he does believe it is worth a public policy debate as to whether government agencies should be crafting subpoenas that target communication with journalists.

June 23, 2010: Reuters – When the SEC subpoenas journalists’ sources, By Felix Salmon

Henry Blodget, like all other right-thinking individuals, is appalled at the SEC recapitulating its David Einhorn let’s-shoot-the-messenger errors with its subpoena of 37,000 documents from Sam Antar.


Sam Antar, responding to Blodget, says (in an on-the-record email which the SEC is welcome to subpoena) that “the SEC’s subpoenaing of sources for their communications with journalists is no different than the government subpoenaing client communications with their attorneys as a way to breach the attorney-client privilege.” And he has a good point.

If the SEC were to ask Antar for emails he sent to his lawyer, he could simply refuse, on the grounds that such communications are protected. And the SEC itself is happy to admit that communications with journalists deserve some measure of protection, and that the SEC shouldn’t simply go on massive fishing expeditions in such circumstances: instead, it should be very specific about exactly what information it wants.

The Sam Antar subpoena, however, is obviously a fishing expedition: it even includes documents from Antar’s recent divorce. And it nullifies a huge amount of the welcome sentiment behind the SEC’s policy on asking for information from journalists, if the SEC can ignore all those guidelines when asking for information from journalists’ sources.

June 22, 2010: – SEC Crazy Talk, By Gary Weiss

Sam Antar is an unlikely whistleblower: a convicted felon who went to jail for his role in the Crazy Eddie stock scandal and now spends his time fighting securities fraud. He says the SEC has been giving him—and other whistleblowers—a hard time.

A couple of weeks ago, a man from New York by the name of Sam Antar forwarded a zip drive to the Securities and Exchange Commission containing 37,000 documents that regulators wanted to see—a quarter of a million pages in all. “Just to open each file,” he told me, “I calculated that at a rate of two files a minute, it would take an SEC investigator, working seven hours a day, eight weeks to get through them all.”

Antar spent weeks fighting the agency over this, but eventually he decided the legal expenses of fighting it in court would be too crushing. It’s hard to be too sympathetic with Antar at first blush. When the SEC wants documents, it should get them, right? After all, everyone wants a vigorous, crime-fighting SEC. But in this case, the commission wasn’t targeting adversaries, but allies.

June 1, 2010: CFO Magazine – Something Wicked This Way Comes, By Maria Leone

If auditors are going to do a better job, they’re going to need better training. So says Sam E. Antar, former CFO of Crazy Eddie Inc. and a convicted felon who now consults with companies and federal law-enforcement agencies on white collar–crime prevention. “Auditors are trained to look for bookkeeping errors,” Antar says. “They are not required to take [a single] course in forensic accounting or criminology.”

April 16, 2010: Huffington Post – Lead SEC-Goldman Counsel Richard Simpson Will Be ‘Relentless’, By Diane Tucker

Richard Simpson is a relentless litigator who brought the Antar clan to its knees,” Sam Antar told me on the phone today. Sam is the cousin of Crazy Eddie Antar, the consumer electronics retailer charged with securities fraud and illegal insider trading in 1989. One of the largest securities frauds of its time, former U.S. Attorney Michael Chertoff called Eddie Antar “the Darth Vader of Capitalism.”

Sam Antar offered to testify for Federal prosecutors in exchange for immunity. That’s how the Crazy Eddie accountant came to work with Simpson, who is lead counsel in the SEC’s fraud charges against Goldman-Sachs. “Rick is a tough adversary. I swear he works over 90 hours a week. He’s focused, aggressive, and understands the way criminals operate. He knows accounting backward and forward, which is rare for an attorney. Richard Simpson is what the SEC should be today, but unfortunately is not.”

Antar admits to being verbally abusive to Simpson back in the day and marveling at how the prosecutor kept his cool. “He is tough, but always a gentleman.”

April 16, 2010: Alan Colmes Presents Liberaland – SEC Takes On Goldman Sachs – A Sea Change Or A Big Fish To Calm Waters?, By William K. Wolfrum

Still, the SEC has come out swinging lately, promising to make regulation a part of their charter once more. Only two days ago, SEC Chairman Mary L. Schapiro said “the Commission will consider proposals designed to strengthen our oversight of the markets and promote greater fairness and efficiency.”

One interesting source, former “Crazy Eddie” fraudster-turned-whistleblower Sam Antar, said he believes this could be a tide-turning moment for the SEC, and that at the very least he expects them to go hard after Goldman Sachs. And Antar should know. The SEC’s lead investigator on the Goldman Sachs case – Richard Simpson – was also the lead investigator in the SEC case against “Crazy Eddie.”

“This is full court press,” said Antar, an admitted felon who writes at the Web site White Collar Fraud. “Simpson is a very tough litigator and is relentless. He works 90 hours a week day and night. He is brilliant!”

April 7, 2010: Jewish Daily Forward – After Arrests, Syrian Jews Slowly Adopt Charitable Reforms, By Josh Nathan-Kazis

The certifications will create “a false sense of security concerning the behavior of certain corrupt charities and organizations within the Syrian community,” wrote former community member Sam E. Antar in an e-mail to the Forward. In 1991, Antar pleaded guilty to fraud as chief financial officer of Crazy Eddie Inc., a high-profile company that was run by Syrian Jews and went down in a flurry of indictments and Securities and Exchange Commission investigations in the early 1990s. Antar now advises law enforcement and businesses on white-collar crime.

“It will simply ‘paper over’ the pervasive, systemic and widespread problem of tax evasion involving certain criminal elements within that community and do little, if anything, to prevent or deter criminal conduct,” Antar wrote.

Antar said that FBI agents have interviewed him in the course of what he believes to be an ongoing investigation into money laundering by Sephardic Jewish charities that goes beyond those cited in last summer’s scandal. A spokesman for the FBI’s New York office declined to comment on whether such an investigation was under way; a spokesman for the FBI’s New Jersey office did not respond to an inquiry.

March 23, 2010: Bloomberg – Short Sellers Do Work of Cops on Doughnut Break, By Susan Antilla

When hedge fund manager David Einhorn told an audience of investors in 2002 that he recommended shorting Allied, the SEC investigated him before they bothered to probe the company. The lukewarm probe the SEC wound up doing didn’t even include a visit to Allied headquarters two blocks from the SEC. Ultimately, the SEC’s documents on Allied were mysteriously deleted from the agency’s computers, the new Kotz report says.

In a classic SEC farce, the agency has acknowledged the shorts’ important role in balancing the boundless swamp of financial hype by slapping new curbs on them on Feb. 24.

No less an expert on white-collar crime than onetime jailbird Sam Antar, whose Web page says he masterminded “one of the largest securities frauds of its time” when he was chief financial officer of Crazy Eddie Inc. in the 1980s, says the way to counter market hype is to make it easier to research short- sale ideas and sue fraudsters. And trust me, Antar should know.

“There is nothing worse for a criminal to deal with than an adversary with a profit motive,” he told me in a telephone interview.

March 1, 2010: CFO Magazine – Now You Don’t See It by Sarah Johnson

Distraction and deception go hand in hand, whether in a magic act or at a dishonest company. Sam Antar, the ex-CFO of electronics retailer Crazy Eddie, kept auditors away from the company’s fraudulent practices in the 1980s in part by having his staff distract them with constant small talk and invitations to coffee and lunch. Around the same time, Barry Minkow, the founder of ZZZZ Best, kept auditors focused on the legitimate side of the business (carpet cleaning) and away from an “insurance restoration” unit, which was fake.

A 2009 study backs up that anecdotal evidence. Performed by researchers at the University of Massachusetts at Amherst, the study demonstrates that auditors are less likely to find manipulated earnings when management directs their attention away from areas of financial statements that contain errors. (The study was recently voted best research paper by the American Accounting Association’s auditing section.)

February 2, 2010: New York Times Notions on High and Low Finance Blog – Take That, You Jackapes, By Floyd Norris

Addendum (Wednesday morning): There is speculation that I could be very wrong on that last forecast. Sam Antar, (the felon who used to be the CFO of Crazy Eddie and now looks for corporate officials who remind him of his old ways) suggests that Mr. Chidester’s sudden departure could be related to questions being asked by KPMG’s auditors

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