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Carl Icahn the Bottom Feeder?
In the recent Overstock.com conference call, the president of the company, Dr. Patrick Bryne, outlined the schematic for a complicated stock manipulation consisting of a top layer of media, private detectives, big investor contacts to the SEC and DOJ, class action attorneys, and research firms.
At the bottom of this structure was a Master Manipulator identified as The Sith Lord (a Star Wars character). Directly above that was a tactical director of manipulations referred to as the Bottom Feeder.
On CNBC, Jeff Matthews asked if Bryne thought that the Master Manipulator was Michael Milken. Those familiar with the Drexel insider trading scandal from the mid-1980’s will remember that he was charged by Giuliani with insider trading, stock manipulation, and a host of other manipulative and illegal acts. Bryne declined to name him as the Master Mind.
Speculations as to the identity of the Bottom Feeder have come to rest on Carl Icahn, billionaire corporate raider, based upon the broad hint Bryne used: I can..
Let’s examine this for plausibility, and see if there is support for the theory.
The first thing to note is that Milken and Icahn go back 25 years. Milken was instrumental in obtaining financing for several of Icahn’s highest profile acquisitions. If we move close in time to the present, we begin to see that Mr. Icahn has a history of playing on the broker-dealer side of the market, and made quite a bit of money in the issuance of PIPE financings, commonly referred to as death financings or toxic financings.
We also find that the company that has listed all of the companies on the Berlin and other German exchanges is linked to Icahn in a very direct way (one of the complaints of the companies that believe naked short selling is destroying their stock price is that an arbitrage loophole is being exploited, where offshore market makers can naked short legally as long as they are bonafide MM’s on other exchanges or in other countries).
The key to it all is toxic financing investment bank Ladenburg Thalmann. Carl Icahn redeveloped Ladenburg Thalmann into the largest PIPE dealer in the US in the late 1990's and 2000 timeframe. He took a dying investment bank and developed it into a toxic financier. The majority shareholder of Ladenburg Thalmann was New Valley Corp., a company controlled by Bennett Lebow and Carl Icahn.
Ladenburg's minority shareholder was Berliner Effektengesellschaft AG, the German group that controls the largest market maker on the Berlin Stock Exchange.
Ladenberg was closely tied to Rhino Advisors hedge fund, and the head of that fund, Thomas Badian. Rhino was shut down in Operation Bermuda Shorts, when it was discovered in the Sedona case that they participated in a stock manipulation scheme to destroy companies’ stock price – a fairly sophisticated scheme involving many layers of offshore accounts, over 1000, all computer traded and designed to interact in taking down a company.
In 2005 Icahn and the Germans reinvested in Ladenberg after pulling out following the Rhino/Mark Valentine/Badian blowup, however as of the most up-to-date filings they have abruptly liquidated their positions, with no explanation tendered.
We have Icahn and the Berliner group connected as partners in a company that specialized in a type of financing that ultimately destroyed most of the companies that chose to participate. Further, that company was a key player with a convicted stock manipulators whose specialty was destroying the market value of their targets, in a sophisticated offshore and onshore scheme composed of a network of disparate entities.
So is there precedent for Icahn to be the Bottom Feeder? We can connect him solidly with hedge fund manager Leon Black of Apollo Advisors – another Drexel alumni and familiar of Michael Milken, and a name on the Bryne slide. We can connect him to Kroll. We can connect him to Einhorn. He has a history with the Germans whose function is widely believed to be to enable naked short selling. Is that conclusive?
No. None of it is.
But is it possible?
Yes.
Does he have all of the qualities, the connections, the money, the experience and the capability to be the Bottom Feeder? Would it be a natural move up the food chain from bulletin board companies to small caps? Does it explain why all the companies were listed in Germany in the same time period? Would the lack of any serious regulatory or legal fallout from the Badian/Valentine implosion have served to make any plans to escalate this to the big board more attractive?
All good questions. Too bad no regulators seem to be asking them.
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