WASHINGTON (CN) – A shareholder in Overstock.com demands records from the SEC on its investigation of Gradient Analytics. She claims Gradient allows some of its hedge fund customers to edit its reports, and that one hedge fund used it this way to drive down the price of Overstock. She claims the SEC knows Gradient did this, but dismissed Overstock’s complaint.
Named plaintiff Mary Helburn says Overstock is “a leading online closeout retailer. … Gradient Analytics is a stock research firm which disseminates its reports to stock investors such as hedge funds. Additionally, Gradient allows some of its customers to edit its reports. Thus, a customer may take a position in a stock and use Gradient as a conduit that causes the stock to rise or fall, benefiting the hedge fund. Unfortunately, Gradient was used by a hedge fund to drive down the price of Overstock.com to benefit the ‘short’ positing of the fund. This downward presence [sic] caused Mary Helburn to lose a large percentage of her net worth … . Overstock, on behalf of itself and its subsidiaries, filed a complaint with the SEC, who investigated the allegations. The SEC concluded its investigation, and despite the affidavits and sworn testimony from former Gradient employees supporting Mary Helburn’s complaints, the SEC dismissed the complaint.”
Helburn has sued Gradient. She says she needs the records she requested for a court supervised settlement conference set for June 5. She says that she and the public have a right to the records of the SEC investigation. She is represented by Thomas DiBiase with Shapiro Lifschitz and Schram.