While it’s all fun and games with the pretend tough guys over at Overstock.com, Patrick Byrne and crew have done all us financial layman a favor – they’ve made the term “Cookie Jar Reserve” easier for us to understand. Yesterday, Overstock.com – working on deadline – restated their 2009 financial report.

A Cookie Jar Reserve is an illegal practice when when a company under-reports
income during an earlier reporting period in order to inflate income for future reporting periods. It is a practice that misleads the investors of publicly traded companies like Overstock.

From Overstock.com’s restatement:

“Correction of these errors is expected to shift approximately $1.7 million of income recognized in fiscal year 2009 back to fiscal year 2008.”

Sam Antar – he of the Crazy Eddie Fraud scheme who was profiled here – has long been asserting publicly that Overstock.com has been cooking the books in this way. Antar has been vilified, threatened and mocked non-stop by Byrne and his PR shill/Partner-in-crime Judd Bagley. But this last restatement vindicates him, and shines an even greater light on the issuer retaliation tactics of Overstock.com.

Last year, I wrote a post titled “For Patrick Byrne and Overstock.com, the real story is in the financial reports.” I led it off thusly:

Overstock.com CEO Patrick Byrne has had a busy week, attacking messengers and filing reports. As should always be the case with Byrne and Overstock, the real news goes on top – Overstock’s financial reporting.

And the song remains the same. Because while Byrne’s rants about naked short sellers and his blatant attacks on any who question his accounting may be all fun and games, it is pure diversion. What matters is the financial reports. And Byrne’s guilt is consistently written all over them.

–WKW

Crossposted at William K. Wolfrum Chronicles