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Amazon's Bezos investigated by Feds

Another stock-chucking coincidence

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The US Securities and Exchange Commission (SEC) is casting a jaundiced eye on stock sales executed by Amazon CEO Jeff Bezos shortly after receiving advance copies of a negative financial report, the New York Times reported Friday.

However, the Commission will neither confirm nor deny that an investigation is underway, according to follow-up reports by the wire services.

Amazon spokesman Bill Curry said that if there is an investigation, the company sure wasn't aware of it. "If there proves to be one we're certainly going to be happy to help in any way we can," he is quoted as saying.

Bezos filed notice on 2 and 5 February stating his intent to sell 800,000 shares of Amazon stock worth approximately $12 million. The company has confirmed that the sale was consummated.

The sticky bit comes from a report by financial shamanists Lehman Brothers, expressing doubts that the company has enough money to operate for the rest of the year, which Amazon executives received prior to publication and of course prior to Bezos' sale.

Curry confirmed that Amazon execs got advance copies of the report, but rather than panic and start chucking shares, attempted instead to convince Lehman Brothers that they'd got things wrong.

Playing fast an loose with financial information is nothing new at Amazon. Indeed, company execs have repeatedly ducked requests for hard data to back up their perennially rosy assessments of the company's prospects.

In a Sunday article, New York Times columnist Gretchen Morgenson decries the "blather masquerading as financial information" issuing from Amazon's 'investor relations' flack division, which she compares to a Tower of Babel.

Her take on the attempt to persuade Lehman Brothers that their report was less than accurate is refreshingly cynical. "John Doerr, a prominent venture capitalist and Amazon director, called Lehman's chairman to try to suppress [the] report before it came out," she writes.

Seems the NYT is finally catching on to the hype. One would almost think they've begun reading The Register. ®

Related Link

The Morgenson article

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