Thursday, March 12, 2009

Marchex Target Of Fraud Activist

Executives who inflate their corporate bios do so at the risk of deflating their company stock. Barry Minkow is banking on that. Minkow is the founder of the Fraud Discovery Institute of San Diego and the pastor of a Community Bible Church. He's also a convicted felon, having served seven years in federal prison for fraud and other offenses. According to Dow Jones Newswires’ Al Lewis, Minkow's latest "investment" involves a Pacific Northwest company: publicly traded search and advertising firm Marchex Inc. of Seattle. Lewis reported that Minkow questioned the credentials of Marchex's chief operating officer and co-founder, Peter Christothoulou, who originally claimed on Marchex's Web site to have a B.A. in Economics from the University of Washington. Apparently, he didn't. The false claim has since been removed from Christothoulou's corporate bio but, per Lewis, Minkow isn't satisfied and believes Christothoulou should be fired. Minkow might be hoping for more than that, however—Lewis wrote that Minkow has a habit of shorting the stock of the companies he targets. Minkow efforts recently resulted in the ouster of a Vice President at semiconductor firm Broadcom; he's also flagged issues with a number of executives at other firms.